The Labour leader said he questioned the Revenue Commissioners about why the State had no high-profile prosecutions of tax evaders in the way the jockey Lester Piggott who was convicted and jailed in Britain.
Mr Ruairi Quinn, minister for finance from 1994 to 1997, said it was not that he had a "particularly vindictive nature" but he was concerned that with self-assessment, and in the absence of such high-profile cases, "the natural and human temptation to understate one's full tax liability would emerge".
He was particularly anxious that where there was a case for prosecution, it "should be pursued and made public for precisely the effect of encouraging all people who are responsible for self-assessment to fully comply".
Mr Quinn said he regretted not having followed up on a proposal to give the Revenue Commissioners "full and autonomous powers to initiate both investigation and prosecution".
It emerged during informal discussions with the then Revenue chairman, Mr Cathal Mac Domhnaill, to give Revenue "exclusive powers of prosecution in relation to tax evasion".
Mr Quinn, who said he was the first finance minister to pay a formal set of visits to the Revenue offices, expressed concern at a perceived "settlement rather than prosecution policy".
He had received a report from Revenue of about 30 cases put forward for prosecution.
The current system was that tax inspectors would refer a case to the Garda Fraud Squad which might conduct a new or additional set of investigations and then refer the matter to the DPP.
In the 30 cases in the report, "the time lapse between the Revenue Commissioners beginning to be suspicious of evasion taking place and a decision by the DPP" resulted in no prosecution in virtually all of the cases he saw.
In his opening statement, Mr Quinn said during his tenure as minister, he did not recall any occasion on which the evasion of DIRT or the widespread existence of bogus non-resident accounts was raised.
The Revenue chairman "and his colleagues assured me at all times that they were satisfied with the standard of collection and they were able to point to the huge increase in tax revenue during this period, which was far above the targeted rate of growth".
He told Mr Paul Gilligan SC that "neither the records show nor does my memory recall on any occasion that abuse of the scale that has now emerged was ever brought to my attention".
Replying to Mr Frank Clarke SC, Mr Quinn said he was never told by ACCBank of the extent of its failure to comply with DIRT legislation.
He agreed the State-owned bank should have informed him, as the single shareholder, of the extent of the problem.
He agreed with Mr Clarke that during his tenure as minister "no great efforts" were made within ACC to tackle the problem of bogus non-resident accounts.
