Wallace Reveals EUR2.1m Tax Dodge

Maverick Independent TD Mick Wallace has voluntarily left the technical grouping in the Dail of which he was a member, following his admission that he knowingly under-declared VAT taxes to the Revenue Commissioners.

The developer-turned-politician has made a €2.1 million settlement with the tax authorities - but admits the exchequer is never likely to see the money as his company is insolvent.

The issue arose following the sale of apartments by his construction firm M&J Wallace Ltd in 2008/9.

The company, of which Mr Wallace is the sole director, failed to pass on the Value Added Tax due to the exchequer.

Instead he under declared his tax liability to the tune of €1.4m.

He later alerted the Revenue Commissioners, and when interest and penalties were added he reached a final settlement of just over €2.1m.

He put in place an arrangement to pay a certain amount each month to the Revenue, but when ACC bank moved against his company, it was declared insolvent and could no longer make the payments.

Mr Wallace admits he is now unlikely to be ever able to repay the money he owed.

The revelations have led to calls for his resignation from the Dail, where he represents the Wexford constituency - with questions over whether it's appropriate for him to take a salary paid for by the taxpayers at a time when he owes them more than two million euros.

Sean Barrett, the ceann comhairle, wrote to the Oireachtas committee on members' interests asking it to investigate Mick Wallace.

Its chairman Thomas Pringle - another independent TD who sits alongside Mr Wallace in a technical group in the Dail - has promised to convene a meeting this week to discuss the matter.

He said he will be taking legal advice over whether or not it has a role in investigating actions that pre-date a TD's election to the Dail.

"I acknowledge what I did was wrong, but I did it in good faith," Mr Wallace said last week as he revealed his tax default ahead of the official release of a defaulters list by Revenue this week.

He claimed the under-declaration to Revenue was done to save his company, and the jobs of his workers.

He said he had expected that he would be able to settle the VAT bill in full at a later date, but when it became clear that the economic recovery was not materializing, he went to Revenue to make a settlement.

Mr Wallace has been a popular figure in the Dail - easily recognizable with his long shock of blonde curly hair and his insistence on wearing pink t-shirts, refusing to adhere to the Dail's strict dress code on the wearing of suit jackets in the chamber.

He is a member of a technical group in the Dail - a loosely aligned group of independent and left wing TDs who have grouped together in order to secure speaking time under House rules.

Normally, a vociferous bunch, there was a deafening silence from his colleagues in the immediate aftermath of his announcement.

But after criticism from political commentators, many of his colleagues in the technical group later voiced their disappointment at his actions, describing them as wrong, but stopping short of calling for him to resign.

Mr Wallace had planned to travel to Poland to attend Ireland's Euro 2012 games, but he cancelled them at the weekend amid rising public anger.