Finance Bill, 1983: Committee Stage (Resumed).

Thursday, 26 May 1983

Dáil Eireann Debate
Vol. 342 No. 12

First Page Previous Page Page of 37 Next Page Last Page

Question again proposed: “That section 11 stand part of the Bill.”

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputy M. Brennan on sections 11 to 14 inclusive.

Mr. M. Brennan: Information on Matt Brennan  Zoom on Matt Brennan  I was talking about the farm modernisation scheme. Farmers are no longer entitled to grants for farm buildings or any type of concrete works or silage pits. This has hit farmers in the west of Ireland who have bad, wet land more than any other farmer. It is a shame that these grants are no longer available, in particular when half the money was coming £1 for £1 from the EEC. In disadvantaged areas in Northern Ireland farmers qualified for 70 per cent of the grant, when we were qualifying for only 30 per cent of the grant. Now that small 30 per cent has been done away with in the budget.

Another thing which has hit the farmers in the west, and especially the small farmers with off-farm incomes, is the discontinuation of headage payments. The income limit was reduced from over £5,000 to £3,500. Anybody who is working now will not qualify for a subsidy under that scheme.

I do not wish to take up any more time. It will cost each and every one of the small farmers in the tax net at least £200 to get their accounts done by an accountant. That amount of money is ridiculous. It is rates by the back door. They are being penalised too much if they have to pay £200 to an accountant to have their accounts done.

Mr. Foley: Information on Denis Foley  Zoom on Denis Foley  How far will farmers have to go to prove their tax liability? They should not be put to unnecessary expense. The present proposals are not [2496] attractive to the farming community. In the event of extra production or any other initiative, will the farmer be penalised, or will the Minister give concessions in those circumstances? Now 90,000 farmers are to be brought into the tax net. The vast majority of them will not be liable for tax. The Minister's projection of £2½ million is not correct, and that figure would not cover even the administration of farming taxation.

If we are to keep our people on the land we must be prepared to show some appreciation of the long and unsocial hours they have to work. Farmers are afraid of this proposed new tax form which they will receive shortly. They should get every help from the Revenue Commissioners. There is no such thing as a simplified tax form. I appeal to the Minister to assure the farming community that he will introduce a simplified system of taxation, and that the personnel of the Revenue Commissioners will be available to give them every assistance so that they will not be forced to go to accountants unless they are liable to tax.

Minister for Finance (Mr. Dukes): Information on Alan M. Dukes  Zoom on Alan M. Dukes  A number of remarks have been made on the other side of the House about reality. I should like to ask the Deputies who raised that question, and particularly Deputy O'Keeffe and one or two others, to reflect on who is in touch with reality. They all seem to have forgotten the main proximate reason why we are having this debate here today. The reason is that a case was taken by representatives of the farming community—and they have achieved part of the objective—designed to show that the PLV system is unconstitutional in certain aspects. Because that case was taken and because they got that verdict in the courts — now on appeal — we can no longer use a threshold of PLV as a means of deciding who is or who is not within the tax system. It is as a direct result of an action taken by and on behalf of the farming community that we are having this discussion. I ask Deputies on the other side of the House to remember that reality before they start making the points they are making.

[2497]Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): That happened last year.

Mr. Daly: Information on Brendan Daly  Zoom on Brendan Daly  It is under appeal.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I said it is on appeal. A number of people, including myself, have been saying for a number of years that we should have a better system. Deputy O'Keeffe is in a good position to know that because he was involved for many years with people who were making that point — and I have been at it myself in one way or another for the past 15 years — without making a great deal of progress in suggesting a system which would meet the problem. I submit that I am at the front in dealing with the reality which results from that case. Deputies on the other side of the House who want to turn away from this problem are turning their backs on reality.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): It is the Minister who is turning away.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Minister without interruption. This is wasting time.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I will restrict my remarks on these sections to the minimum number possible. If Deputies opposite want to make an issue of it, I am afraid I might respond to it. But the reality of it is that we need now to have a replacement system because we can no longer use the PLV as being a threshold for deciding who is and who is not in the tax net. It is because we are in that position that 90,000 farmers with valuations of £40 or under are now automatically in the tax system. What we are doing here is finding a convenient, practical method of dealing with that problem that will not be excessively onerous either on the farmers themselves or on the Revenue Commissioners.

Deputy O'Keeffe and one or two others had the good sense and discrimination obviously to read a Fine Gael policy document issued last summer. They also had the good sense to read the Government's programme. They picked [2498] out a particular passage in both of those documents — drafted, might I add, by myself with the agreement of people in those two parties — which was an approach to dealing with this problem. On further examination we have found that there is a better way of doing that job than we had set out there. I am very happy that we have found a better way, because in any notional system adopted there will be discrepancies and injustices. We have found a better way of dealing with that problem and that better way is incorporated in these sections.

If Deputies on the opposite side of the House are saying that we should stop thinking at a certain point, again I wonder who is in touch with reality and who is out of touch with reality. Deputies opposite are trying to pretend that we should freeze our thinking at a given moment in time and forget about trying to find even better ways of doing what we propose than have already been set out. I was disappointed to hear the remarks made on the other side because a number of them had more to do with propanganda and slogans than with an analysis of the provisions of these sections.

The question was asked: Would the simplified form of accounts be accepted? I made the point in my opening remarks on these sections that we will accept the simplified form of accounts. There are two stages in the operation for those who are coming into the tax system this year for the first time — 90,000 of them. A number of them this year will, first of all, be asked to fill in the farm profile which will be issued towards the end of this month or early next month. It is a very simple document. The operative part of it consists of four pages, one of them being a series of guidelines on how to fill in the form. The sharp end of it — apart from the front page which gives reference numbers and addresses and the back page which gives guidance — has two pages on the inside where fairly straightforward type information is requested. The contents and presentation of that form have been agreed with the farming organisations.

[2499]Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  Will all the answers be accepted?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  For those who fill in that profile. I would not think it would be possible this year to circulate that profile to all of the 90,000 farmers who will be coming into the tax net for the first time. In fact, we would be doing rather well if we could get the form around to a quarter of that number, bearing in mind the physical limitations and the amount of information that we can handle.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  How will the Minister select a quarter?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Tax inspectors will make their own judgment as to who are the people who are most likely, or more likely than others, to be in a position of having a taxable income. When they receive the information on this profile they will then decide, on the basis of that information, how many of those who have received and returned the farm profile might be in a position to have a taxable income and will then follow the rest of the procedure for assessment of tax on farming profits, which includes the simplified form of accounts. I would remind Deputies that only a couple of weeks ago I announced that I had set up an interdepartmental working group, as indeed had been foreshadowed in the Government's programme and in my Budget Statement, a group that will examine the further simplification of accounts, where that is possible, for small businesses and farmers. I have taken a particular approach to that. We have invited all of the interested organisations to make known their views on how we can further simplify the kinds of accounts that have to be presented by small businesses and farmers. When we have those views I shall be very concerned to ensure that, where possible, we will further simplify the accounts so as to reduce the burden on people who have to provide this information to the Revenue Commissioners.

I was asked if there is a legal definition of simplified accounts. We do not need a legal definition of simplified accounts. [2500] We already have a simplified accounts form for agriculture and we have invited submissions on further simplification of those forms.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): Will the Minister say if that simplified form will be accepted by the inspector of taxes and the Revenue Commissioners?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Deputies on the other side should refrain from creating extra problems that do not exist.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): Yes or no?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The simplified form is being issued by the Revenue Commissioners. Deputies opposite can be sure that they would not issue it if they were not prepared to accept it.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): The Minister has not answered yes or no?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The answer is yes. The procedure includes the filling in of simplified accounts. I am talking now about the people brought into the tax net for the first time and against the background of a further examination now under way to ascertain if we can further simplify the keeping of accounts for small businesses in general including farmers.

Mr. O'Keeffe:  Will the Revenue Commissioners accept them?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Deputy E. O'Keeffe made some other remarks about the suggestions he referred to in our policy document of last July. He praised — as indeed we all should — An Foras Talúntais for the excellence of the information they provide. I would ask the Deputy — and he cannot be unaware of this — to take account of the fact that there would be certain hesitations in the Agricultural Institute if it were felt that the information being provided for the farm management surveys could be used for other purposes. That is something which emerged some time later and to which we must attach some weight.

[2501]Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  On a point of order. I understand that, as was arranged on the Order of Business, a vote must be taken on all sections up to 46 at 4.30 p.m. It is now almost 3.50 p.m. I am asking you, a Leas-Cheann Comhairle, if you would look at what has been happening here. Is there a concerted decision by the farmers' lobby to ensure that there is no discussion whatsoever——

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Deputy, that is not a point of order.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  It is now 3.50 p.m. and it had been arranged that a vote would be taken at 4.30 p.m. That does not leave much time to deal with all these areas.

Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  That is an allegation more than a point of order.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  I understand the Minister is replying to questions raised on section 11.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  Would you ask the Minister, Sir, to wind up?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I can appreciate Deputy Mac Giolla's concern. I also have a concern to answer the points made by Deputies on the other side. I have undertaken that I will do so as briefly as I can, and the fewer interruptions there are the quicker I will be able to do so.

It was suggested by Deputy E. O'Keeffe that we should have in effect a notional system. I must ask Deputies on the other side of the House to put to themselves the question: are they making a case for a notional system the result of which will be that the people whose incomes are below the average level will pay more tax than they should pay? I do not think that is a proposal that Deputies on the other side would seriously put forward.

It has been suggested by Deputy McEllistrim that the 90,000 farmers coming into the tax net would pay £18 million to accountants and £2,500,000 to the Revenue. [2502] I must say to Deputy McEllistrim that I have had representations from accountants — friendly ones from people I know — since the proposals were mooted. They asked me was I trying to put them out of business because we were taking action that would mean that all these farmers would not be obliged to go to accountants to produce their returns. Of course, it is not the case that 90,000 farmers will be paying accountants. We have designed the system to avoid the necessity of farmers going to accountants. The farm profile requires information that can normally be provided without any great difficulty by the farmer himself. On the related point, it is not at all the case that the cost of administering the system would exceed the revenue we would get from it. That is a popular, rather unreflecting remark made by people about a new system of this kind. It is not true to any extent.

Deputy McCartin raised a number of questions about the definitions of income that would be taken into account in assessing farmers' liability to taxation. Smallholders' employment assistance is not included in the definition of income, so this would not create a problem. In any case the vast majority of people who are in receipt of this assistance would not have a taxable income so there is not a difficulty in relation to those people.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  Will unemployment benefit be reckonable?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy is raising a different question because people who qualify for unemployment benefit are not solely farmers.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  The answer is “yes”.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It depends on the income position.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  It would be reckonable for tax purposes. Is that not correct?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It depends on the overall income but at present under our system unemployment benefit is not taxable either. The question would arise if there [2503] is other income as to whether the person is entitled to claim unemployment benefit. That is a matter which is not covered by the provisions of this section.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  Will unemployment benefit be counted as farmers' income?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I said it would depend on the income position of the person in question.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  It will be reckonable.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Income from unemployment benefit is not taxable income.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  Then it is not reckonable.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  No. It depends on how much other income the person in question has. There is a wider issue involved than is covered in these sections.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  This is an important question which should be answered.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): The Minister will not answer any questions.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I have just said that unemployment benefit is not taxable. It is not classified as reckonable income. The remainder of the Deputy's question covers matters outside the terms of these sections.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  It does not.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It does and it would fall to be dealt with in another context.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  The Minister specifically said that it would not be reckonable.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I said that unemployment benefit is not taxable because it is not reckonable income and therefore would not enter into account for the purpose of deciding taxation.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  On a point of order, will unemployment assistance or farmers' [2504] dole be accounted in the same way as unemployment benefit?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I have said that unemployment assistance is not included in the reckoning of income for the purpose of computing tax liability.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  Is unemployment benefit included?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I repeat that unemployment benefit is not reckonable income and is not taxable.

Mr. MacSharry: Information on Raymond MacSharry  Zoom on Raymond MacSharry  They are both the same.

Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  Will it be taken as part of total income?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It is not reckonable income and does not enter into account for the purpose of deciding tax liability. That is about the fifth time I have made that point.

Mr. Daly: Information on Brendan Daly  Zoom on Brendan Daly  What about headage payments?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  That is a question we must look at. They are an income supplement and we must look at that matter to decide the proper treatment of them for taxation purposes. In the majority of cases I think we will find that the overall incomes would not be such as to be taxable on the head of these sections.

I apologise to Deputies for the brevity of replies and I commend these sections to the House.

Question put and declared carried.

Sections 12 to 15, inclusive, put and declared carried.

Question proposed: “That section 16 stand part of the Bill.”

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  This is an important section but because of the time limit I will be brief. We are opposing the section and [2505] we have adopted this stance after full consideration of the issues involved. There may have been some misunderstanding as a result of consultations which we and others had with the ITGWU. We had already decided our position in respect of this section and had drafted an amendment which we proposed to put down to delete this section. In the course of those discussions the trade union representatives indicated that they were seeking support for opposition to this section and we indicated that their views on this income levy coincided with ours. There seems to have been some misunderstanding — I am not saying it was deliberate — in press reports which suggested that our position on this levy was adopted simply by way of support for the views of the trade union and that we did not have a position of our own. I made our position quite clear long before those consultations during the course of the Second Sage debate.

I will briefly reiterate our reasons for opposing this section. When the 1 per cent levy was first introduced by a previous Government it was designed for a particular purpose. We are not satisfied that it has achieved what it was meant to achieve; but at least it had the virtue of being attributable to a particular purpose — always a good principle in taxation — namely, the training of young people and the generation of employment for them. We opposed it then and we oppose it even more vigorously now because this provision is not specified as being for employment purposes. It is an instrument of further taxation which will raise very considerable sums for the Revenue this year.

In addition the impact of this measure will fall most strongly on the PAYE sector who are already bearing a very heavy share of the burden of taxation. While the levy applies to all income it can be deducted at source from the income of the PAYE sector which is immediately identifiable. I have already given the figures for the growth of taxation in recent times, particularly the growth in income tax. With the addition of this 1 per cent income tax will certainly have gone to [2506] almost 40 per cent of total taxation. That is a very considerable sum. Income tax is growing at a very rapid rate. It is a 9 per cent increase on the percentage of total taxation over the last couple of years. The levy will aggravate the position still further. That is something to which we must register our strong disapproval.

This is an extra burden on those immediately liable. If I may anticipate his arguments the Minister will understandably say he will not accept the amendment. Deputy Mac Giolla and I have suffered a certain amount of frustration because our amendments were ruled out of order. Now I do not question the Chair's ruling but we had in mind particularly those engaged in smuggling and, perhaps, in the drug traffic in relation to whom bona fide traders are at a considerable disadvantage. Had the amendment been allowed there would have been some contribution for alleviating the cost on the Exchequer. I do not think this needs any further argument from me. It is a case of a revenue instrument being contrived solely for the purpose of adding to the Exchequer intake without regard to whether that is proper or fair or equitable.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  Very little time is available now to deal with important sections of this Bill. This section is a particularly important one. Everyone must agree it is the most inequitable in the Bill. It goes against the grain of the tax code, a code to which we are supposed to bring some degree of equity and justice. The code is being eroded by this 1 per cent levy on incomes varying from £4,000 and £5,000 to £20,000. This levy is wholly retrogressive. It was introduced last year for a specific purpose, namely, youth employment, and for that reason it was accepted. I do not think there was any opposition to the youth employment levy of 1 per cent last year. It was to serve a very good purpose. Unfortunately two things have happened now. First the youth employment levy has gone off in all sorts of different directions. It is now going into the maw of the Exchequer. To what extent it is funding youth employment it would be difficult to say. The [2507] whole purpose of the levy is being eroded.

Secondly, nobody paid the levy except those in the PAYE system. It was not paid by the self-employed or the farmers. Because it was so meekly accepted last year the Minister apparently now regards the levy as a simple method of garnering more taxation by putting on another 1 per cent this year. It would be very easy and very simple for a Minister for Finance next year to get rid of the entire income tax code and clap on another 30 per cent or 35 per cent by way of levy on everybody. That would completely erode the income tax code but it would save a great deal of money in collection and tax personnel.

Why is there all this alleged anxiety to make the code progressively equitable when the Minister comes in here with another 1 per cent levy? This erodes the whole principle of equity. Not alone that but it will dramatically increase the resistance of workers to the deductions of tax at source. That has been very valuable for the Ministers for Finance over the last 30 years. There was no objection to paying. Now because of this levy the whole system is being questioned and people are thinking again about their rights. Landlords got rid of rent restriction and farmers got rid of the PLV and the rates. Why should workers not wish to rid themselves of this deduction of 1 per cent every week from their pay packets? Having worked for the money they are entitled to get it into their own hands. The Minister should think seriously about what might happen if this were made a constitutional issue in our courts. Next year's Minister for Finance could increase the levy to 2 per cent. Where will we go from there?

Our aim should be to remove inequity from the tax system. This levy is regressive and totally inequitable. When the Social Welfare Bill was going through I was under the impression that PRSI was a form of social insurance. The Minister could not understand why I could not see that it is really a tax and has no relation to social insurance. This levy will be used in precisely the same way. The crunch [2508] will come when it is questioned by the workers. I do not think the Minister has yet understood what is happening in the current PAYE protest. They are not worrying about marching. They are not going to bother marching any more. Do not get the impression from that that there is only a small number involved in any of these campaigns. Never has the attitude been so bitter, following each deduction from their wage packet.

This 1 per cent levy will create even more problems than all the other taxation systems in this Bill. I would ask the Minister to look at it again. I do not know exactly how much it will bring in, but even if it had been put into the income tax code it would not have caused half the uproar. This year it is 1 per cent. Everybody is expecting that next year it will be 2 per cent, then 3 per cent and then 5 per cent. The inequity of it is what is raising everybody's hackles. To someone on £14,000, £15,000 or £20,000 a year a pound on every £100 is nothing; but for the man on £100 a week a pound is quite a lot. He needs a pound or two at the end of the week to put into his ESB bill or something else when he is keeping a family. To him a pound is a big sum. It is the difference between just making it and just not making it.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Deputy Gay Mitchell. I would ask the Deputy to be as brief as possible. The time is running out and I want to bring in Deputy Bell.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  We should resist easy options which perhaps do not affect people in the public service so much as people outside that they do not understand the effect that these easy options can have. The PAYE people are being very badly fleeced and we must ensure that this does not continue. We must give some indication that this whole area will be reformed. I am satisfied that the funds from this will be channelled to youth employment. That certainly is something positive in this section. The sooner funds are channelled into youth employment the better because of the vast number we have unemployed.

[2509] What worries me about this is the use of the word “temporary”. Income tax was introduce to fund the Napoleonic Wars temporarily and it has been with us ever since. I want the Minister to give us an assurance that this will be temporary and will not go on saecula saeculorum and that it will not be increased next year. I am concerned about the whole question of levies because I doubt very much if they are equitable. The income tax code at least allows for certain stages of taxation in relation to people's ability to pay; but levies do not and there may be people whose income is so low that they should not be asked to pay a levy at all. If this were to be a permanent feature we would have very serious reservations about it.

It is very disheartening to hear people talking about this being most important and the need to do this and the need to do that. All we have heard from Deputy Mac Giolla on all the sections is totally anti everything. He wants to give everything to everybody and is not prepared to take on himself the responsibility for raising the funds to pay for that. It is people like Deputy Mac Giolla who have this country the way it is.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  There are lots of areas where the money can be raised but they are the Deputy's friends.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  Deputy Mac Giolla tells us he does not want the return of rates, he does not want income tax, he does not want a cut in expenditure, he wants more staff in the public service. One cannot be opposed to every section and expect to be taken seriously. I want the Minister to really take a look at this whole area because people in the public service are not the best people to advise on levies since they do not have experience of what people outside have to suffer from these levies.

Mr. S. Brennan: Information on Seamus Brennan  Zoom on Seamus Brennan  On a point of order, we are about to vote at 4.30 on section 17 which is one of the most far-reaching sections in the Bill.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Section 16.

[2510]Mr. S. Brennan: Information on Seamus Brennan  Zoom on Seamus Brennan  Section 16 but also 17. Could the Whips get together and look at this because from 4.30 to 5.30 we are to discuss foreign travel, video machines, dog licences——

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  The Whips have already got together and they have agreed that 4.30 is the closing time.

Mr. S. Brennan: Information on Seamus Brennan  Zoom on Seamus Brennan  I am requesting that the Whips should have a discussion urgently.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  That is not a matter for the Chair.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  We have asked our Whip, in view of the delay on the last section, which many of us regret, to have consultation with the Government Whip. I do not know what the outcome of that is. It is regrettable that because of the time spent on other sections we do not have the time to debate section 17 properly.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Deputy Bell on section 16.

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  It is worth pointing out that it was the trade union movement which very much favoured and campaigned for the PAYE system. That is important. I might be put into the same category as my colleague, Deputy Mac Giolla. It might be thought that the trade union movement are against everything. The trade union movement also were prepared to support the youth employment levy on the basis that it would create employment, but this has not happened. Workers generally feel very sore about this, and if opposition is being put up by the trade union movement it is reflecting the views of all the people who have to pay this. A youth levy of 1 per cent on all income earners, whether workers, self-employed or farmers, was introduced in April 1982 and the Minister for Labour told the Dáil on 16 March that a total of £38 million had been collected from the PAYE sector in respect of 1982. But, according to the Minister's own statement, [2511] absolutely nothing had been collected from either the self-employed or farmers. There are farmers in County Louth, too, and they have to live. Here is a levy that is not collected at all. The Minister said that demands for payment in respect of 1982-83 will be issued to these categories in conjunction with the 1983-84 demands. The Minister did not indicate how much was outstanding in money terms from the self-employed and the farmers. It is interesting to note that it was costing the PAYE category £73 million, the self-employed £3.5 million and the farmers £1 million — a total of £77.5 million. I assume the same ratio would apply to this. It is the people who already were paying the lion's share who are being asked to contribute the additional levy.

I am asking the Minister to appreciate that workers who earn small industrial pensions who have got medical cards at the moment, because their incomes may exceed £77 after next July, will be liable for this levy. Already, out of their small industrial pensions they are paying 4 per cent and as they are not holders of medical cards they will have to pay the additional levy. Some old age pensioners may also have small industrial pensions of £15 or £16 per week and they will have to pay the additional 1 per cent. It is a further milking of the PAYE class, as my colleague said.

Take the health contribution. On 24 March the Minister for Health told the Dáil that at the end of 1982 a sum of £8.4 million was outstanding in health contributions by farmers. We have the same story all over. Other groups can negotiate and bargain but those in the PAYE sector who have their levies deducted once a week have no redress. This complaint by the unions will not go away and if it cannot be remedied by democratic means the trade unions will have to find some other way to do it.

There has not been one extra job created by the youth employment levy and next year we will be back with unemployment still continuing to rise. The money being used for youth employment is being wasted. Those of us who are members of [2512] local authorities can see how it can be wasted in badly organised environmental schemes. This proposal is not on behalf of the ITGWU who have sponsored resolutions. It reflects the view of the entire trade union movement. This 1 per cent levy was supposed to be temporary when it was introduced by the previous Government and the people should be told when it will be abolished. Trade unionists have to carry additional burdens as well as the 1 per cent levy and I ask the Minister when the levy will be taken away. The proposal now being discussed represents the views of the entire trade union movement, and the Dáil had better listen.

Mr. Prendergast: Information on Frank Prendergast  Zoom on Frank Prendergast  I agree that this levy was supposed to be a purely temporary measure when it was introduced and we should be told when it will be taken away. I agree that the 1 per cent which was designed for youth employment activities was supposed to yield £77 million, but only £12 million can be accounted for. People have been asking about the other £65 million. The committees in the youth employment area were in existence already so that must be some advantage to the Exchequer.

I do not want to be seen as bashing farmers but a farmer with 80 acres of land and 165 cattle legitimately can hand the land over to his son and qualify for a medical card at the expense of the State while old age pensioners who are paying the 1 per cent levy cannot get medical cards. These are the complaints I am getting in my clinics. People are saying that equity must be restored, but this year the Minister is concentrating on closing the gap in regard to tax avoidance and tax evasion and we have been told that next year an attempt will be made to restore equity in the tax system. The protests have been by PAYE workers to remedy what they see as an inequity.

In 1979 the farmers threatened to take illegal action rather than pay the 2 per cent resource levy. I listened to farmers' leaders urging their members not to pay the 2 per cent levy but rather to take illegal action. Now we want to know how long this levy will be continued.

[2513]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The yield from the levy this year will be £47 million and in a full year it will be £80 million. If that revenue were to be raised by other means it would mean a 5 per cent surcharge on the present standard and higher rates of income tax, or 4.5 per cent on all rates, or a reduction in personal allowances of £360 for married people, £237 for a widowed person and £158 for a single person, or some combination of all. It is my intention on Report Stage to table amendments to sections 17, 18 and 46.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  We are opposed to section 17 for very good reasons, one of them being apprehension about money flowing out of the banks. It would put £1,250 million at risk. I am glad that our amendment brought home our message to the Minister.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I must now put the omnibus motion.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  I understood from your predecessor that you would put section 16 first and then the omnibus——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I imagine he was speaking of a situation where section 16 was finalised before 4.30 p.m.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  It was not actually but——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  When the Leader of the Opposition hears the question I am putting, it will be quite clear.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  You will be putting an omnibus motion and we specifically wish to vote against section 16.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  We cannot do that.

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  Are you putting the question on section 16?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I am taking Part I of the Bill. As it is now 4.30 p.m. I must, in accordance with the order made——

[2514]Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  I submit that there is nothing in the order the House made which prevents you taking section 16 now as a separate vote. I know it is a widespread wish of Members of all sides that section 16 is voted on. There is nothing to prevent you putting the rest in a composite vote.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I will read paragraph (iv) of the order of the House:

the proceedings on the Committee Stage of the Finance Bill, 1983, if not previously concluded, shall be brought to a conclusion in accordance with the following timetable: and where proceedings are to be concluded at a stated time they shall be concluded by one Question, which shall be put from the Chair, and which shall in relation to amendments include only amendments set down by the Minister for Finance:—

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  We varied that order a number of times.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  No, we did not.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  I suggest there is nothing in that order which prevents us taking a specific vote on section 16, which is the unanimous wish on this side of the House——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  No——

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  I would like to be able to discuss this with you personally and other people should not be brought into it.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputy Haughey should not refer to “other people”.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  You and I are responsible for the business of this House——

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  May I——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputy Haughey has the floor.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  I am specifically putting [2515] it to you that, having discussed section 16, we are entitled to have a vote on it and none of us will object to you putting the composite motion immediately after.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I ask Deputy Haughey to listen to me. My understanding, interpretation and ruling is that at 4.30 p.m. I must put the omnibus motion and I propose to do it.

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  May I ask a question?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Yes, but do not delay.

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  Is section 16 being taken at all?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  No, the discussion is over.

Mr. Bell: Information on Michael Bell  Zoom on Michael Bell  How are we going to vote on it?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I am going to put a question.

[2516](Interruptions.)

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputies are wasting time.

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  On a point of order, we wish specifically to have an opportunity to vote against this outrageous and penal tax which the Government are imposing.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The leader of your party made that point clearly and well and I have dealt with it.

As it is now 4.30 p.m. I must, in accordance with the order made by the Dáil on 24 May, as amended by order made today, put the following question: “That the amendments set down by the Minister for Finance to Part I of the Bill and not disposed of are hereby made to the Bill and in respect of the sections undisposed of in that part, that the sections, or as appropriate the section as amended, are hereby agreed to.”

Question put.

Allen, Bernard.
Barnes, Monica.
Barrett, Seán.
Barry, Myra.
Barry, Peter.
Begley, Michael.
Bermingham, Joe.
Birmingham, George Martin.
Boland, John.
Bruton, John.
Bruton, Richard.
Burke, Liam.
Carey, Donal.
Collins, Edward.
Conlon, John F.
Coogan, Fintan.
Cooney, Patrick Mark.
Cosgrave, Liam T.
Cosgrave, Michael Joe.
Coveney, Hugh.
Creed, Donal.
Crowley, Frank.
D'Arcy, Michael.
Desmond, Barry.
Desmond, Eileen.
Donnellan, John.
Dowling, Dick.
Doyle, Avril. [2517]O'Brien, Fergus.
O'Brien, Willie.
O'Donnell, Tom.
O'Sullivan, Toddy.
O'Toole, Paddy.
Owen, Nora.
Pattison, Séamus.
Prendergast, Frank.
Quinn, Ruairí.
Ryan, John.
Doyle, Joe.
Dukes, Alan.
Durkan, Bernard J.
Enright, Thomas W.
Farrelly, John V.
Fennell, Nuala.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Oliver J.
Griffin, Brendan.
Harte, Patrick D.
Hegarty, Paddy.
Hussey, Gemma.
Kavanagh, Liam.
Kelly, John.
Kenny, Enda.
L'Estrange, Gerry.
McCartin, Joe.
McGahon, Brendan.
McGinley, Dinny.
McLoughlin, Frank.
Manning, Maurice.
Mitchell, Gay.
Mitchell, Jim.
Molony, David.
Naughten, Liam.
Nealon, Ted.
Noonan, Michael. (Limerick East). [2518]Shatter, Alan.
Sheehan, Patrick Joseph.
Skelly, Liam.
Spring, Dick.
Taylor, Mervyn.
Taylor-Quinn, Madeline.
Timmins, Godfrey.
Treacy, Seán.
Yates, Ivan.

Ahern, Bertie.
Ahern, Michael.
Andrews, Niall.
Aylward, Liam.
Barrett, Michael.
Barrett, Sylvester.
Bell, Michael.
Brady, Gerard.
Brady, Vincent.
Brennan, Mattie.
Brennan, Paudge.
Brennan, Séamus.
Browne, John.
Burke, Raphael P.
Byrne, Hugh.
Byrne, Seán.
Calleary, Seán.
Colley, George.
Collins, Gerard.
Conaghan, Hugh.
Connolly, Ger.
Coughlan, Cathal Seán.
Cowen, Bernard.
Daly, Brendan.
De Rossa, Proinsias.
Doherty, Seán.
Fahey, Francis.
Fahey, Jackie.
Faulkner, Pádraig.
Fitzgerald, Liam Joseph.
Fitzsimons, Jim.
Flynn, Pádraig.
Foley, Denis.
Gallagher, Denis.
Gallagher, Pat Cope.
Geoghegan-Quinn, Máire.
Gregory-Independent, Tony.
Harney, Mary.
Haughey, Charles J.
Hyland, Liam.
Kirk, Séamus.
Lenihan, Brian.
Leonard, Jimmy.
Leyden, Terry.
Lyons, Denis.
McCarthy, Seán.
McEllistrim, Tom.
Mac Giolla, Tomás.
MacSharry, Ray.
Molloy, Robert.
Morley, P.J.
Moynihan, Donal.
Nolan, M.J.
Noonan, Michael J. (Limerick West)
O'Dea, William.
O'Keeffe, Edmond.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond J.
Ormonde, Donal.
O'Rourke, Mary.
Power, Paddy.
Reynolds, Albert.
Treacy, Noel.
Tunney, Jim.
Walsh, Joe.
Walsh, Seán.
Wilson, John P.
Woods, Michael.
Wyse, Pearse.

Tellers: Tá, Deputies Barrett (Dún Laoghaire) and Taylor; Níl, Deputies B. Ahern and V. Brady.

Question declared carried.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Before the vote was taken the Minister announced that he was putting forward further amendments——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  On Report Stage.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Minister indicated to which sections he was putting further amendments even at this late stage. Could I again have a note of the sections to which the Minister is putting amendments?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The ones I mentioned are in Part I of the Bill, sections 17, 18 and 46.

[2519]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Section 46 deals with?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Advance corporation tax.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  That the Minister is bringing in these amendments at this late stage is extraordinary. This side of the House at least now can claim some credit in that we have amendments down to each of these and that at last, apparently, the Minister is beginning to see some sense. I do not know what exactly he has in his amendments. He knows he made some major mistakes.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Chair cannot see the relevancy of the Deputy's intervention.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  He does things at such a late stage that one wonders.

Question proposed: “That section 47 stand part of the Bill.”

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Could I ask the Minister when will we have these amendments?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  As soon as I can have them available.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  That is not very reassuring. On section 47, we have a whole range of them that we will deal with quickly. I am not opposing any of these. I want information. Section 47 is the section that imposes new fees in relation to foreign travel. The point I want to make may not be immediately relevant but I would like some information because it will affect our tourism trade in so far as we are voting very small increases by way of tariffs on foreign travel. It will be nothing by comparison with the impact of the actions taken by the French Government recently to restrict travel out of France to other member states of the European Community which will be damaging to this country and others like it, as has been proved already, but also may well be contrary to the terms of the Treaty of Rome. I would ask the Minister, [2520] arising out of what we are doing here, what actions, if any, what consultations, if any, and what proposals, if any, the Government have taken up with the French Government or the EEC authorities to minimise the impact of what the French Government propose.

Mr. Dowling: Information on Richard Dowling  Zoom on Richard Dowling  Briefly, I would ask the Minister to consider exempting persons who travel to places of pilgrimage, especially persons who are invalided and who through no fault of their own cannot pay their own expenses. There are many people who travel to such places and special consideration should be given to that kind of case.

Minister for Industry and Energy (Mr. J. Bruton): Information on John Bruton  Zoom on John Bruton  Disabled persons travelling to pilgrimages are exempt, as possibly the Deputy is aware. If one were to extend the exemptions to others travelling on pilgrimage there could be difficulties. I think the Deputy will appreciate that.

Mr. J. Doyle: Information on Joseph Doyle  Zoom on Joseph Doyle  What about those who go to help the invalids?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  There could be a problem in defining who was helping whom in this situation. One would need to be very careful in defining the exemptions if one were not to find oneself in an inoperable situation. In view of Deputy Doyle's representations in the matter here I will ask the Minister for Finance to examine this matter carefully. I could say with almost certitude that it will not be possible for him to do anything about Deputy Doyle's representations in this Finance Bill. It is something which could be looked at next year but I would not like to hold out any hope in that regard.

Deputy O'Kennedy raised a question in regard to our attitude to the decisions taken by the French Government. I would say that those decisions are highly regrettable as one of the essential elements of the European Community and, indeed, of the movement towards European unity is the free movement of persons as Deputy O'Kennedy, in particular, in this House, will appreciate and, naturally, [2521] any monetary restriction on free movement is regrettable.

However, one must at the same time appreciate the context within which these measures were taken. The French Government introduced these measures as part of an austerity programme designed to bring the performance of their economy more in line with that of the other partner members of the European Monetary System and indeed it is clear that the French authorities have a commitment to remain within the European Monetary System and to continue to work with their partners in Europe towards the improved joint performance of the European Community and in that context given that the object of the austerity programme of which this is just a part, one would perhaps look somewhat less criticially on these measures than one would look at them if they were taken entirely in isolation from the programme of economic austerity adopted in France to enable the French economy to converge more fully in its performance with the other partner members of the Community.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I appreciate the fact that the Minister has been kind enough to stray a little off the immediate point.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  In response to the Deputy's question.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  In response to my question. If we were to adopt the precedent adopted by the French Government we might here in section 47 be taking very much more stringent actions than we are taking now. Our currency too has, in fact been subjected to a lot of pressure to the extent that we had to devalue within the EMS. We have been hearing from the Minister's colleague, who has left us for the moment, of the need for very strong actions here, more stringent actions, giving rise to unprecedented tax impositions such as the extra 1 per cent levy we have just voted on. That being so, the Government might have considered taking similar actions. I really want to ask the Minister if, in view [2522] of the regret he has expressed about the French action, he is advocating that the end justifies the means in so far as the French economy needs to be corrected for so many reasons? If I have not misunderstood him, the Minister appears to accept that what would otherwise be unacceptable may now be acceptable. Have the Government made any specific approach, protest or request to the French Government or the EEC authorities to ensure that the actions taken by the French Government, which will have a very damaging effect on our tourism, are not contrary to the EEC treaty? Has the Minister taken any such action, or does he propose to take any such action?

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  In support of Deputy Doyle's plea for pilgrims, I have also written to the Minister, about this and an allied problem which is that the passport fee for these pilgrims has been raised to £30. This is a very substantial imposition on these people, some of whom are travelling for the last time with terminal illnesses. Without loss to the Exchequer, a passport could be made available in such cases for one year for £6, which would be less of a burden on these people.

Mr. De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  Could I make a brief point about some people who are perhaps not as numerous as pilgrims — people who must travel abroad in order to get jobs and link up with ships and so forth? I have received a number of representations in this connection. These people also have to pay the travel levy and does the Minister intend offering any relief or refund for this category of traveller?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The travel levy itself is not very significant financially, given the overall cost of travel. Serious administrative problems would result from the introduction of exemptions of the type mentioned by the Deputy. One would have to inquire as to the motivation for a trip. Nothing would be immediately obvious from the appearance of the person presenting himself to buy the ticket [2523] or from any other external sign as to the motive in making the trip. However, we should seek more employment in the type of industry which the Deputy has in mind.

Mr. De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  The Minister recognises the benefits.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  There would be administrative problems. If the tax were very heavy, there might be justification for consideration of Deputy De Rossa's suggestion.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I am sorry to interrupt——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I am sorry, I am merely answering the questions.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I am sorry to interrupt. I just want to remind the Deputies that at 5.30 p.m. I shall be putting an omnibus question to the House dealing with sections 47 to 65 inclusive.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The other point made by Deputy Wilson with regard to a lesser fee for a passport is not a matter for the Minister or for the Department of Finance. However, it is an interesting suggestion.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  £30 is very high.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I shall not comment on that.

Mr. Tunney: Information on James C. Tunney  Zoom on James C. Tunney  To the Minister, that is nothing.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  It is, of course, a significant cost but it is introduced for reasons that are in themselves very understandable and good. However, I shall convey the suggestion of Deputy Wilson in respect of a one year passport to the Minister for Foreign Affairs. It ought to be examined, anyway.

Deputy O'Kennedy asked me if a protest were being made by the Government in regard to the implications of the exchange restrictions imposed on French citizens. I regret that I cannot give him [2524] the information for which he is looking because the question is not directly relevant to this section and I do not have the brief on the subject. It is a matter primarily for my colleague, the Minister for Trade, Commerce and Tourism. I shall ask for Deputy O'Kennedy to be supplied with information on this subject. On the insistence of Deputy O'Kennedy, I have already indicated my own concern on these measures which are, on their own, certainly inimical to the objects of the European Community.

Mr. Reynolds: Information on Albert Reynolds  Zoom on Albert Reynolds  I do not propose to delay the House. However, Like Deputies Wilson and Doyle, I fully support special measures being introduced for invalids travelling on pilgrimages. The Minister will appreciate that these cases are once-off and we are talking about £30 for a single trip. By and large, the poorer section of society is involved. I previously raised this matter with the Minister for Finance and he referred me back to the Minister for Foreign Affairs.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Is the Deputy talking about passports now?

Mr. Reynolds: Information on Albert Reynolds  Zoom on Albert Reynolds  I am talking about the £30.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  As long as we know.

Mr. Reynolds: Information on Albert Reynolds  Zoom on Albert Reynolds  I understand from people particularly going to Lourdes on pilgrimage, which is what we were talking about, that there is such a thing as a transit sheet which could be issued just for one trip. These transit sheets have been issued in the past when people have forgotten their passports. These pilgrim cases do merit that sort of attention because of the people involved.

Question put and agreed to.

Question proposed: “That section 48 stand part of the Bill.”

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I wish to make some comments on this section and also on [2525] section 49, even though the sections will have to be put separately. Here we are dealing with something of considerable interest. Firstly, the traders engaged in electrical and allied activities in this State with regard to television sets and video players will, as a result in particular of the increased licence fees proposed here, suffer a serious impact on their business. The licences range from £78 for colour television sets not exceeding 17 inches to £121 for those exceeding 24 inches and similarly for video players. In fact, the fee for the videos has increased by 100 per cent, from £20 to £40. In addition the levels of VAT are such as almost to wipe out the electrical and allied trades here in Dublin, certainly between Dublin and the Border. I have received direct representations over a period of months in this regard. The Minister will probably know that many of the traders engaged in this business in the city of Dublin are now on a three-day week. Most have shed staff and, significantly, this is happening despite recent devaluation and the advantage which that would normally give to shoppers to come South from the North, as distinct from what is happening at the moment, people going northwards from the South.

About two years ago Deputies travelled North on the occasion of a by-election unfortunately and sadly called because of the death of our colleague, the late Ceann Comhairle, Deputy Joe Brennan, and ironically one noted the difference when one went back during the by-election caused recently by the unfortunate death of another esteemed colleague, Deputy Clement Coughlan. Over two years ago, the towns on this side of the Border were enjoying what even they recognised as a bonanza. Almost all the trade across the Border was from North to South in those days. The Ceann Comhairle, being himself from a Border county, will recall that period. The ratio between our pound and sterling is almost exactly the same now as then, but what has happened in the meantime? Allowing that the depreciation in our currency against sterling should normally be a major impetus to shoppers to come South, the level of increase in the [2526] licence fees, together with VAT and, of course, the price of petrol which we may or may not get to in this debate, are such as to make it much more attractive to go North for one's shopping. Our newspapers have been advertising what they up to recently called spring fever. We were talking on the last section about full pages in the newspapers urging shoppers to go North and buy, in Jonesboro, Newry, Belfast and elsewhere, items which otherwise might have been purchased in this jurisdiction. This is money lost to the Revenue. But the spring fever has developed a stage further and we now have a situation of summer madness. The madness is on the part of the Government who have brought about a situation in which the differences between the levels of taxes — VAT, licence fees and so on — are such that, even allowing for the differential in currencies, it is still worthwhile to go North and to buy in a big way. The tragedy is that this is causing great damage to the traders down here and to the employees, many of whom have been let off. I am sure the Minister will be aware of this as a result of representations made to him. Approximately 30 per cent of the staffs in these trades in Dublin have been laid off.

We were talking a moment ago about pilgrimages. We now have a new type of pilgrimage but it is not to Knock or to Lourdes or any other holy place. This new pilgrimage is to the various shopping centres in the North. If there is one growth area at the moment it is in the transportation of bus loads of shoppers every day of the week to the North. We asked the Government long ago to recognise the impact their actions are having on Border traders particularly. Deputy Wilson, who represents a Border area, is very conscious of that impact. The items that are being purchased there mostly are televisions and videos. There is another side to this. Because of the increasing unemployment here people are getting lump sums and have the means of buying colour televisions or videos. They are in a position to shop around for the best bargains. If they can buy a colour television in Northern Ireland for £100 less than the price here there is bound to be [2527] a great temptation for them to buy in the North. Any dealer in this line between here and the Border can verify this. The only customers these dealers have are those who can buy only on long-term credit facilities. I do not wish to appear to be saying that what the people with cash in their fists are doing is commendable. It is not. But there is a great incentive for them to travel North to make their purchases.

Undoubtedly this section, too, will be passed. There is no point in our opposing it. The numbers are against us. The Minister present, who is concerned particularly with employment and with industrial activity, should make every effort to impress on the Minister for Finance the seriousness of the situation and to make him realise that he has gone too far. But the Minister for Finance may well recognise that the bouyancy that most of us as Ministers for Finance looked to has been cancelled in areas such as the one we are speaking of. The level of revenue expected from these provisions is likely to be less than the level the Minister budgeted for at the beginning. This is simply because the trade cannot take any more. The customer is not interested and Her Majesty's Revenue, about which presumably we are not too concerned, are getting the benefit. It is time we began to review our position.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  I understand that Deputy O'Kennedy has a difficult job to do but we have been hearing a lot from the other side about not increasing levies or income tax or corporation tax. Now we are being told how detrimental all the customs and excise is. This approach is not enhancing the reputation of the Opposition, who are simply opposing everything without making any constructive suggestion or giving some grounds for the difficulties facing the Government.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I can answer that.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  The Deputy has been interrupting everyone else but I hope he will allow me make my contribution.

[2528]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Deputy knows that we are not allowed to propose——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Unless Deputy Mitchell gives way, he should be allowed continue without interruption.

Minister for Industry and Energy (Mr. J. Bruton): Information on John Bruton  Zoom on John Bruton  Deputy O'Kennedy has given the legalistic non-answer to a real question.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Chair, quite properly, refused to allow me to go further.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  Regarding the whole question of buoyancy, if we were to read the speeches made by Deputy O'Kennedy as Minister for Finance we would find that under the heading of customs and excise he had very rigid and harsh comments to make. I do not wish to make the point in a controversial way but we realise that Deputy O'Kennedy is speaking for tomorrow's papers and radio programmes.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  That sounds good coming from Deputy Mitchell.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputy Mitchell, without interruption.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  People tend to accuse others of the sins of which they themselves are guilty.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  Regarding section 48, there is a lot of difficulty in this area. It is regrettable that instead of putting excise duty on videos we are not licensing them. Both sections 48 and 49 could be taken together. If the levy were used as a licence fee there would be greater control in regard to pirate videos, a practice that is taking from people in genuine employment in the entertainment industry. In addition this might go some way towards preventing the number of break-ins to houses for the purpose of stealing videos. It would contribute significantly to stabilising employment in the entertainment industry, particularly [2529] in cinemas — an area in which, I am glad to say, there has been some pick up — but there is a big black market in pirate videos.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  I wish to stress the problems that the increased excise duty on televisions, radios and videos has caused in so far as traders in the Border areas are concerned. I know that the Chair is rootless and without nation but, if I might extract him from his office as Ceann Comhairle, he knows that what I am saying is true. It is very serious from the employment point of view. It is also very serious from the point of view of people who have invested heavily in their businesses. This has happened right along the Border from the studies we have made, from the information we have got and from the representations made to us.

This, coupled with what is happening in the construction industry in the area, has brought a degree of economic distress. I suggested in the House as a remedy that some financial mechanism should be developed. I suggested to the Minister for Finance that some form of MCA could be brought into play in the area which would help to balance it up. He said the monetary compensatory amounts were brought to bear on wholesale prices and this would be difficult.

It would not be beyond the wit of the officials of the Department of Finance to think up some mechanism whereby the inequities of the present system could be ironed out in some way. Admittedly some people say that at one stage the advantage was in the South and nobody was complaining. Now the advantage is in the North and people are going into the markets, some of them ad hoc markets set up along the side of the road which I saw myself recently between Swanlinbar and Enniskillen. We are a little too pacific in that whole area. We are not shouting enough. If we had the push and drive of the Corkmen, more attention would be paid to us along the Border.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Hear, hear.

[2530]Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  We have been taking this lying down for a long time. We have not protested enough. We have not shouted loudly enough, or some cognisance would have been taken of the difficulties brought about by the Border being there, a Border which should never have been there. It is there, and we have to live with it. It is impacting on our business people and on our employment situation and carries with it, as the House knows, other difficulties.

I was looking at the May Iris Oifigiúil casually today and I noticed that excise is down. What the Minister has done has damaged himself as well. It may be because of the drink or because of the objects we are talking about here. I put it to the House and to the Minister that there is a need for a special study of the economic problems of that area. I have spoken about this already in the House — not the problems of the whole of the Six Counties vis-à-vis the whole of the Twenty-six Counties, but the actual problems of the actual trader or construction man on the ground in the crescent from Dundalk to Lifford.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  I will not accuse the shadow Minister for Finance of being an elephant because an elephant never forgets. It amazes me how quickly the people in Opposition can forget their own document The Way Forward. When Fianna Fáil were in Government they said they would cut the deficit to £750 million. All week I have been listening to Opposition spokesmen opposing section after section of the Finance Bill.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  How could the Deputy have been listening? This is his first time to come into the House.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  I did not interrupt the Deputy.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Where was the Deputy listening? This is his first time in the House.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  I listened on the monitor.

[2531]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  This is the first time the Deputy came into the House.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  It is not.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  This is a limited debate.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  It amazes me how Deputy O'Kennedy and the Fianna Fáil Party can come in here and oppose every section of the Finance Bill when we are cutting the deficit by £147 million less than Fianna Fáil suggested. Are they trying to fool the people of Ireland? Had they been returned to power, they would have had to get an extra £147 million in taxation. When the people of Ireland kicked us out in 1977 — and I mean kicked us out — and went for the Fianna Fáil manifesto, the national debt was £3,612 million. When we returned to office the national debt was £12,700 million.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  How relevant is this?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Deputy should relate his remarks to the two sections.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  It is up to every individual to realise that every shopkeeper and every worker who travels North and purchases goods in the North is helping to put Irish people out of jobs. We have around 187,000 people out of work. We should adopt a good Irish outlook. People should be encouraged wholeheartedly to buy Irish and shop at home. The Government should make an all-out effort to provide customs officials, and amount of money allowed to be spent on purchases in the North should be strictly adhered to. In the Border counties, around Meath, north Meath and Drogheda, I get complaints about bus loads of people going across the Border to shop. The Government should take action. Goods purchased above the value permitted should be seized. I am saying that bluntly.

Mr. De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  Arising from comments made by Deputy Mitchell about people [2532] on this side of the House asking for taxes to be reduced and putting forward proposals for taxation to be increased, I should like to point out that we put down an amendment to section 47, which was ruled out of order, seeking to introduce a wealth tax. I would be interested to hear the views of any Deputy in the Labour Party or the Fine Gael Party on the introduction of a wealth tax.

In a reply to a parliamentary question on 1 March 1983 it was pointed out that the amount of tax paid on inheritances and gifts had fallen in constant prices from £8.6 million in 1972-73 to £2.1 million in 1982. As a percentage of total capital taxes, taxes on inheritances and gifts had fallen from 1.9 per cent in 1972-73 to .3 per cent in 1982. There is a significant drop in the amount of tax being collected from those who have wealth. We put down an amendment seeking to have wealth tax introduced which, in our estimate, could bring in in the region of £80 million?

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  What has this to do with the section?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  It is true for Deputies to say that Deputy O'Kennedy has been suggesting right through this debate reductions in this tax and that tax. He has been opposing everything in the budget. He opposed all expenditure reduction and yet he says he is in favour of a £750 million current budget deficit. He cannot have it every way.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I did propose extra taxes.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The Deputy has got to make up his mind sometime or other, perhaps not at the moment but some time in the relatively near future, on where he stands on tax and on public expenditure.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  The Minister is bluffing.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  On a point of order——

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  This is rodomontade.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  This is definitely a [2533] point of order. This section is related to duties and excise. The point I was making was——

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That is not a point of order.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  —— that because of the level of duties and excise we will get less for the Revenue than otherwise.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  That is not a point of order. These non-points of order are very obstructive and disorderly.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Deputy Mitchell's suggestion about video licences is a matter for the Minister for Posts and Telegraphs. I will arrange for him to be apprised of Deputy Mitchell's views on that matter.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  God forgive the Minister.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I can well understand, being a Deputy representing a constituency not too far from the Border, that there is a loss of trading in some circumstances but the Government have initiated a number of additional measures. For example, a special task force was appointed earlier this year to supplement the mobile units already working on the Border.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  As it is now 5.30 p.m. I am, in accordance with the order made on 24 May, as amended by the order made today, putting the following question: “That the amendments set down by the order made today, putting the following question by the Minister for Finance to Part II of the Bill and not disposed of are hereby made to the Bill and that, in respect of the sections undisposed of in that Part, that the sections or, as appropriate, the sections, as amended, are hereby agreed to”.

Question put and declared carried.

Question proposed: “That section 66 stand part of the Bill”.

[2534]Mr. Leonard:  On a point of order, a Cheann Comhairle, is it possible now to have any further discussion on that section and these particular measures because I think——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  You asked a question, Deputy, and I will tell you, not today, but the Deputy might find machinery to say something on them next week.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  Under the MCA mechanism on Report Stage.

Mr. Leonard:  The reason I want to object is that——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputy Leonard, you are a reasonable man and a very orderly Deputy. I am sure you do not know that an order was made ordering me to do what I have just done and there is nothing I can do about it. So I would ask Deputy Leonard to resume his seat.

Mr. Leonard:  Well, we have a Private Notice Question in and we had hoped to have an opportunity of having it taken.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  A Cheann Comhairle, may I raise a point of order?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  If it is a point of order, yes, but I would have my doubts.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  There were five pages of amendments before the House earlier this evening which went through on the nod without any accompanying explanatory memorandum. May I ask, Sir, if when so many——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  That is not a point of order, Deputy.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  If you listen to me, it might be. If you read the amendments on section 47 it gives the impression that they are being dealt with in Part II when in fact they were dealt with in Part I.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  They were, yes.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  But if there was an [2535] accompanying explanatory memorandum at least we would have some idea——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  It has not been customary for the last 20 years to have explanatory memoranda with amendments.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  With great respect, Sir, that is what is wrong with this House, what has been happening here for the last 20 years.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Deputy will have to find another opportunity for raising that.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I certainly sympathise with Deputy Mitchell on this one because what you say, Sir, is quite right, we have not had explanatory memoranda with amendments. But never have we had such a plethora of amendments of such substance within half an hour of having to debate them on the floor. The least we could expect would be an explanatory memorandum. Sometimes, as we were actually debating them——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Do Deputies realise that they are wasting their own limited time?

Question put and agreed to.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Amendment No. 63 in the name of the Minister. Amendments Nos. 64 and 75 are related. Numbers 63, 64 and 75 may be taken together by agreement.

Minister for Industry and Energy (Mr. J. Bruton): Information on John Bruton  Zoom on John Bruton  I move amendment No. 63:

In page 57, line 21, after “person,” to insert “including a liquidator and a receiver,”.

This amendment is designed to clarify section 67 of the Bill. It inserts the words “including a liquidator and a receiver” in the proposed amendment to section 3 of the Value-Added-Tax Act thereby making it clear that both categories of person [2536] are included in the provision as well as other persons, such as a mortgagee who might dispose of goods forming part of the assets of a taxable person in settlement of a debt.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  One is tempted to comment that, with the level of collapse in business and trade recently, it is as well that there were included liquidators and receivers because, the way things are going, we are going to see much more of them.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  That is the sort of temptation the Deputy should resist.

Amendment agreed to.

Minister for Industry and Energy (Mr. J. Bruton): Information on John Bruton  Zoom on John Bruton  I move amendment No. 64:

In page 57, line 23, after “person,” to insert “or in the course of the winding-up of a company,”.

Amendment agreed to.

Question proposed: “That section 67, as amended, stand part of the Bill”.

Mr. De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  Might I come in here, a Cheann Comhairle?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Certainly, Deputy.

Mr. De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  To be quite honest I am not sure which of these sections relating to value-added tax I should be making my comments on. But I would ask the Minister to consider the situation relating to VAT as paid by local authorities to contractors for the supply of materials which, under this new Bill, will be 5 per cent. I understand that if the council buy material to carry out the work themselves they pay 25 per cent. As I understand it anyway this results in work by local authorities — carried out by direct labour — being more expensive than if they had it done by private contractors. I have been told that in some cases this can result — as, say, in the building of houses by direct labour — a difference of £3,000, that it can cost a local authority £3,000 [2537] more to build by direct labour because of the VAT difference than if they hired a contractor to do it. I understand that up to 1978 it was possible for local authorities to reclaim the VAT involved but that, since then, they have not been able to do so. Could the Minister comment on that anomaly and say whether he intends doing something about it?

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  The position is that the value-added-tax is levied on a different commodity in the case of something being purchased from a contractor. In that case the value-added-tax is being levied both on the labour content and the materials content of the service provided by the external building contractor to the local authority, whereas, in the case of the local authority buying materials which they use direct labour to turn into a service — a building service or roadbuilding service — the value-added-tax is levied only on the material part of the total cost, not on the labour and material cost. Therefore, while there is a different rate, as the Deputy said, one must realise that one is not comparing exactly like with like.

Question put and agreed to.

Question proposed: “That section 68 stand part of the Bill”.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  This is the section which reduces the annual turnover limits for registration, as far as I can see, for deepsea fishermen from £15,000 to £12,000 — this is compulsory registration for value-added-tax. For businesses consisting of not less than 90 per cent of sale of taxable goods from £30,000 to £25,000; for a general trader and professional it is reduced from £15,000 to £12,000 and in respect of horse trainer and farmer from £15,000 to £12,000. We are opposed to this section. I would hope the Minister would be able to indicate to us why it is felt necessary to introduce it at this stage. Most of us here will have had experience of small traders who, even now, are registered [2538] for value-added-tax of the order of £15,000. Many of them find it next to impossible to cope with the complexities of the value-added system, as it applies to them. Of course it will become more complex with the higher rates of VAT that will apply after the passage of this Bill, which we are also opposing in the next section.

I am quite sure that many Deputies here really have had direct experience of small traders in every town and village of the country getting into a situation of nervous tension. I have met some cases that went way beyond nervous tension because they were unable to cope with the system. Many of them are small, corner shopkeepers, widows and people like that — without getting too emotive about it — who are very conscientious types, who want to be able to cope with the complexities and discharge their responsibilities. Some of them who have been included hitherto have found it impossible to do so. I can think immediately of two people who have gone out of business rather than face the tension and complexities of it because they are small traders. Let me say also — so that this will not seem to be political; although I suppose it is understandable that we do make political points from time to time — this happened during our time in Government, as I am quite sure it happens now, and some of these representations were made to me during that time. This is why I ask the Minister to resist the temptation to reduce further the liability for compulsory registration.

Let us consider a trader who has a turnover of £12,000. The markup in some sectors such as the grocery trade is only about 10 per cent because small traders are trying to compete with supermarkets. To retain their customers they have to give credit facilities. I have personal experience in this matter because I come from such a background. I am not making a personal case for my mother but I know the scene fairly well. Many of these traders are staying in business for the sake of being gainfully occupied and perhaps in order to maintain a level of social contact. The small shopkeeper is an important social element in our cities and towns. [2539] We are proposing to make people with a turnover of £12,000 liable for compulsory registration, thus reducing the figure from £15,000. A turnover of £12,000 would mean a gross profit of about £1,200 which, having regard to the provision of the income tax code, puts them well below the exemption limit for tax.

I would ask whether there is any reason for distinguishing between those who must register and those who need not. What kind of business would have a turnover of less than £12,000? Who could run a business of that kind? I would have thought that £15,000 was the smallest possible. Are we seriously implying that there is fraud because some of these people are not registered? There was a good reason at the time for not having compulsory registration. They paid VAT at source. To oblige traders like this to keep accounts for registration purposes will cause intolerable hardship to many. If the Minister can give a good reason for this measure we will listen.

There is a lot to be said for the introduction of a simplified form for small traders, as for farmers who are being brought into the tax net for the first time. There is also much to be said for showing a special degree of tolerance and understanding for old ladies behind their counters who live in dread of anyone coming to them from any establishment, particularly the Revenue Commissioners. They may not always be precise and give accurate information and they may not always be able to satisfy an inspector from the VAT division. I hope that none of them would come under the section dealing with late appeals because if they were assessed on such a basis they could not cope.

We are reducing the already low figure of £15,000 to £12,000 but I would have thought that because of inflation it should have been increased somewhat to ensure that we are applying the obligation of compulsory registration to the same category of people as we originally had in mind when introducing the regulation. I would ask the Minister to reconsider this matter on Report Stage.

The same would apply regarding deep [2540] sea fishermen, although I have not had the same experience in this matter as others. I would think that turnover in that business is not an accurate reflection of income and I would imagine that a deep sea fisherman with a turnover of £12,000 would not be engaged in a very major operation.

Mr. Daly: Information on Brendan Daly  Zoom on Brendan Daly  They cannot meet their loan repayments to BIM.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Deputy Daly has had considerable experience in this area. A farmer with a turnover of £12,000——

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  Or a horse trainer. One could have a few donkeys for that.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I do not know what a horse trainer is doing in that business if the best he can do is achieve a turnover of £12,000 per annum.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  Farming is not a business which is subject to VAT.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  This applies to a horse trainer and farmer who engages in both activities.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  It is a service which is ancillary to his farm.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  If the combined turnover of both activities is £12,000 he is certainly not much of a horse trainer and he cannot be much of a farmer either. My case is particularly concerned with small traders. Other Deputies are better qualified to speak on other areas. Deputy McLoughlin comes from the rich plains of County Meath where I believe they have some horse trainers and a number of farmers. He might be able to make a contribution on this section.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  I was looking recently at the tax returns for barristers and very few of them earned over £20,000 a year. When I told people they found it hard to believe.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  There are not too many deep sea fishermen in Dublin [2541] South-Central but there are a few deep Liffey and deep Grand Canal fishermen. I appreciate the difficulties nevertheless, because this not only affects deep sea fishermen but quite a lot of other people as well. I do not know the purpose of this section and perhaps the Minister could give some explanation as to why it is felt necessary to introduce it. In terms of revenue it will mean to the State the difference between the sales tax and the input of purchase tax. It will be a tax on the value added and I do not think that will bring in a great amount of money. It will assist in defeating tax evasion because if people are registered for VAT there is a record of their turnover and their incomes can be more accurately estimated. It might be of some benefit in regard to tax evasion. I cannot see what other benefits there can be. If the attraction is the record of income, perhaps the Minister would give some thought to zero rating of small traders or traders under a certain limit as outlined here.

Before I came into this House I made a good living from looking after small business people who could not manage their books. Some people may find it very difficult to believe but there are people who get positively into bad health when they get these demands. Some become almost suicidal. If you are a small trader turning over £15,000 in a year, you have purchases out of that, you have overheads out of that, you have very little income and very little to spare to make your business viable and make a living after a hard day's work without having to worry about all the paper work.

Yesterday I discovered there were at least a dozen different documents a person could get. I agree everybody should contribute but a great deal of what may look good on paper is really only giving a great many people unnecessary headaches. I do not know how many have a turnover of £100,000. Even with that turnover their income or profit must be very small indeed. It is nonsense to ask those people to sit down and make VAT returns when they do not know how to fill in these returns and must employ someone to do it for them and, having done that, they get no compensation.

[2542] This is an additional burden and many of them are so small they cannot afford to shoulder the burden.

I suggest the Minister should consider making arrangements in the VAT office to enable small traders who cannot afford to employ tax consultants or accountants to get assistance in making out these returns. Everyone who thinks of business people immediately visualises accountants and staff at their disposal, but there are many who would not have facilities of that kind. The small shopkeeper would not have such a facility; neither would the carpenter or the tradesman. Those do not know the first thing about bookkeeping or advice notes or anything else. People simply do not understand these things and unfortunately those responsible for bringing about this situation are apparently ignorant of the facts. Many of these people work seven days a week. They do not have pensions, or sickness benefit, or unemployment benefit, or anything like that. They are on the lowest rung as it were. Even if they have 30 per cent of the market they have less than £100 a week. It may be only £90 a week. Could there be any PAYE contributor in that category? Nobody wants to be unfair or unreasonable but before introducing a draconian section like this we should be absolutely certain there are good sound reasons for its introduction. Those below a certain income should be zero-rated.

Mr. M. Ahern: Information on Michael Ahern  Zoom on Michael Ahern  We are opposed to this section. I have had experience of dealing with traders in the £15,000 and £30,000 turnover bracket. The vast majority with groceries would be zero-rated. They do not work a five-day week from nine to five. They keep open until 10 o'clock at night and they do not have time to make out returns. Reducing the limit from £15,000 to £12,000 is a retrograde step. Instead of reducing the limit we should be raising it. These people are giving a good service and they cannot achieve a decent standard of living. I cannot see any reason for this section. What will the anticipated return be? It is inconceivable that the Minister should even think of putting an extra burden on these people. [2543] I ask the Minister to reconsider this matter.

Mr. Fitzsimons: Information on James N. Fitzsimons  Zoom on James N. Fitzsimons  It is difficult to see any justice in this section. Small shopkeepers are diminishing in numbers. They are being submerged by the conglomerates and the supermarkets. Those that remain are barely eking out a living. Indeed, they live in very frugal circumstances. It is only a few years ago when our shopkeepers kept the country going during the bank strikes. They could not give today the service they gave then because they could not cash cheques having no real turnover. I know the Minister is called “Iron Dukes” and, if he had any compassion, he would not introduce this section. In the circumstances credence is given to the sobriquet. Why should this group be so harassed? In my constituency some time ago two very small shopkeepers, widows, were prosecuted by the Department for overcharging by ½p on a particular item. Here it is proposed to put yet another imposition on their backs. We shall certainly have to oppose this section.

Mr. Daly: Information on Brendan Daly  Zoom on Brendan Daly  I protest against the section on behalf of the deep-sea fishermen. I am sure the Minister must be aware of the enormous financial pressures already on the fishing industry. In the last few weeks we have had the situation of the repossession of the fishermens' boats. Over the past number of years people have been aware of the difficulties experienced by the industry generally. The difficulties have been highlighted on occasions. This further imposition will add to the existing difficulties. There are threats to fishing stocks. There are threats from foreign fleets invading our shores. Our fishermen have enough worries without being saddled with this additional burden. I agree with Deputy Mitchell about the amount of documentation and paperwork involved. Fishermen have not the time to be involved in paperwork like this. They must be out involved in their business. I would like to know the kind of revenue the Minister is talking about here. What kind of revenue did he [2544] get last year? The Minister should keep in mind the very critical situation of the industry.

Mr. J. Doyle: Information on Joseph Doyle  Zoom on Joseph Doyle  There are very few small shops left in the city areas with this kind of turnover. They have all been pushed out of business by the supermarkets. I know from my rural contacts that in certain parts of Ireland there are still very small family businesses with this kind of turnover and they are providing a social service. Whatever justification the Minister has for reducing the £30,000 to £25,000 the provision to reduce the £15,000 to £12,000 should be left out.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  It seems extraordinary that the Minister would go to so much trouble to include a section such as this. He must have very compelling reasons. Of course he is not at all concerned with the business with a turnover of £12,000. He is concerned to include a few extra traders. We are talking about a turnover of about £33 a day which would yield a profit of about £3 a day. This will certainly not provide the Minister with any extra revenue and unless he has a very convincing argument it would be hard to give him this provision without a struggle.

When you bring people into the tax net you condemn them to seek outside help. Most of these people do their buying on a cash basis in the cash and carries. They pay their VAT at that point and then proceed to make a very small profit. If they must see an accountant it will cost them some hundreds per year so the Minister is virtually condemning them to be put out of business. Most of the goods disposed of throughout these outlets are zero-rated anyhow so there is a very small amount of money to accrue to the Exchequer but a very big outlay for the person who will be making the return because he will have to have the services of an accountant or some trained person. I cannot see what great advantage there is in this except that the Minister wants to get the last penny from the last trader. He seems to have brought about a situation where everybody will have to register for tax irrespective of turnover. If he [2545] had stated that we could have opposed it straightaway.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  I want to bring something to the Minister's attention. I am not blaming the Minister but I certainly am blaming some of the officials in the Department of Finance. I represent a county which has a good number of small traders and as a TD and a councillor I have been dealing with some of these small traders who got what I would call lunatic tax bills. Some people get into Government jobs and then look down their noses at the ordinary public. I know the Department of Finance and not the Minister put small traders out of business in my county because of their arrogant approach in regard to VAT returns and tax returns. That is a statement of fact and the Minister had better be aware that I am letting him know publicly in this House. I am also disgusted because some small business people come to me because people in the Department of Finance close their eyes, think of a figure and send that out as an assessment. They should not be allowed to get away with it. I see some of the officials smiling but they are Government officials paid by the taxpayers of this country. They should not set themselves up as high kings of Ireland and look down their noses at the ordinary taxpayer. The Department of Finance and particularly the tax office leave a lot to be desired. I must have sent hundreds of tax-free allowance certificates back this year which had to go through the Minister because if I wrote direct to the tax office it would take months to get a reply. Some of them had no PAYE allowance on them. Some of them had no PRSI allowance on them. There are 310,000 people in the public sector. We have a very large civil service. The press say that we are paid to legislate but there are a lot of people who, if they did not come to a TD when they found that their tax free allowances were down £12 and £15 a week, would not know the reasons for it. It is time the Minister was made aware of this. There are friends of mine who had a small busines. They just closed it up because of the arrogant attitude of tax officials and inspectors.

[2546]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I heard a lot of what I might call “buzz” words from the Opposition in this discussion. We have had “draconian”. We have had “compassion”.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  We are not buzzards like you, picking the flesh off every businessman in the country. Buzzard.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Opposition seem to be so concerned with making this kind of noise that very little attention is being given to another part of the problem which I am sure they must have met. Kildare is quite an exceptional place but it cannot be that exceptional. I am referring to the problem of traders and business people who are encountering serious difficulty in the running of their businesses because they are suffering from competition from people who are not registered for VAT. There is a problem. I would invite the Deputies opposite to think about that. I would mention the motor sector, for example. We have taken specific action there to deal with the problem. In the hotels section we have again taken action. A substantial part of the difficulty arises from the fact that we have people registered for VAT and they are competing with people who are not registered. It is very difficult to find a perfect solution to the problem of setting annual turnover threshold limits for VAT registration. If the limits are set too low we will be using scarce resources chasing very small tax payments and very small businesses will be brought into the net and will have to comply with the requirement to keep accounts. If the limit is set too high, medium sized businesses will find themselves increasingly unable to compete.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  That is total fantasy.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy is running a very effective interference but he is paying so much attention to running the interference that he is not thinking about the problems. We could lose the security that arises from the operation of this system. The thresholds were introduced in [2547] 1981 and since then VAT rates have increased, and that means that the amount of tax that does not come into the system because of the fixing of the limits has increased in amount. The limits are now too high because of the absolute amount involved here.

I have had representations from all sorts of businesses, hairdressers, dental mechanics, garages and others who made the point that people who are over the existing limit are finding it difficult to compete. That is why I put forward the provision which restores the real level of tax to what it was in 1981. Deputies have been jumping in at the deep end and have overlooked that there are the £12,000 limit applying to services and the £25,000 limit applying to people selling goods. Service businesses are not buying inputs so they have no substantial amounts of VAT on inputs and the VAT on their output is fairly level. Most of those who are selling goods pay VAT when they are buying them.

In those circumstances registration is a means of insuring that the business itself does not bear a net amount of VAT, which is a consumer tax, and that is why we offset outputs and inputs. Our limits at the moment are among the highest in Europe. That should indicate to Deputy M. Ahern why we have those provisions. We have a responsibility to the people who are now suffering. Many traders all over the country are not registered and that is why we should be very conscious about the people who are suffering from that.

Mr. Fitzsimons: Information on James N. Fitzsimons  Zoom on James N. Fitzsimons  Cash-and-carry businesses do not find it profitable.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy should have another look. There are many people in trades and professions to whom registration would be a benefit. Deep-sea fishermen are among them. People in agriculture would find registration an advantage. No fisherman is obliged to register unless he has turnover from other activities. Deputy Flynn asked why we have not brought everyone in. He came [2548] near to expressing the ideal position and perhaps he is to be congratulated on it.

The effect of the measure that is being proposed would be to bring about 300 traders into the register and the revenue will not be of great budgetary advantage this year because the time when the revenue will come in will be in July, August, September and October. The November-December VAT will not come until early next year. Therefore, the revenue income this year will be negligible but the effect on the competitiveness of a number of businesses will be fairly substantial.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  Did I hear the Minister say that 300 extra traders will come in?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Yes.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  Can the Minister give us the number of traders who will not be on the register?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  That is a difficult question to answer.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  Not many — the Minister has done the trick.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I would take issue with Deputy Flynn on that. I do not know and he does not know any more than I.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  There will be very few extra, and I think the Minister accepts it. He is not resisting the assertion too strongly.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy can make his assertion but neither of us knows how many people will not be registered, who will remain outside. It is for those reasons that we are making this provision. It is an important one for people who have to deal with competition from unregistered businesses.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  What is the estimated revenue for next year?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I do not have an estimate but I can say that this year it will be a very small amount.

[2549]Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  Would it be £1,000?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I do not know. Deputy Mitchell spoke several times today about people in the Revenue and the public service generally not understanding the people on the ground. They have even less chance of understanding the problems of those on the ground if Deputies on the ground show so little sensitivity to the problems. I remember very clearly a visit I had some weeks ago from a deputation of hairdressers whose only concern was to impress upon me the absolute necessity of ensuring that the nine or ten other hairdressers in their town who were below the current VAT registration limit should be brought into the system so that they could all compete on an equal basis.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Minister mentioned some specific categories.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Deputy McCartin offered before Deputy O'Kennedy.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I have an amendment down and I want clarification on the categories affected in the subparagraphs. As I understand it, category one refers to deep-sea fishermen; category two refers to business consisting of not less than 90 per cent of sale of taxable goods, reduced from £30,000 to £25,000; and category three refers to general traders and professionals, reduced from £15,000 to £12,000. It is category three that many of us are making an argument on. I presume “general trader” covers what might be loosely called the small shopkeeper. If I am wrong perhaps the Minister would say who precisely is covered by that definition.

The Minister referred to special cases, such as hairdressers. Hairdressers are obviously in a different category from small traders. If it is necessary to make an amendment to include such services, it should be possible to do that without affecting all other categories. There may be, as the Minister pointed out, a valid case for dealing with special categories, [2550] but I cannot imagine hairdressers and small traders in the same category for VAT registration purposes. If that is the case, why should the Minister not reduce the compulsory registration limit in the case of small traders.

Most small traders pay their VAT at the cash-and-carry and I do not think they have any competitive advantage over those who are registered whether they are supermarkets or other concerns which might have a higher level of turnover. I realise the Minister would not want to be misunderstood as implying that small traders who are not registered but who pay their VAT at the wholesale outlet level have a competitive advantage. They conform with all the standards and meet the requirements of the law. I would like clarification of that point.

For once it seems we are not caught in a straitjacket in discussing this amendment. The Minister has indicated that the revenue involved this year will be virtually nil and that next year it will not even be quantifiable. One can understand this. In this case the Minister will be concerned with equity and balanced treatment for the people in the same category. One can support him in that. If that is the case, why is it necessary to extend this to small traders? Many of these small traders, single people or widows, are not able to cope with this kind of thing and registration will pose terrible problems for them. Anything the Minister can do to alleviate that burden will be appreciated. We are not anxious to give any group an advantage over another group providing the same service.

I want to touch on another point. We had an amendment down to section 18 to include those engaged in smuggling, especially drugs. Smugglers have a very definite competitive advantage over bona fide traders against whom they are competing. Has the Minister considered applying VAT as well as income tax and corporation profits tax to those engaged in smuggling? He will not find anyone bleeding with sympathy for that group. If he could do anything in this area he will have our support.

Mr. McCartin: Information on Joe J. McCartin  Zoom on Joe J. McCartin  On a point of order: I [2551] thought Deputy O'Kennedy wanted to ask a brief question and I yielded to him. The point I wanted to make was as important as the point he made.

I am concerned about the small trader. Some time ago I made representations to the Minister to increase this figure to keep it in line with inflation. I made those representations as a result of the pleadings by many small traders and people who felt particularly vulnerable because of the demand to keep these accounts and have the figures available for the inspectors. If the Minister could not do better than his predecessors so far as the rate of inflation is concerned, he could have left it alone and time would have looked after it.

What happened is the Department advised him to respond to pressures from people who have to make returns while others do not. Surely the people who cannot get their interest above this limit do not present a significant threat. In my view we are responding to the politics of jealousy and cut-throat competition by people who have no regard for the social consequences of what they are doing. Even if it were only for the sake of a few vulnerable and ageing small traders who want to live out their lives as they have always done, he should have left things as they were.

These pressure groups asked me to do something about the hawkers because the hawkers had advantages. We brought in legislation and restricted the hawkers. Then they wanted the supermarkets restricted through various mechanisms. Before we introduce legislation we must be convinced that those advantages are real and that complaints made are well founded. We should not introduce legislation in response to imagined grievances. I accept the Minister's point in relation to the services area, particularly in relation to hairdressing, but as far as the small traders are concerned the Minister might have waited and allowed inflation to take care of the problem.

Mr. P. Gallagher: Information on Pat the Cope Gallagher  Zoom on Pat the Cope Gallagher  We do not intend letting the Minister off the hook in relation to deep-sea fishermen. The Minister [2552] feels that this will assist the fishermen. The Minister may take it from me that this will create hardships and problems for fishermen and that group between the £12,000 and £15,000 brackets who were not familiar with this system. They are being thrown in at the deep end. I would ask the Minister to be magnanimous in this and not to look for an outright victory through the Finance Bill.

Many fishermen are in dire straits at the moment. We are trying to encourage people to stay in the industry but this provision will act as a disincentive to fishermen. Will the Minister explain how this will help the fishermen? If the Minister would exempt the fishermen it would be of help to them and the Minister could perhaps introduce this provision at some later stage. The 1 per cent which operated in the past and which the fishermen could claim back on their turnover as a result of not being registered for VAT compensated them and they were satisfied with it.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  I do not know how to put across the point about the public service without it being seen as an attack on them. This is meant to be only a constructive criticism. The difference between the public service and the people with a small turnover to whom I refer is one of security. Insecurity is a great pressure and people involved in a small business are pressurised into working long hours to keep the job going without having the additional pressures of having to keep books and register for turnover. That total insecurity of people outside of the public service is not recognised by people in secure jobs.

The Minister is right in saying that we tended to deal with the £15,000 limit reduced to £12,000 for services rather than dealing with the £35,000 limit reduced to £25,000 for the sale of goods. The fishermen referred to by Deputy Gallagher in the £12,000 to £15,000 limit will not be affected by the reduction in the services limit. However, some people who would come under this new £12,000 services limit could end up with less than £90 per week even though their turnover would be £12,000. By the time they paid [2553] their overheads it is conceivable that these people would have less than 40 per cent of the total for income.

The Minister made a good point with regard to people who are not registered and who carry on trades as against the difficulties experienced by legitimate traders. I would ask that this be reviewed because if this provision does not function as it is intended to function we might at a future date have to repeal it.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  When replying the Minister said that he was dealing mainly in one section with services where people did not have to pay VAT on their purchases. I would like an example of that.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The distinction between the two categories is that the £25,000 limit as proposed in the section applies to people, 90 per cent of whose activity is selling goods. The other limit applies to people who are providing a service.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  They have to pay VAT on what they purchase to provide the service. For instance, hairdressers have to purchase soap, shampoo and so on.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  If the Deputy would wait for a moment.

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  I am seeking enlightment.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy is so eloquent and forceful in his articulation that it is very hard to enlighten him——

(Interruptions.)

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  ——when he keeps talking at the same time.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  It is nice to have a forceful personality here.

(Interruptions.)

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  For those who are providing services there is a smaller input in regard to their items subject to VAT than there is for those who are selling goods because their purchases would normally relate to labour. Most of their bills would [2554] be labour bills. The person selling goods is paying VAT as an input tax on a bigger proportion of the value of his total turnover than somebody providing a service. That is the distinction between the two categories. Deputy O'Kennedy has accepted the point I made in relation to the competition aspect.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  In respect of some services.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The same point ultimately applies in relation to the sale of goods. The higher the turnover the greater the potential impact on competitive capacity as between those who are registered and those who are not registered. It is part of the logic of the system.

(Interruptions.)

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The absolute amounts involved, particularly with the increase in VAT rates, get bigger as the turnover goes up so that the potential competitive problem gets bigger the higher the turnover becomes. That follows inevitably from the structure of the system.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  It does not.

(Interruptions.)

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy also asked about VAT on illegal trading. Apart from the fact that we have customs law to deal with illegal traders, the question of taxing illegal profits is a different one from collecting VAT on the illegal sale of goods. Almost by definition one will not get the kind of accounts from those people that would allow us to get the VAT. If we could get the VAT they would not be involved in illegal activity because they would be under control and by definition the application of VAT to the system would take away a lot of the incentive to trade illegally.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  It is a fair point. There is a balance there, as well.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It is a different kind of problem.

[2555]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  No, it is not.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Deputy Gallagher made a point about fishermen. Fishermen are not obliged to register for purely fishing activities. To the extent that they are paying VAT on equipment or input, we have arrangements for repayment of the VAT which they pay on their equipment. Their greatest problem will be with fuel oil and we have an arrangement to meet that problem. There is no obligation on fishermen, whatever their turnover on fishing activities, to register unless they have another activity which brings them into the registration limit. However, that is a different matter. Only if they had a turnover from another activity which came up to the limit for that activity would they be obliged to register, not for the fishing activities per se. There is a difference between those activities and the other economic activities.

Deputy Mitchell asked, in view of what I said earlier, if the limit could be reviewed at a future point. Limits obviously, of their nature, should be reviewed from time to time. We have reviewed them this year for a particular reason and I could not exclude for a moment the possibility of their being reviewed in the future, depending on what we find to the the effect of the new limits and the effect of the operation of the VAT rates on different kinds of activity, as we move on through time.

The change in VAT rates since 1981, given our limits, has perhaps exacerbated a number of existing problems. That is why we are making this change.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I am not suggesting that the debate should terminate at this point, but we may have reached the point of disagreement. I want clarification from the Minister on two matters. First, with regard to category three, am I not right in saying that that category whose turnover the Minister proposed to reduce from £15,000 to £12,000 applies to general traders and professional services? What is a general trader?

[2556]Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  Yes, what is a general trader?

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Category two refers to a business consisting of not less than 90 per cent of sale of taxable goods. That category reduces from 30 to 25. Exactly who are included in the definition of general trader, whose level has been reduced to £12,000?

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  We also want to know what a professional person is.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  What is the distinction between those two terms and the others?

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  We want an explanation on this. “General trader” could refer to many occupations and plenty of people could call themselves professional as well as general traders.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Category one comprises fishermen and farmers. Category two comprises people whose activities consist of up to 90 per cent of the sale of goods and category three comprises everybody else. That is how the services definition comes in.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  And what about illegal profits?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I have spent a few minutes explaining that. If we could catch them for VAT they would not be illegal.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I had some cross-talk with Deputy Mitchell but do not mean cross in the sense of being angry. Deputy Mitchell has diligently attended the House and made a case from time to time. That is something which even we on this side of the House appreciate. It is not easy to do when one is on the Government backbenches.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  It shows the courage of the man.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Anything which he has to say in this connection has not been with a view to hurting the public services [2557] but, as we are trying to do here, representing the interests of small traders. The Minister has understandably, by definition, said that if we knew the turnover of these people, meaning those engaged in illegal trading, they would not be illegal. The question of trying to impose VAT on illegal trade has a certain anomaly. If we knew what these people were earning, they would be in business and would probably not be illegally trading.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Except for some of the categories of their activities.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  How are we going to ascertain the income of these people for income tax purposes when we do not know what they are earning? The Minister is proposing to do that under section 18. How is he going to ascertain their liability for corporation tax purposes, as he is proposing to do under section 18? If one knew enough about their activities to be able to assess their liability for income tax——

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  You are not going to catch them there.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Minister is happy enough to smile, but he would not know enough about them to assess their liability for income tax and corporation tax, as the case may be. I can see certain problems arising there. Can one do it on the one hand in respect of income tax and corporation tax, but not in respect of VAT? The Minister might explain that to me.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I am glad that this discussion has come up. I know that Deputy O'Kennedy had been anxious to say a word or two on section 18, as I was indeed myself. There is a difficulty in knowing the extent of illegal profits. The purpose of section 18 is to make it possible for us to make an assessment on the basis of what may be illegal profits.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  May be.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Consider in section 18 how [2558] we approach that definition. We have the concept of other miscellaneous income there, also. It is for the very reason that the Deputy is talking about. Section 18 is concerned with giving us statutory powers to do that, once we find that somebody has an illegal income or an unexplainable income. In order to succeed we need some of the other provisions in this Bill which give certain powers to the revenue authorities to inquire from people where they got the income. That poses a separate kind of question. That is one kind of operation. The charging and assessment of people for VAT is a different kind of operation. That system is for the most part based on self-assessment and it works.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Self-assessment?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It works on the whole because for somebody who is dealing in goods which are subject to VAT there is an interest for that person in accounting for the VAT which he pays on his inputs and for the VAT which he charges on his outputs so that he, as a trader, will not have to bear any of the weight of the tax, VAT being a consumer tax at the end of the day.

My point about illegal trading is that much illegal trading arises through people bringing goods illegally into the country in order to avoid paying VAT, for example in order to avoid paying VAT at point of entry, which is one of the legacies which the Fianna Fáil Government have unfortunately left with us.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  The Minister's Government have it still. They did not change it. The Minister should not use that excuse.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I would like to find a way of replacing the £120 million-odd of revenue that the previous Government robbed out of the following year.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  Now, come off it.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Oh, Lord, make us pure, but not yet.

[2559]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I would be extremely happy if I could find a way of doing that.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  Why does the Minister not change it? It is his responsibility.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  That would relieve many problems. Was that what the Deputy's party had in mind when they said that they were going to——

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  The Minister should not be passing the buck.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  ——go for a current deficit of £150 million? Is the Deputy now telling us that they were going to abolish VAT?

Mr. Wilson: Information on John P. Wilson  Zoom on John P. Wilson  The Minister said he would change it.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  That is it. He did say he would change it.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Is the Deputy now telling us that his Government were going to abolish VAT at the point of entry the year after they brought it in?

(Interruptions.)

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  They recognised the monumental errors they had made.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  I am surprised at the Minister. He is under their thumb.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I can tell Deputy Connolly that I would be one of the happiest people in this country if I could find a way now of getting rid of that system. These dissertations are very amusing, but have nothing to do with this section with which we are dealing.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  I find the Minister amusing as well. He was going to do away with all this VAT. He told us before he was elected that he would.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Oh, no, Deputy. There are people in the Deputy's party who seem to have a better insight than he has into the policies of my party and of the Labour Party.

[2560]Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  I would not go into the Minister's party because it is very radical and he is reaping results which he regrets.

(Interruptions.)

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  They will soon be calling the Minister Augustine Dukes —“Oh, Lord, make me pure, but not yet.”

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  It is a question of, O Lord send me into the House.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  The Deputy will be sent out of the House if he does not desist from interrupting.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It would be both amusing and interesting to carry out a further exegesis of what Deputy O'Kennedy has introduced. There are sins both of omission and of commission and so far as commission is concerned the Deputy must be miles ahead of the rest of us.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  We have heard of the Pharisees and the publicans. Now we know where they are.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  On the point raised by Deputy O'Kennedy, people bring in goods illegally in order to avoid paying VAT. If we were charging them VAT on the goods they were bringing in, the activity would not be illegal. The problem of the taxation of illegal profits is totally different from the problem of getting VAT in respect of goods imported. In most cases, anyway, by the time we detect the existence of illegal profits the goods have been sold. But it is a matter that I would consider. If we were to go down that road I wonder, for example, what rate of VAT we would put on heroin but in the nature of the system that does not arise in the same way as the problem of the taxation of illegal profits arises.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I am not saying that we are engaging in a battle of one over the other in this case. On that last admission that the Minister would go down that road if it were feasible, if the Revenue reach the stage of determining the [2561] incomes of people engaged in illegal activities, and that is what is hoped for under section 18——

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  And in other sections.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  ——in the selling of illegally imported videos, televisions and so on, they would know also that if these commodities had been disposed of through proper legal channels they would have attracted VAT. At least this might discourage such people who obviously would have a competitive advantage over bona fide traders. I am acknowledging that there could be anomalies but in any event we are moving into an anomalous situation. Basically, we are aiming to discourage illegal activities, to stop them at source and to that end we must take actions that are rather unusual but I do not see why we should dismiss the possibility of applying a VAT charge once the income of the person smuggling videos and televisions and then selling them has been established.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Perhaps we should not spend too much time on this. I would make the point, though, that it is one matter to establish that someone had a given amount of income apparently from illegal sources but it is another matter to establish the amount of business involved. If we catch them with the goods, the point of the operation is to prevent them from selling them. There are provisions in the customs laws for fines and for the confiscation of goods brought in illegally.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The point is that in order to have made an income they must have made a sale and having made a sale, they could be liable to VAT.

Mr. P. Gallagher: Information on Pat the Cope Gallagher  Zoom on Pat the Cope Gallagher  On a point of clarification, the Minister said that this provision will assist fishermen but then went on to say that it will not affect them. Also, in the case, say, of a fisherman who earned £12,000 last year from another business and prior to registration and who earns £12,000 this year, how will the [2562] Minister assist that person if he must become registered? There seems to be some ambiguity here.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I do not think there is ambiguity. I made the general remark that in some circumstances registration could be of benefit to a fisherman. That would be, for example, in the case of making it easier for him to have VAT repaid on his income. There are people who are not obliged now to register in respect of fishing or farming but who, if operating on an intensive basis, could find that it would be to their advantage to register. That was the only point I was making in that connection. I was not saying that the provisions are designed to be of benefit to fishermen in relation to the operation of the VAT system. My comment was very general and was not meant to be taken as putting pressure on such people to register.

The second part of the question relates to whether a fisherman has another business, the turnover from which exceeds the new VAT registration limit. That is a different problem. A business other than fishing to which the £12,000 limit would apply would be totally separate from the fishing activity. Should that same person have another business to which the £25,000 limit would apply, that too, would be separate from the fishing activity. The point is that as a fisherman he would not be obliged to register for VAT. Therefore, the change in the limit would not affect him.

Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  What will be the position of a person who is both a farmer and a fisherman?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  If someone who is both a farmer and a fisherman has another business that is registered for VAT he has my sympathy because he would not know whether he was coming or going.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  The Deputy is talking about small farmers.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  If he is a large farmer and a small fisherman or a small farmer and a large fisherman neither of those activities [2563] would have to be registered for VAT [2564] so the matter would be one for himself.

Question put.

Allen, Bernard.
Barnes, Monica.
Barrett, Seán.
Barry, Myra.
Barry, Peter.
Bermingham, Joe.
Birmingham, George Martin.
Boland, John.
Bruton, John.
Bruton, Richard.
Burke, Liam.
Carey, Donal.
Collins, Edward.
Conlon, John F.
Coogan, Fintan.
Cooney, Patrick Mark.
Cosgrave, Liam T.
Cosgrave, Michael Joe.
Coveney, Hugh.
Creed, Donal.
Crowley, Frank.
D'Arcy, Michael.
De Rossa, Proinsias.
Desmond, Eileen.
Donnellan, John.
Dowling, Dick.
Doyle, Avril.
Doyle, Joe.
Dukes, Alan.
Durkan, Bernard J.
Enright, Thomas W.
Earrelly, John V.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Oliver J.
Griffin, Brendan.
Harte, Patrick D.
Hegarty, Paddy.
Hussey, Gemma.
Kavanagh, Liam.
Kelly, John.
Kenny, Enda.
McCartin, Joe.
McGahon, Brendan.
McGinley, Dinny.
Mac Giolla, Tomás.
McLoughlin, Frank.
Manning, Maurice.
Mitchell, Gay.
Mitchell, Jim.
Molony, David.
Naughten, Liam.
Nealon, Ted.
Noonan, Michael. (Limerick East).
O'Brien, Fergus.
O'Brien, Willie.
O'Donnell, Tom.
O'Sullivan, Toddy.
O'Toole, Paddy.
Owen, Nora.
Pattison, Séamus.
Prendergast, Frank.
Quinn, Ruairí.
Ryan, John.
Shatter, Alan.
Sheehan, Patrick Joseph.
Skelly, Liam.
Spring, Dick.
Taylor, Mervyn.
Taylor-Quinn, Madeline.
Timmins, Godfrey.
Treacy, Seán.
Yates, Ivan.

Ahern, Michael.
Andrews, Niall.
Aylward, Liam.
Barrett, Michael.
Barrett, Sylvester.
Brady, Gerard.
Brady, Vincent.
Brennan, Mattie.
Brennan, Paudge.
Brennan, Séamus.
Browne, John.
Burke, Raphael P.
Byrne, Hugh.
Byrne, Seán.
Calleary, Seán.
Colley, George.
Conaghan, Hugh.
Connolly, Ger.
Coughlan, Cathal Seán. [2565]Lyons, Denis.
McCarthy, Seán.
McCreevy, Charlie.
McEllistrim, Tom.
MacSharry, Ray.
Molloy, Robert.
Morley, P.J.
Moynihan, Donal.
Nolan, M.J.
Noonan, Michael J. (Limerick West)
O'Dea, William.
O'Keeffe, Edmond.
Cowen, Bernard.
Daly, Brendan.
Doherty, Seán.
Fahey, Francis.
Fahey, Jackie.
Faulkner, Pádraig.
Fitzgerald, Liam Joseph.
Fitzsimons, Jim.
Flynn, Pádraig.
Foley, Denis.
Gallagher, Denis.
Gallagher, Pat Cope.
Geoghegan-Quinn, Máire.
Harney, Mary.
Hyland, Liam.
Kirk, Séamus.
Lenihan, Brian.
Leonard, Jimmy.
Leyden, Terry. [2566]O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond J.
Ormonde, Donal.
O'Rourke, Mary.
Power, Paddy.
Reynolds, Albert.
Treacy, Noel.
Tunney, Jim.
Walsh, Joe.
Walsh, Seán.
Wilson, John P.
Woods, Michael.

Tellers: Tá, Deputies Barrett (Dún Laoghaire) and Taylor; Níl, Deputies V. Brady and Fitzsimons.

Question declared carried.

Section 69 agreed to.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Amendments Nos. 68, 69, 70 and 71 are consequential on amendment No. 65. Therefore we will take amendments Nos. 65, 68, 69, 70 and 71 by agreement. If amendment No. 65 falls, amendment Nos. 68, 69, 70 and 71 cannot be moved.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I should have thought that amendment No. 66 would have been included as well.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Yes, we will take it then.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  What are the amendments we are taking now?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Amendments Nos. 65, 66, 68, 69, 70 and 71.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I move amendment No. 65:

In page 58, line 20, to delete “23 per cent.” and substitute “20 per cent.”.

These amendments are designed to propose to the House that the level of increase, as announced by the Minister in the budget, on VAT rates of 5 per cent would be reduced by 3 per cent to allow for an increase of 2 per cent.

Before we start, might I clear one point again, not wishing to anticipate the Minister's reply but, as has been demonstrated, we are under a disability on this side of the House that we have to accept. We cannot propose to the House — because of your rulings, a Cheann Comhairle, and not just yours but those of your predecessors — that we will raise revenue in another direction to compensate for the loss of revenue in this area. I have to accept your ruling that anything that involves a charge on the people——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Chair has to be very careful.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I have your ruling in my pocket, a Cheann Comhairle.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Deputy has addressed that assertion to me a number of times today. This is in accordance with Standing Orders. However, if it would be helpful to the Deputy, there is nothing to prevent him making a speech.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  That is a different matter. I appreciate that. I had proposals down to raise extra revenue in some places, as had The Workers' Party in regard to other places. They, like us, have been obliged by the rules of the House to accept that, while we might have ideas as to where extra revenue should be raised and could propose to the House where this should happen to compensate for a loss of revenue in other [2567] sectors, we are not free to do so. One can say all kinds of things after that but the fact is that, not having the power, the words do not count for very much. On that basis I simply made a preliminary point that I know that the Minister will be tempted, as he has been already in the debate, in reply to our proposal here to make the point that the Revenue cannot afford the loss which would follow as a consequence of the reductions in the VAT levels we are proposing. We will not know until the end of the year whose estimates are right in respect of value-added tax receipts. I have suggested already — and we do not need to get into a terrible hassle about it now; the end of the year will determine who has been right and who has been wrong in this — that the Minister's budget estimate for VAT receipts is an underestimation. I suggest also that this is borne out by the quarterly returns which show, it has to be said, not a buoyancy in VAT revenue — far from it — but demonstrate that the Minister's estimate was an underestimation. I am not saying this was deliberate but we disagreed on this from day one in regard to the Minister's Budget Statement and in discussions afterwards. That being so, the yield to the Revenue which the Minister is estimating is less than it will turn out to be.

In reply to a written question by me last Tuesday the Minister said that the cost of the reductions I am proposing would be of the order of £100 million in 1983, £80 million by the substitution of 20 per cent for 23 per cent, £12.1 million by the substitution of 32 per cent for 35 per cent and £9 million by the substitution of 18.75 per cent for 21.74 per cent. These are gross estimates and there would be a level of buoyancy which would emerge as a result of the increase in sales of articles in these categories. It would be compensated for to a considerable extent by the buoyancy which would emerge with a VAT increase of 2 per cent as against 5 per cent.

I will give one practical example. Some time ago during the term of the Minister's predecessor it emerged that domestic pots, pans and teapots which cannot be [2568] categorised as luxury goods were at the highest VAT level. I made representations to the then Minister to take these items out of that category and the reply I received was that if they were taken out there would also have to be an exemption for items such as knives and forks. I would support their exemption as well because they are not luxury items in any home. It also happens that some native industry is very much concerned. I made a statement of personal interest earlier when I said that I happened to have a very small shareholding worth a couple of hundred pounds in a company in my home place, the aluminium company in Nenagh.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy should move up country to Newbridge.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Those records will be on the Minister's files and his advisers will have been aware of the representations I made last year. I received a promise that this matter would be looked at in the context of this year's budget and Finance Bill. It touched a chord with the Minister and his officials but I am not aware that anything has been achieved.

The level of VAT will affect net sales. One would come to the conclusion when listening to Border traders who have come to meet me and the Minister in connection with the impact of VAT on their business that the Revenue were losing a very substantial sum of money. I do not question their bona fides but on the other hand I cannot give the figures they suggest as being absolutely reliable. In their view there is a loss to the Revenue of about £25 million. I cannot vouch for this but it is quite clear that we are losing significantly to our Northern counterparts and to the Minister's counterpart, the Chancellor of the Exchequer in Britain. Sir Geoffrey must be very pleased with us these days in that we are giving a considerable incentive to cross-Border trade. That would reduce to a considerable extent the global figure of £100 million which the Minister has given but I do not think he has taken it into account in producing these figures.

Another important element is that [2569] these have an impact on the CPI and the Minister has acknowledged that the impact of indirect tax increases, including VAT, on the CPI will be 3.5 per cent. We have said, with some support from other authorities, that with the roll-on effect it will be about 4 per cent. That, too, can act in ease of what the Minister is trying to achieve, a reduction of inflation in line with what his predecessors in Government managed to achieve. From November 1981 to November 1982 there was a reduction from 24 per cent to 12 per cent.

The level of indirect taxation is such that we have almost reached the point of diminishing returns. I recall that during my period as Minister for Finance one of the points always borne in mind was that in introducing any increase it was at least as important to bear in mind the point at which one lost the increase in terms of the inflationary impact and the little extra revenue that would accrue. We have very carefully measured the amounts we feel should be reduced in the Minister's proposals. These amounts were considered in Government by the Minister's predecessors, having regard to what we saw as the needs of the Revenue and the need to keep down inflation. The Minister may feel he was constrained to take certain actions and if he had been free to take his own decisions he might have acted more on the side of the control of public expenditure than by increasing the level of indirect taxation, which has an undesirable effect on the CPI and shows itself in a range of ways such as high interest rates. The Taoiseach has said that if interest rates do not come down he will want to know the reason and I wonder if he has inquired as yet.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  There is a constant process of information.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I remember the manner in which it was said. Was the Minister in Brussels at the time or was it the Taoiseach? They do not always sing the same tune.

I have made my point. In acceding to this request the Minister will not just be giving something away. I do not expect [2570] as much loss to the Revenue as he suggests. I believe the loss will be considerably less while the return on the other side will be of considerable benefit. I strongly commend the amendment to the Minister.

Mr. G. Brady: Information on Gerard Brady  Zoom on Gerard Brady  I support the amendment. Again, I am at total variance with the Minister's ideological approach to this penal taxation.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Where will the Deputy get another £150 million tax?

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Deputy Brady without interruption.

Mr. G. Brady: Information on Gerard Brady  Zoom on Gerard Brady  Outside this House there are numbers of business people valiantly striving for survival and I want to bring that home to the Minister. I know he has the capacity to cope with the situation — I mean this in all sincerity — provided he focuses his thoughts in the proper direction. There are two sides to all this. The VAT is like a tap one turns on at will. All the provisions in this Bill are an admission that the taxation system is beginning to creak and we have reached the point where it is just a question of trying to find more money without taking a proper look at the massive public spending that is going on on the other side.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy should preach that gospel to his own party.

Mr. G. Brady: Information on Gerard Brady  Zoom on Gerard Brady  The Minister sounds like a long-playing record. This is a stone-walling exercise. There is absolutely nothing in it for private enterprise and the Minister's intention is to steamroll through all these provisions without any regard to their consequences on business and on the public generally who have to struggle to keep going. Business is in a crippled state at the moment. If the Minister would even give some incentive we might be able to find ourselves in accord.

Our amendment is designed to alleviate the situation and reduce the burden. The Minister tells me to preach that [2571] philosophy to my colleagues. I have a democratic right to make my point and the Minister's is a glib response which does not add anything to this debate.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It is very important.

Mr. G. Brady: Information on Gerard Brady  Zoom on Gerard Brady  I would ask the Minister to refrain from advising me. I am arguing my case as I shall argue it on every available opportunity because I have some concern for private enterprise. I am arguing the case for private enterprise. I am arguing on behalf of the construction industry and every other enterprise. Every facet of our industrial arm is under attack. There is literally no enterprise which can afford to pay these penal impositions. According to the Minister's statement today we have borrowed within the last five months £650 million in foreign currency, in Deutschemarks and Swiss Francs. I appeal to the Minister to take a look inwards and try to put our own house in order and then give incentives to the people to expand the economy. I do not appear to be getting through to the Minister.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The Deputy is getting through very well. I mean that quite seriously.

Mr. G. Brady: Information on Gerard Brady  Zoom on Gerard Brady  I emphasise that business must be given a breathing space. I know the Minister has to take certain steps and I realise some impositions were necessary but I cannot understand why not one single incentive was given. All that is done is to impose more and more taxation. No effort is made to lessen the burdens. I suggest the system is running out of control. The system is like the headless hen running frenetically in all directions before she collapses. There is no real direction at the moment. We are half-way through the Bill at the moment. Before the end of the Bill I hope I shall be able to impress on the Minister my point that private enterprise should be given a chance. I appreciate the enormity of the Minister's task. I trust the Minister will list for me a few of the incentives he intends as an input into the economy [2572] before it is run into the ground. That is literally what is happening at the moment. I am not just speaking for myself. This is the Minister's opportunity. He can make adequate provision for incentives without loss of face. The matter is too serious for political point scoring or anything of that nature. I appeal earnestly to the Minister to take my advice.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  Ba mhaith liom labhairt ar an chuid seo den Bhille chomh maith. I ndhiaidh an chéad chuid den Bhille a bhí ag plé le cáin ioncaim, sílimid gurb é seo an chuid is measa den Bhille ar fad. Táimid in éadan na gcánacha indíreacha agus ní dóigh liom gur féidir linn a rá go bhfuil morán maitheasa sna leasuithe atá curtha síos ag Fianna Fáil. Tá siad ag lorg lagdú 3 faoin gcéad, ó 23 faoin gcéad go dtí 20 faoin gcéad, agus ó 35 faoin gcéad go dtí 32 faoin gcéad. Dúirt an Teachta Kennedy cén fath go raibh air na leasuithe eile a chur síos ach ina dhiaidh sin tá Fianna Fáil ag moladh meadú sa chuid eile de na leasuithe.

We oppose this section generally because of the huge increase in indirect taxes which it means. Already from figures given by the Minister for Finance we have a figure of indirect taxes in 1981 of 44.7 per cent of taxation. The equivalent figure in the UK was 27.5 per cent. Going right through the EEC countries none of them exceeds 30 per cent. In our case 44.7 per cent of taxation is indirect taxation. It is a regressive tax. Indirect taxation bears heaviest on those with lowest incomes. Those with the lowest incomes spend all their income and it is a spending tax. Those on higher incomes have some savings. Indirect taxes in many cases are a tax on life itself. There are taxes on food. In this section we have the introduction of a tax on fuel which was zero-rated up to this. This is a very miserable tax to put on when inflation is so high. To put a tax on coal, turf, gas and central heating oils is a tax on the elderly and on life itself.

The increase in VAT here will bear heaviest on those with lower incomes, mainly the PAYE workers. Others who pay VAT can manage to escape paying, [2573] like income tax. All the discussion on the crock of gold and tax outstanding has so far been in the realm of income tax. There has been little discussion on the amount of VAT outstanding. It is not the consumer who does not pay the VAT, so who is refusing to pay it over? At 31 December 1982 the balance outstanding for the account year 1979-80 was £223 million and of that £16.27 million was VAT outstanding. The amount outstanding for the year 1980-81 last December was £30.76 million VAT outstanding. That is a total of almost £47 million VAT outstanding last December. That is the area of delay in payments, but there is a whole other area of evasion and avoidance of VAT payments just as in the case of income tax. It is a tax that is simple to collect from the consumer. It is rather difficult when you go into the area of traders, self-employed and so on.

Deputy De Rossa earlier raised an anomaly in VAT payments by local authorities and contractors. It apparently comes under this section 70. I see here that the terrible mistake of putting VAT on candles has suddenly been discovered by the Minister and he has very kindly zero-rated candles, thus presumably costing the Exchequer an enormous number of shillings and pence. I suppose it will be useful when the price of electricity goes up again. Nobody will be able to have electricity so there could be a huge increase in the sale of candles.

However, I want to deal with the next sentence, which deals with the liability to tax of the supply of buildings, building work and certain services connected with agriculture which is being increased from 3 per cent to 5 per cent with effect from 1 March 1983. I would ask the Minister to look at this. My information on this has come mainly from County Wicklow. It is to the effect that if the local authority buys materials to do a job by direct labour, it must pay VAT of 23 per cent on them. On the other hand, if a contractor does a job for the local authority VAT is charged at only 5 per cent. If Wicklow County Council buy a ton of bitumen from a company called Coltex it is charged to them at £164 plus VAT bringing the total charge for a ton of [2574] bitumen to £201.70 whereas if they ask Coltex to lay the ton of bitumen they only have to charge 5 per cent and the total cost of the job is only £199. The council officials estimate that this anomaly adds £3,000 to the cost of each house built by direct labour which means they build 13 houses less in a year for the amount given by the Department of the Environment. The history of this apparently is that up to 1978 local authorities could reclaim the VAT they pay on certain materials purchased for use by direct labour in the area of roads, water services, sewerage, housing etc. That was abolished by the Value Added Tax (Amendment) Act, 1978. From the beginning of 1979 they had to pay in the normal way without the right to reclaim. At that time the standard rate was only 10 per cent. It seemed a lot at that time but now it seems very little. The contractors' rate was 3 per cent, the difference between them being only 7 per cent.

However, following the recent budget the normal rate went up to 23 per cent and the contractors' rate has gone up to 5 per cent, meaning an 18 per cent difference. This has caused enormous problems for local authorities. The Minister should deal with the anomaly by restoring the pre-1979 situation when local authorities could reclaim that, or he could allow local authorities to purchase materials for direct labour purposes at the 5 per cent rate. In one way or another it would give help to the local authorities, not just in the area of houses, roads, sewerage and water services, in respect of which they have to pay the 23 per cent. Local authorities need all the help they can get at this time because there is no money coming from the Department of the Environment to assist them. The Minister could help out enormously by a small change in the system.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  I know the Minister realises that paying VAT nowadays is a big talking point when he goes to buy anything. That includes more than the manufacturers and big business: it includes every housewife and consumer in the country. It is the one kind of tax that is resented greatly by the vast majority of citizens.

[2575] When it was introduced initially at the lower level, and indeed after some subsequent increases, it was tolerated. It was accepted as a means of getting huge sums of money in the easiest way possible when a Government needed the revenue.

However, this last imposition has attracted more than normal objections by the consumers. They have shown that rejection in their lack of spending. There are other reasons for that, like lack of disposable income, but the main objection is at the level of tax. VAT is an everyday experience, unlike income tax. Many retailers, by way of advertisements and shop notices, point to the percentage of commodity prices going to the Exchequer. I am sure the Minister will agree that he has overstepped the limit. The reason for our amendment is to show that it might be possible to get some of the money in other ways.

I join with Deputy Brady in saying that the general opinion outside on this Bill is that its general thrust is to attract more money to the Exchequer without any give whatsoever. It is the lack of give that is causing such disharmony throughout the economy. The matter of incentive is important. Perhaps the odium of the people might not have been so enormous if the Minister had included, either in the budget, in this Bill or in the Social Welfare Bill, some provision to reduce the impact on the people.

The business community are particularly concerned, and the Minister should appreciate it. There is no incentive in the Bill to enable them to continue investing risk capital. There is no incentive for shareholders. Their big complaint is that they see this as a further example of the lack of concern of the Government to protect what is traditionally an open economy. Apart from the concern of the housewives, the consumer, young people do not see any way forward because this Bill does not provide any hope of employment for them. On the contrary, they see this and other sections as not holding out any hope in the matter of job creation.

One has only to talk to people in the main street of any provincial town to know precisely what is happening in the [2576] retail business. You often get a better indication in the main street of towns with populations of 5,000 to 8,000 than in the capital city. They are not selling their goods. The banks are carrying the vast majority of small and medium businesses. This will not improve and this section and its VAT impositions are probably the main reason for that. There does not seem to be any redress whatsoever.

It is the easiest thing in the world to say that competitiveness has been lost because of all the increases, corporation tax and all the other kinds of taxes the Minister has included here. We have become accustomed to have a whole range of taxes included in one Bill but not so many years ago a Finance Bill that would include one or two of these taxes would have been voted down in this House. It is dreadful to contemplate what the total impact of this Bill will be at the end of the year on ordinary living standards. We can talk about economics, fiscal policies and all the rest, but it comes down to the fact that these measures will have to be met by the vast majority of the people, ordinary people trying to pay their way.

The Minister must recognise that people cannot match up to this. We are not offering the incentives or the opportunities for employment for the community. I cannot imagine why the Minister would go to the trouble to place the new 5 per cent VAT on consumer goods. I do not know the amount of money that will come from this but it indicates to me that it is only a starting figure. It has been the pattern and tradition in regard to other VAT ratings to start at a low rate and increase it the following year. The biggest impact will be on those on meagre earnings. A sum of 30p seems very small these days but an imposition of 30p on a cylinder of gas for somebody on £34.25p a week is a hefty increase if they are to try to provide heat. There is no relief from that. I thought it would have been the Minister's attitude in hard times not to create new taxes on commodities which would be regarded as essential. We all thought the Coalition had learned [2577] their lesson when they introduced VAT on clothes and shoes, which was a cause of a major upset. Now they are starting a new VAT scale. We cannot support this because the money could have been gathered in other areas.

The Minister might ask where they could find that kind of money. I will make one suggestion — I go back again to the question of smuggling. The Minister commented on that in his Budget Statement but very little has been done, apart from a few weekend efforts which, I presume, it was hoped would dissuade people from smuggling. We have created an industry in cross-Border smuggling. This is threatening the fabric of communities on this side of the Border. The increased incidence of smuggling has not been tackled by the Government. Let us take one simple item, spirits. The extent of smuggling in this commodity is enormous. Distributors of spirits in the Border areas have had their sales reduced by over 50 per cent in the last 12 months. It is estimated that the quantity involved is about 100,000 cases per year. Even if the figure is only close to that, this means there is a loss to the Exchequer of over £58 million not including VAT which would be about £2 million, and there would be other taxes as well. If this money were collected, and it could be done if the Minister and his officials put their minds to it, it could relieve the impact of VAT on bottled gas for old aged pensioners.

Irish Distillers have admitted that their exports north of the Border have increased dramatically. The amount of spirits legally exported free of excise duty to the North and coming back South and being sold over the counter, without VAT or excise duty being paid, must run into an enormous amount of money. If there is a gap to be plugged the Minister has an obligation to plug it. As I said this has created a new kind of industry and a new way of life. Because some people are making enormous illicit profits, communities are being affected and business people are moving to other areas and their investments are going for naught. Now is the time to do something about this. Several ways have been suggested [2578] to tackle this problem. If we had the goodwill of Irish Distillers a lot could be done by way of identification to make it more difficult to sell illicit spirits. Publicans' licences, if they were convicted as being receivers ——

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  They are.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  I believe there is a great deal of bootlegging going on in the Republic. This liquor is manufactured but is exported to the North and is on sale in the South and no duty or VAT has been paid on it. This means there is an enormous loss of revenue. To dispose of this commodity new businesses are being formed. There are no VAT returns from this area either. This is a contributory factor in the reduction of VAT returns from that trade. I believe a great deal of those smuggled spirits are stolen. This is an area where much needed revenue can be harvested and the Minister will be doing a service to the Exchequer and the taxpayer if he puts a stop to this smuggling.

The Minister said he had to take considerable measures to deal with the hotel and related industries as far as the VAT situation is concerned. VAT as applied to the hotel industry and tourism generally is more than just a contributory factor to the state of crisis that exists in that industry at present. For the past few years tourism has been a second string earner in the minds of certain individuals and it was never that way. At one time it was our biggest earner. In my view this industry has been neglected. The turnover of £760 million is a sizeable figure and it generates a lot of money for the Exchequer — in 1981 approximately £91 million — and this is an area which can be worked on to provide more money. Foreign currency earnings must have a significant bearing on our Exchequer returns. More concern will have to be shown in this area. One reason for the present crisis in this industry is VAT. The Minister will say that this year VAT is at the same rate as last year, but the Government increased it to 23 per cent, and bringing it down to 18 per cent is not really making any concessions. The Minister should [2579] take a bold initiative sooner or later so far as VAT on the hotel industry is concerned and see how VAT is applied in other EEC countries. The Minister knows the average VAT rate is around 9 per cent. Our VAT rate is 18 per cent. This means we are at a disadvantage and this must bear heavily against tourists bringing foreign currency here. We will have to reduce our VAT rate. People may ask if it will cost a great deal. It is estimated that if the VAT rating of 18 per cent were reduced to the European average of 10 per cent, it would mean a loss of revenue to the Exchequer of about £4 million. If the price structure could be controlled properly, with the business that the new VAT rate would generate, it could have the opposite effect so that the £4 million could be offset and we could bring back an industry which should be of primary importance to us.

The whole question of reducing VAT on hotels and accommodations is not new. There is precedent for it in Belgium, where VAT was reduced from 16 per cent to 6 per cent. I know that because of EEC regulations we cannot go any further than that. To cut the VAT rate back to 10 per cent would provide a much needed boost to the industry which would generate more growth. This would be taking the type of initiative that we must take to maintain our market share in that area. This would also have an impact on employment. Every night people are raising questions here about industries going to the wall. It is not whitewash to say that 26,000 people are working in the hotel industry. Fresh thinking will have to be applied to maintain this level of employment here. Such a concession would put the hotel industry on an even keel. The hotel industry is the only export industry which is penalised. Every other export industry is given enormous cash incentives. In relation to the export content of the hotel industry about 50 per cent of bed nights last year were accounted for by foreign visitors. In 1981 out of the seven million bed nights here, VAT was only attached to two million of them. That puts the hotel industry at a disadvantage and it is discriminatory.

[2580]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  That is one of the reasons for the change in the registration limits.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  The limits are applied to various operators providing the bed nights. Is the Minister contemplating changing that as well?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  We have done the bit for them.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  A lot of people in the other type of operations feel they are being discriminated against and feel that fair play should apply across the board. They want to know why their two million bed nights attract even the 18 per cent when so many have no VAT rating at all. I am not asking the Minister to apply VAT rating to those not affected. I am asking the Minister to lower the 18 per cent VAT rate to the average European level of about 9 per cent. The VAT aspect is a very significant element in relation to the hotel and tourist industries. This industry has been killed off by prices which the foreign visitor cannot afford. The VAT rate will have to be reduced to give a better deal. I hope the Minister will give this suggestion his favourable consideration.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  Unfortunately there is a time limit on us. I would like it confirmed that we are taking sections up to section 78.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  We are dealing with sections 66 to 78.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  These will conclude at 8.30 p.m.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  On a point of order, we are only dealing with section 70 now.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Yes.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  Yes, but I just wanted to confirm that we are taking the others too, in case they may get through the net.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  They will not go through the net, Deputy.

[2581](Interruptions.)

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  Yes, but section 78 will be finished at 8.30. p.m. too.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  If one wants to get to section 71 one must deal with section 70 first.

Mr. Flynn: Information on Pádraig Flynn  Zoom on Pádraig Flynn  I know that, but whether we deal with it or not the vote will be taken at 8.30. p.m.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  This situation has existed for years but, the rules being as they are, many of us cannot discuss certain sections one by one.

I do not wish to antagonise the Minister because I am a business man too as well as being a public representative. However, this proposal is anti-investment. I admit that the Minister has a difficult financial problem. I recall that when myself and Deputy Flynn moved a motion in regard to VAT on hotels the Minister explained that he could not accede to our request but I was glad to note that eventually the Minister came around to our way of thinking. We must create an incentive to invest and expand. I regret that some people depend on the State to do everything. The State is not in a position to give the type of investment we need to boost employment because the resources are not available to it.

I am very much in favour of small industries. These industries with under 30 employees have served the country well and should be made attractive. Some political commentators and also some political parties think that the State can do everything, that the State is a vehicle to take on the major task of employment. It goes part of the way, but was never asked to take on that complete role. We depend on private investment, which should be encouraged. There seems to be a swing away, whether intentional or otherwise from encouraging wealthy people to invest their money. I would go into more detail on the subject, but time is against me and I want to allow the Minister to speak. I look forward to hearing [2582] his views on amendment No. 73. Unfortunately, this matter must be concluded by 8.30 p.m.

Mr. P. Gallagher: Information on Pat the Cope Gallagher  Zoom on Pat the Cope Gallagher  I ask the Minister to consider the amendment in the name of Deputy O'Kennedy. Would he consider especially Border counties such as Donegal which have suffered as a result of these increases? Because of these latest increases the returns to the Exchequer has been reduced and that is a fact. The Minister's officials will bear me out on that. As the Minister well knows from his visits to Donegal, small businesses have closed down, particularly public houses. One is fortunate to get a look into a bar door now and have a look at a pint, let alone be able to drink one. Business, not alone along the Border but throughout that county, is suffering. I am speaking not only on behalf of the people of Donegal, but of all the Border counties. Even at this late stage the Minister should consider this reasonable amendment, which could increase revenue to the Exchequer rather than reduce it.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  I want to make one point and will be very brief. There are tax rates of 23 per cent and 35 per cent and quite often many goods could go into one rate or the other but because of the state of the revenue they automatically find themselves in the 35 per cent category. In a future budget the Minister might consider the feasibility, particularly with regard to items connected with tourism, of introducing a rate which would fall between these two percentages. It may be possible to bring selected items into such an interim rate. The argument may be put forward that this would be difficult from an administration point of view but, after all, we have already a zero, a 5 per cent, a 23 per cent and a 35 per cent rate.

I am glad that candles have been derated from 5 per cent down to zero, which will help us to see the light more clearly. There have been, can be and should be adjustments, particularly in connection with tourism. The recent adjustments have been a great boost to the tourist trade with regard to hotels and [2583] the Minister might be able to consider sympathetically Deputy Gallagher's plea with regard to the Border counties. It might mean too great a loss to the Exchequer to reduce the 35 per cent rate back to 23 per cent but an interim percentage might be of benefit, without much loss to the Exchequer.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I shall be brief on the points which I am making. Predictably, I must begin with Deputy O'Kennedy's question on the revenue position. The proposal made in this amendment would reduce revenue this year by a gross figure of approximately £100 million. Deputy O'Kennedy referred to my reply to a recent question, but that concerned a gross estimate. He has said that the net cost would not be so great. Taken in isolation that probably would be true and there would be some resultant buoyancy as the Deputy says. On the other hand, in order to replace that revenue it would be necessary either to raise taxation elsewhere or to reduce expenditure. In either of those cases there would be a negative buoyancy factor in the opposite direction. It does not add a great deal to the argument in the present circumstances to make great play of the difference between the gross and the net position.

I appreciate the difficulties met with in Border areas regarding trading. I must observe that there are two ways of dealing with that problem: one is to reduce our tax rates so that they are comparable with those in Northern Ireland.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  And have them increase their tax — there is no chance of that.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Of course, we have no control over that.

Mr. P. Gallagher: Information on Pat the Cope Gallagher  Zoom on Pat the Cope Gallagher  That is the responsibility of the British Government.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Unfortunately, neither of those seems to be a realistic prospect. We must therefore seek other ways of dealing with that problem. Deputy Flynn has referred to a number of suggestions in that connection. The amendment put forward, [2584] of itself, would not solve our problem, nor do I think that it is being represented in that light.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  It would not solve the problem, but it would be a factor.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  It would be a help.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  There has been quite a deal of discussion on the incidence of our VAT rates. If we were to take the full theoretical VAT base of all consumer goods and services and if we spread the burden over the whole volume of consumer expenditure on goods and services we would end up with an effective VAT rate of about 14 per cent. In those terms, when compared with the rates which apply in other member states of the EEC, we are not so high up the scale as one might think.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Minister is, of course, including the zero rate in this.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I am speaking about all the VAT rates. Deputy Mitchell mentioned the gap between the 23 per cent and 35 per cent rate and a possible interim rate. There is a wider problem there. We could look at rationalising categories of goods without necessarily creating extra rates. What I have said on this and other measures which we have previously discussed will have to suffice, because of the time limitation.

Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  Just before the question is put the Minister might have a word to say on amendment No. 73.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Very briefly, Deputy.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Amendments Nos. 67, 73 and the other amendments in this part have to deal with other aspects of the VAT system, in particular as it affects the flat rate return for farmers. The point I wish to make is that I am making an interim arrangement for the refund of VAT on farm buildings. This is something which has been creating some difficulty.

[2585]Mr. Connolly: Information on Gerard C. Connolly  Zoom on Gerard C. Connolly  Is that compensation in full on farm buildings?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It is to compensate for what is not now possible.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  We are making some progress.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  As it is now 8.30 p.m. I must in accordance with the order made by the Dáil on 24 May, [2586] as amended by the order made today, put the following question: “That the amendments set down by the Minister for Finance to Part III of the Bill, and not disposed of, are hereby made to the Bill; and in respect of the sections undisposed of in that Part, other than sections 71 and 72, that the sections or, as appropriate, the sections, as amended, are hereby agreed to”.

Question put.

Allen, Bernard.
Barnes, Monica.
Barrett, Seán.
Barry, Myra.
Barry, Peter.
Begley, Michael.
Bermingham, Joe.
Birmingham, George Martin.
Boland, John.
Bruton, John.
Bruton, Richard.
Burke, Liam.
Carey, Donal.
Collins, Edward.
Conlon, John F.
Coogan, Fintan.
Cooney, Patrick Mark.
Cosgrave, Liam T.
Cosgrave, Michael Joe.
Coveney, Hugh.
Creed, Donal.
Crowley, Frank.
D'Arcy, Michael.
Desmond, Eileen.
Donnellan, John.
Dowling, Dick.
Doyle, Avril.
Dukes, Alan.
Durkan, Bernard J.
Enright, Thomas W.
Farrelly, John V.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Oliver J.
Griffin, Brendan.
Harte, Patrick D.
Hegarty, Paddy.
Hussey, Gemma.
Kavanagh, Liam.
Kelly, John.
Kenny, Enda.
McCartin, Joe.
McGahon, Brendan.
McGinley, Dinny.
McLoughlin, Frank.
Manning, Maurice.
Mitchell, Gay.
Mitchell, Jim.
Molony, David.
Nealon, Ted.
Noonan, Michael.
(Limerick East).
O'Brien, Fergus.
O'Brien, Willie.
O'Donnell, Tom.
O'Sullivan, Toddy.
O'Toole, Paddy.
Owen, Nora.
Pattison, Séamus.
Prendergast, Frank.
Quinn, Ruairí.
Ryan, John.
Shatter, Alan.
Sheehan, Patrick Joseph.
Skelly, Liam.
Spring, Dick.
Taylor, Mervyn.
Taylor-Quinn, Madeline.
Timmins, Godfrey.
Treacy, Seán.
Yates, Ivan.

Ahern, Bertie.
Ahern, Michael.
Aylward, Liam.
Barrett, Michael. [2587]Brennan, Séamus.
Browne, John.
Burke, Raphael P.
Byrne, Hugh.
Byrne, Seán.
Calleary, Seán.
Colley, George.
Conaghan, Hugh.
Connolly, Ger.
Coughlan, Cathal Seán.
Cowen, Bernard.
Daly, Brendan.
De Rossa, Proinsias.
Doherty, Seán.
Fahey, Francis.
Fahey, Jackie.
Faulkner, Pádraig.
Fitzgerald, Liam Joseph.
Fitzsimons, Jim.
Flynn, Pádraig.
Foley, Denis.
Gallagher, Denis.
Gallagher, Pat Cope.
Geoghegan-Quinn, Máire.
Harney, Mary.
Hyland, Liam.
Kirk, Séamus.
Lenihan, Brian.
Barrett, Sylvester.
Brady, Vincent.
Brennan, Mattie.
Brennan, Paudge. [2588]Leonard, Jimmy.
Leyden, Terry.
Lyons, Denis.
McCarthy, Seán.
McCreevy, Charlie.
McEllistrim, Tom.
Mac Giolla, Tomás.
MacSharry, Ray.
Molloy, Robert.
Morley, P.J.
Moynihan, Donal.
Nolan, M.J.
Noonan, Michael J. (Limerick West)
O'Dea, William.
O'Keeffe, Jim.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond J.
Ormonde, Donal.
O'Rourke, Mary.
Power, Paddy.
Treacy, Noel.
Tunney, Jim.
Walsh, Joe.
Walsh, Seán.
Wilson, John P.
Woods, Michael.

Tellers: Tá, Deputies Barrett (Dún Laoghaire) and Taylor; Níl, Deputies V. Brady and Fitzsimons.

Question declared carried.

Question proposed: “That section 79 stand part of the Bill.”

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  A Cheann Comhairle, could I suggest that since we now have less than 15 minutes to debate the sections dealing with stamp duties, perhaps we could address ourselves to the elements involved in sections 79, 80, 81 and 82.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Is that agreeable to the Minister?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Yes.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I want to address myself to two of them. In relation to the levy on the banks, this issue arose with the Minister and his predecessors. It was referred by me to the Commission on Taxation as a matter for appropriate consideration. As yet they have not yet made a recommendation on it.

As a consequence of the proposals which the Minister has been making, notably the proposals he has been making in section 17 in respect of deposits from people resident outside the State, the information is that very considerable sums have already been withdrawn from the banks. The indications are that the level of inquiries in the external branches of the Irish banks in the United States, in Britain and elsewhere — countries with whom we have dual taxation agreements and where our Revenue Commissioners have arrangements with their Revenue Commissioners — is causing considerable concern to the banking institutions. Whatever view one takes on an ideological basis of the banking institutions, it is quite clear that the last thing we need is to see a run on our banks. The last thing the Minister needs from the point of view of revenue is to see a run on our banks, because then there would be precious little on which he could make his levy in [2589] accordance with his proposals in section 79.

As I understand it, at the moment roughly about £1.4 billion is on deposit in our banks from people who are domiciled outside the country. People like these who are making a very substantial contribution to the deposit base in our banks — which I am sure helps to achieve the level of profitability on which the Minister proposes under this section to impose a levy — will be discouraged, to say the least of it, from leaving their deposits in a banking system which requires them to swear an affidavit that in fact they have accounts——

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Is this on the section?

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Oh, yes, it is definitely. If the Minister is going to deal with the banks by way of levy, if he wants to get something from them by way of levy, I presume he will be very anxious to ensure that their deposits and, consequently their profits on which he proposes to impose the levy, will at least be capable of sustaining a levy. It is for that reason that we are very strongly opposed and have moved to delete the extraordinary proposal the Minister introduced to require non-residents, or citizens outside the country to swear affidavits that they have accounts in banks outside their own jurisdiction. Obviously it is a matter of concern for them but it is even more important as far as we are concerned for the banks and their role and that of other financial institutions in this area. I believe the Minister will have learned from all sources since he took this decision that it constitutes a very damaging blow to the liquid position of our banking institutions.

If the Minister thinks people will readily swear affidavits which will enable them to be identified by the Revenue Commissioners here, which from their point of view, rightly or wrongly — and I would not suggest for a moment that our Revenue Commissioners would disclose that fact to the Revenue Commissioners, say, in Britain, a country with which we have a dual taxation agreement, [2590] or, similarly, in the United States — he is under a gross misapprehension. I would not suggest for a moment that they would but, whether or not they would, in the mind of the person depositing in our banking system the reality is that he will be apprehensive. If he is apprehensive the last thing he wants to do, if he is depositing what may be even hot money from his own jurisdiction in our banking system, is to run any risk whatever of having the existence of those moneys and accounts disclosed to the Revenue Commissioners or the equivalent, inland revenue or otherwise, in another country.

In that sense section 79 becomes only a detail if the Minister is determined to proceed with that proposal, which we strongly advise him not to do and have actually proposed be deleted from this Bill. Otherwise we will not have any profits on which to impose the levies and section 79, about which we are now concerned, will be of academic interest only.

Whatever view one takes those £1.4 billion or thereabouts now available to our banking institutions make a considerable contribution to our economic development and are of vital importance in maintaining the liquidity of the banks and even the strength of our currency. In this instance I hope the Minister will see that in his zeal he has moved too quickly. In the light of what he hopes to achieve in section 79 — which we could support — I hope he will reconsider what he is proposing in section 17 because, if he does not, he will have no profits on which to impose the levy under section 79, when a very important element of our economic development will have been undermined.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  Is it in order to ask a question on section 80, or are we confined to section 79?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  We are taking sections Nos. 79, 80, 81 and 82 together.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  I should like to ask a question on section 80: with regard to pass cards, or bank link cards — whatever is their appropriate name; I know they [2591] are described under different trade names — what is the position with regard to stamp duty on withdrawals made by this method and are they covered under the term “charge cards”? Perhaps the Minister would explain when replying.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I forgot to mention that we are opposing section 81. That is the section which proposes to delete the exemption from stamp duty on consideration of marriage. We feel this is a very important element in the encouragement to transfer farms, particularly in rural areas, from older farmers to their sons on consideration of marriage. There are good reasons why this particular exemption has been included in the tax code. We shall not have much time to argue it now but, for all the good reasons it is there — namely as a special inducement for transfers of farms in consideration of marriage, particularly in rural areas — the Minister should very seriously reconsider that position. I do not know how much money he expects to get as a consequence of including section 81 but it would want to be a very considerable sum before introducing a section which will have a very undesirable socio-economic impact.

Mr. J. Walsh: Information on Joe Walsh  Zoom on Joe Walsh  I might make a few comments on that section. I should like to express my disappointment at the provision in this Bill — I think £250,000 is the estimated revenue yield therefrom — which will do a considerable amount of damage to the transfer of farms by older farmers to members of their families.

I might refer the Minister to the Inter-Departmental Committee on Land Structure Reform, Final Report of May 1978, paragraph 3.5 under the heading “Farm Inheritance and Succession” which says:

The late transfer of the family holding has long been regarded as a problem in Irish farming. The ages of farmers at the stage of transfer and succession vary with farm size, being lower on the bigger farms. Over 23 per cent of the active agricultural population [2592] is over 65 years, compared with a 4 per cent to 9 per cent range in Continental countries....

This measure will compound that situation further. Everything should be done to encourage the transfer of farms to younger farmers. Indeed I might say that Fianna Fáil, in section 93 of the Finance Act, 1982, introduced a provision which allowed exemption from stamp duty where transfers were made to young farmers under 35 years of age who had acquired farm training qualifications. That was a step in the right direction. I would appeal to the Minister to reconsider this proposal for the sake of the estimated £250,000 involved. Sufficient damage has been done already to the morale of the farming community by the suspension of the farm modernisation scheme, the introduction of the other taxation measures and so on.

Mr. O'Dea: Information on Willie O'Dea  Zoom on Willie O'Dea  Deputies J. Walsh and O'Kennedy have pointed out the desirability of farmers transferring their land to their sons rather than holding on to it until they are at an advanced age or willing it to their sons.

I would remind the Minister that the scheme of gift and inheritance tax introduced by a previous Coalition Government in 1976 was designed to encourage just that by imposing a lower levy of transfer tax on transfers inter vivos rather than on transfers on death. I think it is 25 per cent lower. Therefore, this section runs contrary to the entire scheme in that respect. I agree with a former Minister for Finance, Deputy Richie Ryan, in his proposal, incorporated in legislation, to encourage such transfers at an earlier stage. I would appeal to the Minister to act in a way which is consistent with what a previous Fine Gael Minister has done.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  On this point of transfers inter vivos and transfers on marriage, I would think that what was done in the Finance Act of last year — indeed initiated by the previous Coalition Government at that stage — is something that will have a far more beneficial effect on transfers than the measure about which [2593] we are talking here. A wide range of relatives qualify already for lower rates of stamp duty on these transfers and, in most cases, consideration of marriage will qualify here anyway. Transfers on marriage, up to now, enjoyed a privileged position, as compared with the situation of couples who were buying property when they got married.

That element is one to which we should pay attention. I regret that we have had two or three people saying much the same thing on the other side. I would oppose the amendment Deputy O'Kennedy is putting forward. I reject in very large part the substance of what he has said about the provisions of section 17, which I have already said I intend to amend. I take it from what he is saying that he supports the provision in relation to bank rate.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  As it is 9 p.m. I must, in accordance with the order made by the Dáil on 24 May, as amended by the order made today, put the following question: “That the sections undisposed of in Part IV are hereby agreed to”.

Question put and declared carried.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Amendments Nos. 78 and 80 are cognate and may be taken together, by agreement.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I move amendment No. 78:

In page 65, subsection (2) (a), lines 13 and 14, to delete “return or statement” and substitute “return, statement or accounts”.

Most of the amendments to this part of the Bill are drafting amendments which are designed to remove any doubts as to the meaning of certain phrases used in the section. Amendments Nos. 78 and 80 are designed to ensure that the knowing or negligent furnishing to an inspector of taxes of incorrect accounts of a business or profession or assisting in furnishing such incorrect accounts would be an offence [2594] under this section. I am not happy that the existing phrase as the section is drafted, that is “return or statement”, would cover accounts also and it is for that reason that these two amendments have been put down, in order to make it clear what the intention and the scope of the section are.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I take note of what the Minister has said.

Amendment agreed to.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I move amendment No. 79:

In page 65, subsection (2) (b), line 17, to delete “negligently”.

It is part of the code already in relation to income tax that a person negligently furnishing or failing to furnish accounts or information is liable to penalty. We are concerned that an accountant would not be culpable under this section if he furnished accounts or made a return on behalf of a client based on incorrect information supplied to him. The purpose of the amendment is to secure that. Subsection (2) (d) would clearly apply to an accountant but we have not put down an amendment dealing with that subsection. I do not think the Minister would wish that bona fide accountants would be caught under the section.

We are concerned about the extension into a new area of the principle of delegated criminality. An officer of a company may deliberately or otherwise present false accounts. The company directors could under this section be held to be liable personally or as a corporation for something of which they individually or collectively were not aware. When drafting legislation of this kind there are two tendencies. First one looks to see where there are similar kinds of legislation and we normally look across the water and copy similar British legislation, especially if there is a degree of urgency.

The Minister was engaged recently in consultations with the trade union movement. Such consultations with any group, no matter how representative, between the budget and the Finance Bill are [2595] unprecedented. Never hitherto has any Minister worked so closely with any group in the course of preparation of his Bill and perhaps that explains why the Minister put down so many amendments after the Bill was presented. After reconsideration of some of the things to which we agreed in the course of these consultations the Minister more prudently decided to qualify in some way or other. For that reason on this particular amendment, dealing with the deletion of the word “negligently” we are anxious to make it quite clear — as it is quite clear to the Minister — that where anyone has been found guilty under this or any previous legislation of defrauding the Revenue, an offence under the appropriate legislation, our approach in this party is far from seeming in any way to condone that kind of activity. Negligence in law has been distinguished as a tort, as the Minister may well know, from criminal activity and if we have in a sense moved into an area in this Bill where one can be liable to negligence we are anxious to ensure it cannot at least happen on the basis of something you had no knowledge of in the case of a company or something you had no knowledge of in the case of a company director. I believe the Minister would be as anxious to ensure that would not happen; and if the Minister thinks some formula other than our amendment would be more appropriate to achieve what is necessary, we will be quite happy to withdraw our amendment and listen to whatever observations he may have to make in that context.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The first thing I should point out about this section is that it does not create any new offence. Every act or omission which can be prosecuted under this section already attracts a penalty under existing legislation and offences committed up to the date of the passing of the Act will continue to be subject to existing penalties and after that they will be subject to proceedings for penalties described in the section. It does not create any new offences.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I did not say it did.

[2596]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I am just making the point. Subsection (2), which is the one to which amendment No. 79 refers, sets out a number of cases where offences will be deemed to be or held to be committed under the section. I would just draw to the Deputy's attention the fact that in paragraphs (a), (b) and (d) the word “knowingly” appears before “negligently” also.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  “Knowingly or negligently”. That is not the same thing.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  (b) “knowingly” and (d) “knowingly or negligently”.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  No. Read the Bill. “Knowingly or negligently”— line 2 of (b).

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  As the Deputy is rather anxious to get to the point, I want to get to the point. In that connection on paragraph (e) of that subsection I propose on Report Stage to introduce an amendment to add the word “knowingly” at the beginning of that. Now the amendment proposes to confine the offences provided for in subsection 2 (b) to one of knowingly aiding and abetting, et cetera, or inducing another “knowingly” to make or deliver an incorrect return, statement or account. The genesis of the section consists in the knowingly or negligent delivery of such documents.

I make the point that negligence in the context of a Revenue offence should not be talked of as being no more than carelessness or oversight and the question of what constitutes neglect for tax purposes is something that was discussed here during the debate on the Finance Bill, 1971. On that occasion, in response to an amendment moved by Deputy O'Higgins, the then Minister, Deputy Colley, pointed out that the definition of neglect was not what the normal lay man would think of in terms of neglect. He pointed out that where a taxpayer appeals against an assessment on the grounds that he has not been guilty of neglect in the case of an incorrect return the inspector would have to show this [2597] was not the result of an innocent mistake but rather that the taxpayer was guilty of negligence in making the return. He further ventured the opinion that it might not be taken that the appeal commissioners or the Circuit Court, to whom the taxpayer had recourse, would not be likely satisfied on a point of this kind. Therefore, the notion of negligence in this connection is not a new one and, in fact, has been considered before in this House.

I should also like to make a point that the inclusion of the word “negligently” in this part of the section is something which should help to ensure that high standards are maintained by those who are involved in making, assisting or advising in the making of returns. For those reasons I prefer to maintain the drafting as it stands because it will point more clearly to the need for proper attention to be paid to the preparation and making of returns both in the interests of the taxpayer, whether it be a person or a company, and in the interests of the officials and in the interests of the effectiveness of the collection system.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Far from being reassuring what the Minister has just said has the very opposite effect particularly when he says this will be an encouragement, if not a threat, to people who are engaged in their professional capacity — they could be anything from solicitors to accountants to anybody else — an inducement or encouragement to them to ensure they do not act negligently in getting all the relevant facts from their client. That may be, but that is the very last thing that should be introduced into any criminal code. If by chance one has an unworthy client the onus may actually rest on one, be he an accountant or a solicitor, to ensure that he is furnished with every last detail. That is moving into a most dangerous minefield. It is one thing to talk about high standards being encouraged but let us recognise the fact that professionally qualified people have by definition their own professional etiquette and, if they have not, they have their own disciplinary authority. If by [2598] chance someone goes beyond the scope of their own disciplinary authority then that someone can be prosecuted by the courts for criminal activity. Here we have the situation where someone can find himself actually guilty of a criminal offence and liable to very considerable penalties — five years or £10,000 or both. That is moving into a most explosive minefield and the reasons given by the Minister are quite inadequate. This is a very complex Bill.

In talking about the Bill to the press the very first day the Minister described the Bill as a Bill with revolutionary changes. Those are the Minister's very words. We can now see that it is indeed revolutionary. Perhaps he did not have an opportunity of examining all the aspects of it or even of consulting the legal advisers from the Attorney General's office and others. While I and others will obviously respect the reasons given by any Minister here, the fact is that what is said in this House would not be regarded in the law courts as being the binding interpretation of the law. They read the Act as it is drafted. They apply the judgment on the basis of the interpretation of the terms as they see it. We have to ensure that when it leaves our hands here there can be no doubt. They may consider, but very seldom be influenced by, an assurance from any Minister, however well intentioned that assurance may be and however well informed it may be. If the Minister will agree to correct this we will not insist on our particular deletion in that line but in every case where “negligently” occurs it occurs on this basis “knowingly or negligently”.

Section 83 (2) reads:

(a) knowingly or negligently delivers any incorrect return or statement or knowingly or negligently furnishes any incorrect information in connection with any tax.

(b) knowingly aids, abets, assists, incites or induces another person to make or deliver knowingly or negligently any incorrect return or statement in connection with any tax ...

(d) knowingly or negligently issues or produces any incorrect invoice, [2599] receipt, instrument or other document in connection with any tax.

The words “or other document” covers a multitude. One would not have to be a lawyer, much less a Supreme Court judge to see that ironically one of those who was making the point that the Minister referred to of concern in 1971 is now in the very position of being Chief Justice. Nothing the Minister has said reassures me; it does quite the opposite.

The Minister mentioned the words “innocent mistake”. He is moving into totally different territory there. The law is quite clear — and this is even in tort. Leaving aside the criminal imputations, it distinguishes very clearly between “mistake” and “negligence”. The two are in no way related. They are not of the same order at all. There is hardly any distinction in the law as clear as that between mistake, even deliberate mistake, and negligence. For the Minister to talk of “innocent mistake” in the same context as “negligence” is demonstrating that perhaps somebody did not have adequate time to advise him or he did not have adequate time to consider the advice he received. Before we move into this territory we believe that we owe it to the citizens out there, particularly those who have professional competence and obligations, to ensure that they will not be caught up in criminal actions which the judges will have to interpret on the basis of what we put through here.

Mr. Prendergast: Information on Frank Prendergast  Zoom on Frank Prendergast  On a point of information what happens to amendment No. 84 standing in the name of Deputy Bell? Deputy Bell has gone home ill and will not be in a position to move that. Does that amendment fall or can it be raised at a later stage?

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  The Deputy can move it on his behalf.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  We can deal with it when we come to it. The question is being put at 10.30 tonight to dispose of this group of sections and amendments.

[2600]Mr. Prendergast: Information on Frank Prendergast  Zoom on Frank Prendergast  I am anxious that this amendment should not fall by default.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  If it is not reached by 10.30 it will not be put. Only amendments in the name of the Minister will be put at 10.30. If that amendment is reached before 10.30 we will consider what the position is.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  I should like to say a few words on this section.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  We are dealing with amendment No. 79.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  It is obvious from the number of amendments to the section that they will not all be moved. Does that mean the sections cannot be debated?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The only amendment before the House now is amendment No. 79.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  The Minister and Deputy O'Kennedy have in effect debated the section up to now. I will begin and I am sure if I go too far wrong the Chair will pull me back. This amendment which was moved by Deputy O'Kennedy properly seeks to delete the word “negligently” not just in that line but everywhere else it appears in this section. All the other cognate amendments should be discussed together and I take it that they are being discussed together.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Amendment No. 79 is the only amendment before the House but I am sure that Deputy O'Malley will be able to make his speech and say what he wants to say.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  In support of what Deputy O'Malley has said, amendment No. 85 and others are in exactly the same territory.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Would Deputy O'Kennedy like to tell me what amendments he would like to have discussed together?

[2601]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I would be quite pleased to see all the amendments in my name to this section taken together.

Mr. Prendergast: Information on Frank Prendergast  Zoom on Frank Prendergast  Up to and including what?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  All the amendments, in the name of Deputy O'Kennedy, to section 83.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  All the amendments in Deputy O'Kennedy's name deal with the question of negligence in the making of returns to the Revenue Commissioners. It seems to me to be perfectly obvious that what Deputy O'Kennedy says in relation to accountants, for example, is correct and also I would think in relation to solicitors. It certainly is in relation to accountants.

If you look at subsection (5), line 12, there is reference to “secretary or other officer of a body corporate”. Under the Companies Act, 1963, an auditor is an officer of a body corporate. Therefore, an auditor of a company who is acting in his professional capacity comes within subsection (5) and is liable, if he is negligent, to the penalties set out in this section, including five years imprisonment, for negligence.

I practised a profession for a number of years and I was aware, and availed of the opportunity from the very start, of the necessity to insure myself against negligence, because in the practice of any profession, whether medicine, law, accountancy or anything else, the best practitioner in the world is liable to be found negligent from time to time because of sheer pressure of work. Here we have written into our law for the first time — Deputy O'Kennedy's amendment is an effort to avoid it — a concept that when somebody is not liable to civil damages he is liable in criminal law and may get five years imprisonment.

I will explain for the Minister what negligence is. Negligence is a civil tort; it is not a crime. Therefore it is, on the civil side of the law, only a breach which gives rise to damages. If a motor car is driven out of a narrow laneway on to a main [2602] road and crashes into another car and injures somebody in the car on the main road, the driver of the car that came out of the narrow laneway is negligent. He may or may not be guilty of an offence under the Road Traffic Act, but as far as the driver of the car on the main road is concerned, he has suffered a civil wrong and he is entitled to damages, and damages only.

Here we have a whole new concept brought into the law whereby accountants, if they make a mistake, although they can insure themselves civilly, will get up to five years in jail as a result of this section, if it is passed without Deputy O'Kennedy's amendment. In my view that is monstrous and anyone who understands the situation knows it is monstrous. It should not and could not be tolerated.

Look at the situation we are in here tonight. We have passed in the House today far-reaching, revolutionary changes in our tax law and we have not ever discussed them. I spent a couple of days preparing remarks I intended to make on advance corporation tax, the effect of which will be quite appalling on our economy for the sake of a few million pounds. I found that on the 20 sections or so that imposed that tax neither I nor any other Member of the House could say a word. Here we are changing the whole fundamentals of our criminal law in relation to professional people and officers of companies and we have an hour left in which to talk about it.

If the reality of what this section means were understood, every Member of the House would want to talk about it. Why we have to put up with the farce that this House sits week after week talking about nonsense and here we have the most important legislative measure of the year and we have been given four days in which to discuss its details, and no other opportunity. We are an irrelevant body when we make these rules for ourselves and decide to obey them, because this Bill, the penal sanctions of which are contained in this section, is more important than the sum total of every other piece of legislation that has been or will be brought into this House this year.

[2603] This Bill has a profound effect on our economy and on innumerable people in it, but we get only four days in which to talk about it. Literally whole drafts of it, loads of it, 20 sections at a time, introducing totally new concepts of taxation, go through without any discussion. This House is not in a position to amend this legislation. In so far as it will be amended at all it is being amended behind closed doors by business and other pressure groups. I think that is deplorable. The amendments should come from the free flow of debate in this House, if this House is to mean anything, but the amendments are not flowing from that. They are flowing from people scurrying into offices in Merrion Street making bargains with civil servants behind closed doors. That is not democracy. That is what is making this House irrelevant.

We have been told by the Minister in his intervention that this section does not create any new offence. The Minister should read his section, with all due respect to him, because subsection (2) provided that a person, without prejudice to any other penalty to which he may be liable — in other words, without prejudice to any other offence he has committed — shall be guilty of an offence under this section, after the passing of this Act. In other words, if he does it today he is not guilty, but if this Act is passed next week or next month he will be guilty.

Therefore, it is a new offence. There are a whole series of new offences, a long all-embracing list of them, all new offences, without prejudice to existing penalties to which he is liable. It is a different way of bringing in a new criminal offence to our law because it does not specify exactly what it is — it refers to any infringement at all. You are liable if you neglect to pay something. They all bear the same penalty. If you are tried on indictment you will get five years and a fine of £10,000 if you are a day late with a VAT return.

The House will think of the equity with which we are faced here if we rush this thing through now. If I am a small shopkeeper and I am one day late with my VAT returns and I owe the VAT people [2604] £50, I commit an offence under subsection (2) and I am liable to prosecution under subsection (3) and I may get five years for it. As somebody pointed out to me recently in this connection, you can get five years for being late by one day in producing your returns to the inspector of taxes, but if you conspire with four others, all shopkeepers, to kick the inspector of taxes to death, you will get the Probation Act.

What sense of proportion have we in the country and in the House with this section? Even at this stage the House should say we have enough, that we will have to look at these provisions and that we cannot and will not deprive ourselves and those who elected us of the right to examine legislation and to amend it where it is seen to be necessary, appropriate, or in the public interest. This House has given away the right to examine and amend legislation to anonymous men in Merrion Street to whom businessmen and other pressure groups are surreptitously running in order to get their amendments accepted.

This House can never debate those amendments. That does not do any service to democracy and in particular to our economy which will be so profoundly affected by what the Minister himself has called “revolutionary provisions”. Because they are revolutionary they need a lot more time than might otherwise be normal to debate them. It was frightening to hear the Minister say — I am sure it will be frightening to professional institutions — that the use of the word “negligently” here means to enforce high standards in the making of returns and in the carrying out of professional work. That is a very ominous sentiment. In other words, if a person does not do his work satisfactorily as an accountant — and not necessarily to his client's satisfaction but to the satisfaction of the Revenue Commissioners — he has a sanction hanging over him of five years in jail. Is this going to be extended to doctors? If a patient dies through a mistake is it no longer just a question of claiming damages? Are high standards in medicine going to be enforced by five years in jail?

This section and the parts of it we are [2605] trying to get deleted are much more important than the efforts of the Minister, the Department of Finance or the Government to put them across as something almost unimportant would make them appear. If ever I read a misleading explanatory memorandum it is the one which has been issued with this Bill. One would think section 83 dealt with a minor matter because it says more stringent penalties will now be imposed for tax offences where there were only monetary sanctions before. That is misleading, but I hope it was not intentional.

For too long we have seen the most important Bill of the year put on the Statute Book without the agreement of this House other than in the most formal fashion. It was always wrong but it was never as wrong as it is this year, because this year is fundamentally different. Look at the length of the amendments. This is the first book of amendments which came out Tuesday morning. We now have two or three sheets of additional amendments and amendments to the additional amendments. The first volume was 33 pages long, longer than the majority of Bills which go through this House, and half the length of the Bill. We got these amendments on Tuesday morning and the debate started at 3.30 p.m. the same day, and we have been getting supplementary amendments since. There were originally 177 amendments and there are now about 190, and we may get more tomorrow.

I am objecting, this party are objecting, and I suggest everybody in this House should be objecting to the enactment of enormous new offences with enormous new penalties without any proper examination. The unfortunate Minister, who I am sure is an honourable man, stood up in all innocence tonight and said this section created no new offences. It creates more criminal offences than any section I have seen in my 15 years in this House. It is a measure of the innocence and naivete of the man that he believed that. It is not his fault, because he is not experienced in this area. It is monstrous that this is the case.

It is particularly so because we have two sets of taxation which are new to our [2606] laws: one has been passed into law without being examined and another will come after this. That is the one to which there are the most serious objections, not on ideological or economic grounds but on the grounds of the most obvious equity. Now somebody can own a house with a short lease and an enormous mortgage but have no equity of redemption. In other words, he has no real property. He has nothing to own because the shortness of the lease and the existence of a huge mortgage mean that what otherwise would be a redemption to him is valueless. He has to make returns to the Revenue Commissioners in which he will have to return that house at what would have been the value if he held it unencumbered fee simple without any mortgage. If he does not make his returns spot on to the satisfaction of the inspector of taxes, he can get up to five years in jail. That may well happen because the climate has been created over the last six or 12 months to have everybody who is the subject of this kind of criticism branded as a criminal or a leech on society — businessmen, employers, farmers, manufacturers, professional men, anyone who creates wealth. This popular public feeling that has been generated in recent times may influence the thinking in our courts and they may come to the conclusion that somebody who is deficient in one of these extraordinary new taxes and makes a mistake in relation to it is worthy of a jail sentence.

I have the gravest doubts about this and I ask the Minister in all seriousness to realise that there is not just much more to this section than he believes but that there is infinitely more to it and that it has enormous consequences — legal, social and economic. It is a section in a Bill called the Finance Bill, 1983, but for many people who matter to this country and who this country needs it might be described as the Emigration Bill, 1983, because that may be its effect on some of the most valuable people in this country.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I appreciate the commitment of Deputy O'Malley to those people in our community — and there are many — whose intention and effort is to create [2607] wealth, to build new wealth and to create employment. We are concerned about all these people who deserve the consideration and assistance the machinery of State can give them. But to make the point as Deputy O'Malley has done starts off from the assumption that all those people, in one way or another, will come into a condition in which they would be under threat from the provisions of this Bill. That is simply not the case. The majority of these people — indeed, the majority of our taxpayers — act in a proper and conscientious way and fulfil their obligations. In return they get whatever services the State provides to support or foster the activities they are involved in.

Deputy O'Malley spoke about the effects of this Bill on our economy, and I am glad he did. There are far wider considerations about which we are speaking in this section. I wish that more of our discussion had had more direct relevance to the condition of our economy than we have seen so far in this debate. There are fundamental problems with which we must deal and fundamental objectives which we must attain in relation to our economy for the sake of our people that have not been properly dealt with here. Perhaps it is in the nature of the Bill which we are discussing that we have to be restricted to the relevant sections. Perhaps we should have had that debate earlier and, having fixed our objectives on the budget itself, we could then give those objectives legislative expression, where that is needed, in framing our Finance Bill.

Deputy O'Malley has made a very vigorous attack on the sections under discussion and on the way in which this Bill was discussed. We have endeavoured to carry out this discussion ensuring a proper allocation of time between the different sections of the Bill. It may be that we could have done with more time overall to discuss the Bill.

Mr. S. Brennan: Information on Seamus Brennan  Zoom on Seamus Brennan  Two more weeks, Minister.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Within the amount of time available we have made better provisions [2608] this year for the discussion of the Bill. Deputy O'Malley commented on the number of amendments and the time in which the first volume of amendments, as he called it, was made available. I am bound to point out that a considerable number of those amendments came from the Deputy's own party.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Such as those that we are now discussing and I wish the Minister would get to the point of those amendments. He is using time.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I am not for a moment objecting to those amendments and the Deputy knew of his party's amendments before I did.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Minister had notice of those amendments for a long time.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The volume of amendments was available to all at the same time.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Minister keeps discussing the principles. He should keep to the amendments.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I am responding to the points made by Deputy O'Malley.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The amendments have been put down for a specific purpose and Deputy O'Malley has supported them.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The amendments in that volume, many of them put forward by the Opposition Party, could not be described as amendments which Deputy O'Malley surreptitiously negotiated in Merrion Street. No amendment has been surreptitiously negotiated in Merrion Street. No amendment to the Bill can be implemented without being brought on to the floor of this House. If Deputies dislike any of the amendments or think they are deficient or excessive, let us discuss them in those terms.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Let us do just that.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Let us not make allegations [2609] about amendments being surreptitiously made.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Dozens of amendments have been made already this very day without one word being discussed in the House.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputy O'Malley made his speech without one word of interruption. He should let the Minister reply.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  We, like the Opposition, had discussions with people affected by these. Deputy O'Kennedy spent some time telling me today that he had had lunch with some people who had an interest in this. That was perfectly in order.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  This is on a point of order. That Deputy O'Kennedy had lunch with A or B is hardly relevant to the amendments to which we have asked the Minister to direct himself.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I was discussing the points made by Deputy O'Malley.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The Minister was certainly ignoring some of the points made by Deputy O'Malley on the relevant amendments.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Deputy O'Kennedy must restrain himself and allow the Minister to make his speech.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I know the point that the Deputy is making and I am just as conscious of it as he is. If he had the goodness to listen, he would hear the point which I am about to make. We are now at the point where we are discussing this amendment across the floor of this House. I will not make any accusation against the Opposition of surreptitiously putting amendments together. We discussed them here openly on the floor of this House.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  We have had the prologue, let us have the drama now. We have only half an hour.

[2610]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I am responding to points made with a degree of passion and conviction by Deputy O'Kennedy's colleague. I would like the opportunity to respond to them in the way in which they deserve. In this matter I am prepared to listen on this section, as on the others, to any points made by Deputies this evening and to reflect on them. If I do not find that I can agree with them this evening, I can still reflect on them and come back on Report Stage. I will not put up with the accusation of surreptitious activity when we are discussing amendments here in this House. I have no intention of branding anybody as a leech. There are many in our community whose efforts and success we need in order to gain our objectives. On the other hand, we have a great degree of concern that, where companies or individuals default on their obligations in the tax field there are very few sanctions which can be attached to those who can be held most responsible. Nobody can deny that there is disquiet on that score, and it is to respond to that disquiet that we have the measure which Deputy O'Malley is complaining about. There are provisions here for penalties in relation to officers of companies in particular circumstances. I make the point that it is not an innovation to provide for penalties on the secretary of any company where an offence has been committed by the company, through fraud or negligence.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  The secretary.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  A number of statutes have provisions dealing with neglect by directors and other officers. There is the Consumer Information Act of 1978 with which Deputy O'Malley should be familiar and the Casual Trading Act of 1980 and the Criminal Law (Rape) Act, 1981, as regards publication of unauthorised matter. In those cases, we have provision for penalties on an officer of a company as a result of an offence committed by fraud or negligence.

Deputy O'Malley made the point that in the section that we are discussing an auditor of a company becomes liable for [2611] these penalties on the basis that the Companies Act, 1963, makes him an officer of the company. Section 162 (3) of the Companies Act states:

None of the following persons shall be qualified for appointment as auditor of a company:

(a) an officer or servant of the company.

I would conclude, subject to further discussion if the Deputies have different ideas about it, that that means that an auditor cannot be an officer of the company. Perhaps some of Deputy O'Malley's fears are not entirely justified in that respect.

Before a charge arising from the provisions of this Bill can be brought against a director or any officer of the company, it must be proved that an offence was committed by the company and it must be shown to the satisfaction of the court that the person concerned consented to the offence or connived at it, or that it was attributable to neglect on his part.

Therefore a particular degree of culpability must be in evidence before a charge in respect of negligence and complicity in the offence could be sustained. I would make the further point that the matters which are offences under the provisions of this Bill are already offences under the existing legislation. I submit that all of that puts a different complexion on the points made by Deputies O'Malley and O'Kennedy.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  When I put down these amendments it was as a consequence of very deep consideration and of the clear evidence that we were moving into a new minefield. It was clear from the Minister's failure to reply to the points made by Deputy O'Malley and me that he is now conscious of having overlooked the dangers involved. He is moving into a territory where there can be criminal liability for acts for which one had no responsibility and of which one had no knowledge.

The Minister very carefully avoided [2612] taking up the points I mentioned but the explanatory memorandum is somewhat more precise than he has been because it tells us that the offences which are covered by the section include refusal to make statutory returns knowingly or to negligently furnish incorrect returns. Obviously, that can apply to accountants. I could read the section but having regard to the time constraint I shall leave it for the moment.

We go on to find reference in this context to failing to make PAYE and VAT remittances. That, too, is an offence under the section. Incidentally, this new provision will mean that the courts who normally have jurisdiction and discretion to apply the Probation of Offenders Act will not be allowed to do so in this case even in respect of a conviction for what is now to be a new offence of delegated criminal negligence.

When I moved the amendments I pointed out that not in Great Britain or elsewhere so far as I am aware and certainly not in this country is there any provision which makes it an offence on the part, for instance, of professional persons such as as an accountant or a solicitor to furnish accounts which to their knowledge are full and complete returns but which may not be such. That is covered under the section. Such persons will now be guilty of an offence by reason of information supplied to them by clients. If it is proved to the satisfaction of the court that the officer of a company was guilty of negligence or of a deliberate omission, the director of the company is responsible although he may have no knowledge of the offence. The Minister chose his words carefully but he was aware that he was deliberately avoiding the issues raised in these amendments. He said that there are provisions in the legislation already whereby directors and other officers of a company are liable for criminal sanction. There is no question about that. The Minister said also that there are provisions whereby officers of a company can be found guilty of fraud or negligence. I agree with that too but it is not what we are questioning here. We are not saying that in no circumstances can directors or officers be liable [2613] under the criminal law or any other law but we are saying that the law cannot tolerate a situation where a director can be liable without his knowledge for the failure, whether wilful or otherwise, of an officer to provide the returns that he should have provided for the Revenue.

Our amendments are framed carefully and unless the Minister adopts them, a director in the circumstances I have outlined will be liable to be convicted of a criminal offence and in that case the court would have no discretion even to apply the benefit of the Probation Act. That is an extraordinary situation. I do not believe that the courts should be applying the benefit of the Probation of Offenders Act because in no sense is a person in those circumstances an offender. The Minister must know that the provision covers the case also of accountants or solicitors but he has been careful not to answer the points we raised in that respect. He cannot answer them. This provision is monstrous by any standards and must not be allowed to become law.

Deputy O'Malley is right. We have introduced many new provisions. For instance, we have had the provision in respect of the small trader. Many of these people may not be able to cope with the responsibility being placed on them. Anyone who is guilty of negligence in failing to present the necessary returns is now to be liable for a £10,000 fine or for imprisonment of up to five years without there being any chance of his having the benefit of the Probation Act applied to him.

I wish to refer again to the amendments and to the reasons for them because the Minister has not directed his attention to these amendments. I have asked that the word “negligently” in specific cases be deleted. From page 66 we are asking to have deleted the words, “or to have been attributable to the neglect on the part of”. Subsection (5) provides that where an offence under this section is committed by a body corporate, where the offence is shown to have been committed with the consent or with the connivance of, or to have been attributable to neglect on the part of, any person who when the offence was committed was a director, [2614] manager or secretary or other officer of the body corporate or a member of the committee of management or other controlling authority of the body corporate, that person shall also be deemed to be guilty of the offence and may be proceeded against and punished accordingly. Under this section each one of them can be guilty of the offence which is attributable properly to the neglect, wilful or otherwise, of the officer concerned.

A number of us have been on that side of the House. It is not easy to acknowledge: “I was wrong. I was not fully advised for one reason or another. There was too much pressure on me. I did not see the legal implications of what I am asking the House to do.” After what we have pointed out to the Minister this evening, I cannot imagine that he does not now see the legal implications. Had he read his own explanatory memorandum in detail he would realise that it says:

Where an offence committed by a company is shown to have been committed with the consent or connivance of, or to have been attributable to the neglect of, a director or other officer of the company, that person also is deemed to be guilty of the offence and may be prosecuted accordingly.

It goes on to tell us the range of offences covered.

The Minister said no new offence is being created here. We should have convinced him by now that we are moving into uncharted territory when we are talking about liability for the negligence of others as a criminal offence. I want to invite the Minister to refer us to the statute which makes it an offence under the terms described in section 83(2). If the Minister can produce to me now the section of any existing legislation which sets out, as they are set out here, the elements of an offence under the existing law. I will accept that there are grounds for his contention that no new offence is being created. If he cannot, he should acknowledge that what he said is misleading, even if it was not deliberately misleading, and he has an obligation to withdraw this section from the Bill until [2615] such time as he can correct it to achieve whatever his intention is.

If there is wilful withholding, if there is deliberate misleading, if there is negligence on the part of an officer, that officer should be liable as he is under existing legislation. If we are dealing with a new principle which does not exist in the criminal law and someone who had no knowledge or responsibility and innocently presented to the Revenue Commissioners returns which were furnished to him by somebody else is to be liable for criminal negligence and liable for conviction and a penalty of five years or £10,000 without the benefit of the Probation Act, I do not think the Minister would wish to achieve that result. He will have achieved something which would not be the kind of monumentum aere perennius which he would like to achieve. I invite him before we finish at 10.30 p.m. on these sections — and he has the benefit of his advisers — to produce evidence of that terminology in existing legislation to confirm that these offences already exist.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  On a point of order, a Leas-Cheann Comhairle, I want to draw your attention to amendment No. 84. That amendment was submitted to your office in my name and the name of Deputy De Rossa.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Amendment No. 84 on my amendment sheet is in the name of Deputy Bell.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  That is the point I am raising if you are listening to me.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  I am listening.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  That amendment was submitted by me and Deputy De Rossa to your office together with a number of other amendments to which our names were not affixed. I am making the point that our names were appended to that amendment and, through the negligence of your office, our names do not appear on the amendment sheet. Deputy Bell [2616] cannot be here to move it tonight and I want to move that amendment.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  If Deputy Bell gives permission to Deputy Mac Giolla to move it, he can move it in due course. At the moment we are dealing with amendments Nos. 79, 81 and 85.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  I know that. I have been waiting patiently for an hour and a half during which the time of the House was monopolised by Deputy O'Kennedy and others.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  That is not the fault of the Chair.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  I want to object, and I want you to draw the matter to the attention of the Ceann Comhairle and have an examination made of the papers in your office to see that our names were appended to the amendment.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  We will do that.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  It is a bit late.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  I want to express reservations about this section of the Bill. I regret having to do it on the floor of the House but, as a Member of the House, I feel obliged to voice my opinion and, since this is the only opportunity I will have, while I regret that I have to do it publicly I feel it should be done here. I want to go back to where all this great panic about tax evasion came from. It can be related back directly to an incorrect statement issued by the Revenue Commissioners which overstated the amount of tax outstanding and caused an almighty panic and an almighty critical upheaval and all sorts of protests and marches on the streets.

Presumably the same office produced these amendments, coming under the Department of Finance. At the same time certain inspectors of taxes are using, politically, information confidentially obtained, and appearing on public programmes. The number of instances has weakened my faith in the bona-fides of [2617] this section. The Minister should give very careful consideration to the section before it is implemented.

This Bill has not been duly considered by the legislators. It has not been given due criticism and examination. Unfortunately, we are now working against a time table. The Bill must be passed by next week. This section of the Bill should not have to be passed by next week. Perhaps the Minister would consider referring it to an all-party committee of the House.

If the people in the civil service who are advising on this were equally as concerned about the abuse of the Official Secrets Act, legislation would come forward from that source to deal with civil servants and inspectors of taxes who are using information and leaking information every day of the week. This House should sit up and take notice. The State is no longer being run by political representatives. It is being run by a permanent government who are by-passing at every turn this House and the Executive. There is no doubt about that. If this Bill is a product of that type of thing——

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Hear, hear.

Mr. G. Mitchell: Information on Gay Mitchell  Zoom on Gay Mitchell  ——all parties in the House who are genuinely interested in democracy will have to take them on. This is not a criticism of the Minister. I am trying to be honest and I am not being political. I hope Deputy O'Malley will not be offended if I say that when he was Minister he was not in any way different. A great deal of legislation which was introduced was brought in in a similar way. We must express very serious concern about this. For instance, if an inspector of taxes overassesses somebody, or if he places an assessment on somebody which they are not in a position, because of an earlier amendment passed, to appeal, is that inspector of taxes liable for negligence? Can a taxpayer in that case take similar action? Where is the equity in that? Subparagraph (g) talks about anybody who:

obstructs, delays or interferes with any [2618] officer of the Revenue Commissioners, or any other person, in the exercise or performance of powers or duties under the Acts for the purposes of any tax.

What is meant by “delays”? What happens in an office of a practitioner of tax consultancy when somebody is out sick, or absent from his office or on some other business or some other activity? Does that constitute a delay? That type of provision would not be passed for any other section of the community. I have the strongest reservations about it which should be expresed here and discussed by the House before this section is passed.

I accept entirely—and this position has obtained for too long—that there are people in this State who are not paying their way, that there are people in this State who have not been making proper returns. In an earlier debate I suggested that another way to approach this, particularly for business people whose returns are submitted by accountants, would be to create a State register of accountants. In that way if any accountant knowingly or wilfully submits accounts to an inspector of taxes which have been knowingly, wilfully and improperly prepared then, like any other professional person — say a doctor — that accountant should be struck off the register. I believe that would be consistent with what is done in respect of abuses by other professions and would equally serve the end the Minister is seeking to achieve. I really believe that those in this House who view totalitariansim as the end for which we should be aiming would be very happy with this provision. I believe this is a dangerous provision which should not be nodded through. Rather it should be given careful consideration because it will affect not only well-off-business men but also the liberties of very many other people.

I want to make a point in regard to auditors not being officers. Anybody who had studied company law will know that an auditor is not an officer. There are many companies that do not have the services of a fulltime accountant whose auditor acts as accountant as well and in that role can act as an officer of the company. [2619] Presumably if he presents weekly or monthly figures, or if he deals with the tax affairs of the company, in addition to auditing its balance sheet, then he is acting in a controlling and management capacity. In that case an auditor could, despite the advice the Minister has been given, find himself in difficulties under the provisions of this section. This section warrants particular examination by legislators. It has been subjected to examination by everybody else. I do not know from where it emanated but I believe the Minister would be doing a genuine service — and one which would not cause anybody to lose any face — if this section were referred to an all-party committee of this House to consider its implications because it really is a provision that warrants serious consideration before being passed.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  As the amendment is in my name, I just want to support what Deputy G. Mitchell has said. You are aware of the fact, a Leas-Cheann Comhairle, that by agreement we had 30 hours to discuss 109 sections. I just want to tell the House, the Minister and Deputy G. Mitchell in particular, that it was no accident that of those 30 hours for 109 sections I requested our Whip to provide three to discuss this one section, to provide one-tenth of the time to discuss one section in a Bill of 109 sections. I clearly saw that this section is a minefield, as I have already described it. But although we have had more time on this section than on any other, as Deputy G. Mitchell said, even three hours is not sufficient. Unless the Minister is prepared to withdraw it or accept our amendment, I want to support what Deputy Mitchell has said.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  A Leas-Cheann Comhairle——

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  I will allow Deputy Mac Giolla to speak on amendment No. 85 but not to move it.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  I must protest that the Minister is not allowed now to make any [2620] reply to anything that has been said. Deputy G. Mitchell has done this repeatedly throughout the day — just before the Minister is due to conclude, he gets up and speaks for ten minutes, allowing the Minister only three minutes to reply——

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  He is entitled to——

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  Yes, I am speaking on Deputy O'Kennedy's amendment if I cannot move my own. All I want to say is that we have witnessed the accountants' lobby screaming their heads off for the last hour and a half. This is the first effort ever made to tackle the question of tax evaders and avoiders. Tax evasion means children not receiving a proper education, people with medical cards unable to get drugs, elderly people unable to get medical treatment, people being put out of jobs, young people having no future — in fact the State being brought to the brink of financial ruin. That is what this is all about. There is now an attempt being made to tackle these questions. The people who are telling the Minister how to do it are the accountants and the legal people, who tell him how to get through these loopholes, how to avoid these taxes——

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Impose a bank levy.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  Presumably they make a decent living out of it but they are now screaming their heads off because, for the first time, a Minister is making some effort to tackle them. The motion in my name and which I should have been allowed to move here was in fact endeavouring to strengthen that action. I might add that if negligence is not incorporated these people will plead professional incompetence rather than be a party to the particular crime.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  To hell with justice, put them in jail is the Deputy's motto.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  This is an essential element to ensure that the people who find all these loopholes, who know every trick are covered — and we listened to [2621] the same on the appeals question when hours were spent on it, to allow them spend all their time appealing their cases so that they would never have to pay tax. The only decent elements in this dreadful Finance Bill are the attempts to get at the evaders. It is a dreadful thing that it is being pushed to such an extent, that the only thing in this Bill on which the Minister is really being pilloried is the attempt to tackle the tax evaders, who have brought us to the state in which we find ourselves, who have PAYE workers screaming on the streets because they see them evading taxes. This is one effort being made to deal with it.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Why does not the Deputy put down an amendment to bring in capital punishment as well? He should go on and say: shoot them like they do in Moscow.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Deputy O'Malley, please. Deputy Mac Giolla to continue.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  I am not allowed to move the amendment in my name but I am making those points and I will allow the Minister the remaining two minutes.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The discussion we have had here this evening has served extremely well the purpose of having a debate of this kind because it has brought out clearly the concern of Members on both sides of the House about the provisions that we have had for dealing with Revenue offences, about the extent to which we should sanction such offences and the degree to which we should attach culpability to those who are involved in the commission of those offences.

It is for that reason, and because of the concern that has been expressed, that I will undertake now to reconsider this section before Report Stage. I am not sure what further procedures might be envisaged to deal with the concern that has been expressed here this evening, and in the minute and a half or so remaining, I would not be in a position to go into detail on all of the points that have [2622] been made here. But what I want to assure the House of is that the concern that has been expressed here will be fully considered by me. On the basis of that further reflection I will consider what is the most appropriate way of going about tackling the matters that are dealt with in this section.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I want to express my appreciation to the Minister for his readiness to recognise the validity of the arguments we presented. It vindicates the approach we have taken in asking that three hours be devoted to one section in a debate of 30 hours on 109 sections. I want to express our genuine appreciation on the part of myself and my party. In the light of that I hope the Minister will not now ask us to pass this section as it is because I am afraid we cannot. I hope our opposition to it will be seen on the basis of the arguments that we have made but that we will have the opportunity of consultation on the basis that the Minister is suggesting also.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Whatever the decision taken this evening on this section, the matter will be fully reconsidered and will be brought back to the floor of the House before the Bill is enacted.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  On a point of order, I should like to join with Deputy O'Kennedy in expressing my appreciation of the attitude the Minister has taken as a result of this debate. That is very sincerely said because it is not every Minister who will accept points made in this way and in these circumstances. Although we will be opposing the section, if it were passed the proper procedure would be for the Minister on Report Stage to move to have it recommitted to a Committee of the full House and that would enable procedurally the kind of discussion that needs to take place. That can be done by agreement without any difficulty and procedurally it would be the appropriate thing to do.

Mr. Prendergast: Information on Frank Prendergast  Zoom on Frank Prendergast  I wish to speak on this matter.

[2623]An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  I am very sorry but the Deputy may not speak now. As it is now 10.30 p.m. I must, in accordance with the order made by the Dáil on 24 May, as amended by the order made today, put the following question: “That the amendments set down by the Minister for Finance to section 83 and not disposed of are hereby made to the section and that the section, as amended, is hereby agreed”.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Despite the understanding we have, the Minister will understand that we must call for a vote.

[2624]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I understand Deputy O'Kennedy's position. We will proceed this evening without prejudice to what will happen at a later Stage of this Bill. Whatever approach is taken by Deputy O'Kennedy, the matter will be brought back to the floor of the House.

Mr. Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  I hope the Minister is not weakening.

Mr. O'Malley: Information on Desmond J. O'Malley  Zoom on Desmond J. O'Malley  Are left wing lobbies the only ones the Minister is allowed to give in to?

Question put.

Allen, Bernard.
Barnes, Monica.
Barrett, Seán.
Barry, Myra.
Barry, Peter.
Begley, Michael.
Bermingham, Joe.
Birmingham, George Martin.
Boland, John.
Bruton, John.
Bruton, Richard.
Burke, Liam.
Carey, Donal.
Collins, Edward.
Conlon, John F.
Coogan, Fintan.
Cooney, Patrick Mark.
Cosgrave, Liam T.
Cosgrave, Michael Joe.
Coveney, Hugh.
Creed, Donal.
Crowley, Frank.
D'Arcy, Michael.
Desmond, Eileen.
Donnellan, John.
Dowling, Dick.
Doyle, Avril.
Doyle, Joe.
Dukes, Alan.
Durkan, Bernard J.
Enright, Thomas W.
Farrelly, John V.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Oliver J.
Griffin, Brendan.
Harte, Patrick D.
Hegarty, Paddy.
Hussey, Gemma.
Kavanagh, Liam.
Kelly, John.
Kenny, Enda.
McCartin, Joe.
McGahon, Brendan.
McGinley, Dinny.
Mac Giolla, Tomás.
McLoughlin, Frank.
Manning, Maurice.
Mitchell, Gay.
Mitchell, Jim.
Molony, David.
Moynihan, Michael.
Naughten, Liam.
Nealon, Ted.
Noonan, Michael. (Limerick East).
O'Brien, Willie.
O'Donnell, Tom.
O'Leary, Michael.
O'Sullivan, Toddy.
O'Toole, Paddy.
Owen, Nora.
Prendergast, Frank.
Ryan, John.
Shatter, Alan.
Sheehan, Patrick Joseph.
Skelly, Liam.
Spring, Dick.
Taylor, Mervyn.
Taylor-Quinn, Madeline.
Timmins, Godfrey.
Treacy, Seán.
Yates, Ivan.

Ahern, Bertie.
Ahern, Michael.
Andrews, Niall.
Aylward, Liam. [2625]Brady, Vincent.
Brennan, Mattie.
Brennan, Paudge.
Brennan, Séamus.
Browne, John.
Burke, Raphael P.
Byrne, Hugh.
Byrne, Seán.
Calleary, Seán.
Colley, George.
Conaghan, Hugh.
Connolly, Ger.
Coughlan, Cathal Seán.
Cowen, Bernard.
Daly, Brendan.
Doherty, Seán.
Fahey, Francis.
Fahey, Jackie.
Faulkner, Pádraig.
Fitzgerald, Liam Joseph.
Fitzsimons, Jim.
Flynn, Pádraig.
Foley, Denis.
Gallagher, Denis.
Gallagher, Pat Cope.
Geoghegan-Quinn, Máire.
Harney, Mary.
Hyland, Liam.
Barrett, Michael.
Barrett, Sylvester.
Blaney, Neil Terence.
Brady, Gerard. [2626]Kirk, Séamus.
Lenihan, Brian.
Leonard, Jimmy.
Leyden, Terry.
Lyons, Denis.
McCarthy, Seán.
McCreevy, Charlie.
McEllistrim, Tom.
MacSharry, Ray.
Molloy, Robert.
Morley, P.J.
Moynihan, Donal.
Nolan, M.J.
Noonan, Michael J. (Limerick West).
O'Dea, William.
O'Keeffe, Edmond.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond J.
Ormonde, Donal.
O'Rourke, Mary.
Power, Paddy.
Treacy, Noel.
Tunney, Jim.
Walsh, Joe.
Walsh, Seán.
Wilson, John P.

Tellers: Tá, Deputies Barrett (Dún Laoghaire) and Taylor; Níl, Deputies B. Ahern and V. Brady.

Question declared carried.

Section 83, as amended, agreed to.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Amendment No. 88 in the names of Deputy Mac Giolla and Deputy De Rossa has been ruled out of order. Amendment No. 89 in the name of the Minister.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Before the Minister moves his amendment may I just ask for guidance on a matter of procedure on this whole chapter? Having regard to the limitations on the debate——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  Order. If Deputies want to have a chat would they please select some other part of the House?

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Unless we can agree that Deputies make their contributions on the various sections together we will never come to the end of them. They are all interlinked. There is the definition section in terms of our contribution and we can then vote on them. A contribution on any one cannot be totally effective unless the Deputy is allowed to range over the whole purpose of the Bill in the short time available to us. Would the Minister agree to that?

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  There are quite a few sections to be amended and the House is meeting tomorrow. The House can do as the Deputy suggests if it likes but it would be chaotic and I think we should first of all deal with the amendments to the section.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I accept your ruling because ordinarily we avoid creating precedents. I appreciate the Chair cannot totally accede to our request. I would ask the Ceann Comhairle in the circumstances to allow a reasonable degree of latitude in dealing with particular amendments on a particular section or subsection.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Chair will allow a reasonable amount of latitude.

[2627]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  That is all I seek. I am obliged to the Chair.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I move amendment No. 89:

In page 66, subsection (1), to delete line 40, and substitute the following definition:—

“ `child' has the meaning assigned to it by section 141 (1B) of the Income Tax Act, 1967;”.

The purpose of this amendment is to substitute for what has been circulated in the text of the Bill the following definition of “child”. That is “child” has the meaning assigned to it by section 141 (1B) of the Income Tax Act, 1967. The term in question has a number of definitions in the Income Tax Acts and the purpose of this amendment is to pinpoint the definition that is applicable to a particular tax in question in this part of the Bill.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I know the purpose must be to pinpoint the particular definition but would the Minister like to elaborate a little further and tell us what exactly is the definition that is contained in the other Act to which he is referring so that we will know exactly what it is we have to agree with?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  The definition of “child” given in the section I have mentioned of the Income Tax Act, 1967 is as follows:

“child” includes a stepchild and an illegitimate child whose parents have married each other after his birth and a child in respect of whom an adoption order under the Adoption Act, 1952, is in force;

That is the definition we are using in this case.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Could that mean that in assessing the aggregate income of the household, it could be applied to cover the income of step-children, adopted children or illegitimate children?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I understand the income of children is included in the aggregate [2628] income of the household. The income of a child as I have just set out would be included.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I am glad that I raised the question then. We have an amendment down in any event to limit the income which is relevant in this case to the income of husband and wife as distinct from the aggregate of anybody else who may be residing in the house. While normally the Minister would find every support for an extension of the definition of “child” to include step-child, adopted child and particularly illegitimate child, in this case we could not agree to support the Minister's proposal.

Amendment put and declared carried.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  I move amendment No. 90:

In page 66, line 45, after “Acts”, to insert “as reduced by the provisions of section 137 of the Income Tax Act, 1967 and section 34 of the Finance Act, 1974, section 8 of the Finance Act, 1978, and section 23 of this Bill”.

To put it simply, we are talking about net taxable income. We feel strongly that the aggregate income which the Minister has now indicated can include not just the aggregate income of husband and wife but the aggregate income of children, step-children, adopted children and illegitimate children who might have very little obligation or rights in terms of the family property. If one aggregates all those incomes without coming into the wealthy class one could have an income in excess of £20,000. We are anxious to achieve the confinement of the definition of income to net taxable income and as I have said that of husband and wife. We wanted it to be not gross income but net taxable income. That should commend itself to the Minister even if he is not prepared subsequently to agree to adopting our amendment which will confine the aggregate income to that of husband and wife. He is thinking in terms of including the whole extended family and granny incidentally. Surely it should be the net taxable income?

[2629]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  Deputy O'Kennedy has raised several different questions and I will not anticipate discussion of the later amendments by talking about some of the difficulties that would arise. In regard to the aggregate income of husband and wife, I would point out what the particular sections of the various Acts mean in terms of the deduction that Deputy O'Kennedy proposes we make from the income in this case. The allowances that are provided for in section 137 of the Income Tax Act, 1967 are the married allowance £2,900; the widowed allowance £1,950; the single allowance £1,450; the single parent allowance £1,450; the PAYE allowance £600; the child allowance £100; the incapacitated child allowance £500; dependant relative allowance £110; life insurance relief; medical insurance relief; health expenses relief; allowance for care of incapacitated person; the blind allowance and the age allowance. Under section 34 of the Finance Act, 1978, the allowances in question there are the relief to individuals on loans applied in acquiring an interest in companies and the allowance in question in section 23 of the present Bill is the relief for loan interest paid. Those are the deductions which the Deputy is proposing to make from the income that would fall to be considered under the provisions of this part of the Bill.

The effect of this proposal would be to take a large number of people out of the scope of this tax and it would bring about considerable complication in the administration of the tax by requiring as large a number of factors to be taken into account to determine whether the extension granted by section 91 would apply.

In this connection the Government's intention is that the tax would be collected by self-assessment without having too many bureaucratic elements involved. In that connection it is necessary that the test for the applicability of the tax should be as simple as possible and that it should be based on a figure that would be easily computed and identified by the taxpayer. If we introduce a complicated formula and a requirement to take account of all the different allowances, [2630] it is possible that many taxpayers would find self-assessment difficult and therefore would be inclined to leave the assessment to the Revenue Commissioners. I would not want that in relation to this tax.

The intention behind this provision is to secure a contribution from those who have better than average houses but to exempt those whose taxable capacity, when measured by their incomes, would not be great enough to bear such a tax. A gross income level as defined in this part of the Bill of £20,000 is reasonable in regard to taxable capacity, having regard to the level of income and of the tax. Therefore I hold with the view that it would be unnecessary and undesirable to introduce this level of complication into the formula required to determine whether the income level of the potential taxpayer would be such as to give rise to liability for tax.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  The Minister said a moment ago that the object was to extract a contribution from the owners of better than average houses. That leads me to wish that the rules of procedure of the House were such that we could discuss the section first and then the amendment, rather than the other way around. What worries me is the philosophy, if it can be called that, behind this tax, the principle on which it is proposed to levy it, and from the way we arrange our affairs here it appears that we will get one shot only at discussing this matter, namely, when the amendments have been disposed of and the section has been dealt with, although the interest that has brought about 30 Deputies into the House centred not on the nuts and bolts of the individual amendments but on the principle behind this proposed system of taxation.

I wonder if the Minister would make it easier for us in dealing with these amendments to outline briefly now, even if only in his own words, what exactly has moved the Government, other than the political exigencies which led to their formation — I wish Deputies on the far side would not laugh, because they are caught in exactly the same jam as Deputies on this [2631] side are caught in: it is not a subject for laughter and any Deputy over there who thinks it is is in the wrong building.

At this stage of the debate I should like to know how the Minister justifies a levy on this type of property but on no other — I say that as somebody who has consistently, in good times and in bad, advocated a wealth tax — a levy on what he calls better than average residences. Without holding the Minister up, I wish the Minister would indicate that now so that in the course of any discussion that follows we will know exactly what the Government have in mind and how they propose to defend it, possibly in court.

Mr. Prendergast: Information on Frank Prendergast  Zoom on Frank Prendergast  I take it, that this will be debated in an omnibus way — this amendment and others and the section. I should like to speak to the section and the amendments, including the Minister's amendment dealing with wrong evidence being given as part of evasion or avoidance. I should like to get clarification on what the distinction is. I understand that tax evasion is when I owe tax to the State and do not pay it and that avoidance is when I manage through some devious, albeit clever or legitimate device not to pay tax. We all know professional people — this is no reflection on their integrity — who advise people about how they may avoid paying tax. Is that a crime? This is happening. I heard an eloquent moving plea by Deputy O'Malley on behalf of the person who is innocently negligent.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  It is not for me to deal with this matter but I do not think the Deputy is addressing himself to this section.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  We are dealing with amendment No. 90 in the name of Deputy O'Kennedy. Whatever the Deputy has to say must be relevant to the residence tax.

Mr. Prendergast: Information on Frank Prendergast  Zoom on Frank Prendergast  I understood we could talk on the series of amendments.

[2632]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  We are not dealing with avoidance or evasion per se.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  The Deputy must confine himself to the residence tax.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  Deputy Kelly made a point with which I am in sympathy but I made the case initially that it is going to be very difficult to deal with this list of amendments without varying the overall principle. I understand Deputy Kelly is making the same point and if the Minister wishes to reply I will yield at this stage.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I will be guided by you, Sir, and by the procedures of the House. I take the point made by Deputy Kelly and if you, Sir, agree, I am prepared to do what he suggests.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Only if it is relevant to the residential tax.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It is relevant to the provisions we are discussing and to each of the amendments we are going to discuss. Deputy Kelly asked the reason for having this tax and why it figures in this Finance Bill. In broad terms the reason for that tax could be outlined as follows.

The level of capital taxation is now less than it was some years ago for a number of different reasons, particularly because of changes made in the tax system. The main property most people own, their residence, is not directly subject to tax, again as a result of particular decisions made on taxation in recent years, and where the value of that property can be taken as one indicator among many, but an indicator nevertheless, of that person's material well-being, wealth, or a reflection of his income, there is a case to be made for saying that the contribution a taxpayer would make to the general Exchequer, the public purse, should bear some relation to the value of that property. It is, broadly speaking, for those reasons that that tax was proposed in the first place. The rest of the section and the amendments deal with the method of application of that tax.

This is a capital tax. In the normal way, [2633] the principal asset of any taxpayer is the biggest piece of capital he owns, and in most cases his residence is his wealth, his well-being or his income. Therefore it can be regarded as a measure of his ability to contribute to the public purse and to participate in providing the necessary resources for the State to carry out their activities.

Mr. Taylor: Information on Mervyn Taylor  Zoom on Mervyn Taylor  I am grateful to the Minister for his enunciation and broad outline of the purport of this tax, but I do not think he is meeting the innuendo cast on this issue by Deputy Kelly, and he did not give the answer for which Deputy Kelly was hoping. I can give Deputy Kelly an answer, if I may be so bold. The answer is yes, the purport of this tax was the result of pressure by the Labour Party, and rightly so. If that was his innuendo then the Labour Party willingly——

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I do not use innuendo, I was saying it plainly. It was the result of the Labour Party——

Mr. Taylor: Information on Mervyn Taylor  Zoom on Mervyn Taylor  The Deputy did not say it plainly. It was done by innuendo to the accompaniment of some mild amusement on the Fianna Fáil front bench. Let us be clear about this. What is wrong with this tax? Why the complaints? Why this series of amendments from the Opposition to cut down what is, even in the form proposed, a very modest tax which will affect very few people who will be well able to pay? Those who occupy a dwelling house worth about £65,000 and upwards——

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  It will not bring in very much money and it is only a minor ideological——

Mr. Taylor: Information on Mervyn Taylor  Zoom on Mervyn Taylor  I wish there were many more people living in houses worth £65,000 and upwards, who have family incomes, including children's incomes, of upwards of £20,000 a year. What is the extent of this tax? On a house worth £75,000 there is an excess of £10,000, and this means they will have to pay £150 a year.

[2634]Mr. G. Brady: Information on Gerard Brady  Zoom on Gerard Brady  That is a lot of money.

Mr. Taylor: Information on Mervyn Taylor  Zoom on Mervyn Taylor  It certainly is to many people, but to people living in a £75,000 house with an income of £20,000 a year, £150 is a very modest sum. Even that is regarded as a subject of chipping away by way of amendments put down by Deputy O'Kennedy. There could be, and there has been, criticism levelled at this tax because it does not go far enough, but I find it remarkable that the thrust of objections to the tax should be put on the basis that people living in a £75,000 house with an income of £20,000 would object to paying the modest tax provided for here.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I want to say this in all friendship to Deputy Taylor whom I respect and value as a colleague. I know him too well to suppose that he misunderstands me but I am not whinging nor is anybody else I represent inside or outside my constituency about the sums they are likely to have to pay under this tax. I live in a very good house and I would be paying under this tax, as I work it out, a good deal less than I would now be paying if the rates system still existed. I am not whinging about it, but complaining about its lack of reason, the defective rationality which underlies it, the fact that it was cooked up in the back room of a party other than my own, whom I respect and admire in many ways, and sold as part of a package. It is something which no Deputy in my party sold at the doorstep of any voter whose vote and support was invited. Had I been asked on the doorstep about this tax I would have found it hard to explain to many in my constituency who are not millionaires and who in these times are put to the pin of their collars to maintain a standard of living to which they always supposed that they were entitled to aspire, not by cheating or tax evasion but by hard work, prudence and thrift.

I would like to know the rational philosophy which underlies this measure because I am afraid the Minister has not satisfied me in his attempt to explain. I say sincerely and with no undertone, and hope that it will not be accepted as sarcasm, [2635] that the Minister has had a hellish day. He has been on his feet literally — or certainly figuratively, because his mind must be at work — for over 12 hours with only a short break. Nobody is at his best at this hour of night. I would far prefer to argue this matter out in the morning, if it is possible to argue it out in the time constraints confronting us. I do not mean to torment the Minister, a colleague whom I deeply respect and admire. I know he will accept that without my saying any more about it.

Let me make a few comments on his defence of a tax which I have heard him for the first time today defend and which he was never asked to defend in County Kildare last November. He said that the level of capital taxation was now somewhat less — I wrote down as fast as I could his exact words — than it was some years ago. That is an amazing litotes, making something little which should really be big. The truth is that the contribution made by capital taxation in any shape or form to State revenue in 1983 is little more than a quarter of what it was in 1973. That is an amazing fact. It is hard to believe that in 1973 almost four times more was being contributed, as I understand it, to the national revenue by capital taxation than is now being contributed. To that extent, I am completely in the camp not alone of Deputies Taylor and McLoughlin, but in the camp of The Workers' Party.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  The Deputy is welcome.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I regard it as scandalous that in ten years we should have changed the equilibrium of our tax system in a way so regressive and burdensome to ordinary wage earners. Although I believe that Deputies MacGiolla and De Rossa and those who like them talk nonsense when advocating economic salvation through enhanced State investment, they are absolutely right to complain about that tax. The way that came about was this. The 1973 Coalition — one of the best Governments that this State ever had, in spite of many mistakes [2636] and a lot of bad luck, and for which it is my enduring pride to have worked and sweated for four years — came to power on a pre-election programme agreed beforehand in which one of the items was the abolition of death duties, which was a great boost. Of that there is no doubt. The value of land had risen here with enormous rapidity due to our appearing to be going to join and then in effect joining the European Community. Families with a sudden unforeseen death found themselves faced with enormous, crushing bills.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  I am sorry. In fairness, the Deputy is getting into EEC matters.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I am lapsing into a Second Stage speech and should not do that. I apologise.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  Would the Deputy please come back from the EEC?

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I know I have hauled out into deep waters to reply to the Minister's couple of simple sentences on the reduced level of the contribution made by capital taxation. The Minister, the Labour Party and The Workers' Party are right to point that out. The only people who have not complained and pointed it out are my friends in the Fianna Fáil Party who seem able to live with the fact that we are now contributing that much less in capital taxation than we were ten years ago. That is obviously wrong. If the Minister's case could be made by that alone, I would support him with a full heart. But I cannot do that because he is not doing what he should be doing and what this House ought to be able to achieve a consensus about some rational, non-punitive, non-ideological, nondestructive system of bringing people's substance into contribution towards the State's expenses, not in a sense of vindictiveness or a spirit of doing them down because they are rich, but bringing their substance into contribution because God gave them what it takes to amass substance. He denied it to others and to their [2637] children and their grandchildren in the kind of State in which we live. I hope it will not be always so, but it is so far. Nobody has been able to think of a cure for it which combines civil liberty with social justice.

If the Minister had said he would reintroduce not just what the Labour Party demanded last November and December but the old 1975 wealth tax — reformed, civilised, refined in this and that way, made more flexible and with perhaps better allowances, the level of inflation taken into account, allowances made for investment in productive industry or agriculture — that would have been something I would have cheered on. However, he has not done that. He knows that I am not speaking to him personally or to the rest of my party personally, but what he has found himself landed with is producing a package behind which there is no thought. It simply spun off the top of the head of somebody who probably never sought election to this House and never would get elected if he sought it.

Deputies:  Hear, hear.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  I will not say that my heart bled for the Minister — one throws out expressions like that so often that they become demonetised and worthless. I really felt sorry for him putting up the two points which he did put up. His first expression was “the property which most people” and he corrected that then to “many people”. He said that the main property which most or many people own was their residence and it was not now subject to tax. The entire farming population, unless they live on farms of less than seven or eight acres are in a category which his definition does not include. Their main wealth is not in the bricks and mortar above their heads, but in the acres around them. That entire community is laughing over this residential property tax. For the most part, unless they live in gentlemen's residences with easy access to cities and airports, to schools and buses, they live in houses which do not come anywhere near the value of the holdings out of which they make their living. That entire area has to be [2638] excluded, as the Minister in front of me, who was Minister for Agriculture, must know perfectly well. Anyone who is a bit of an investor, who believes in buying house property — and many people have strings of house property — could live modestly, and be caught for nothing. They are not caught on their own residence because it is under the threshold and not caught either on the property which they own and in which other people live, because they do not occupy and own it simultaneously. Where is the reason for that?

Another point which I would like to mention and I do not need to hammer it home is that this form of property is not taxed as Deputy Lenihan would say if he were here, “at this moment in time,” but that will not be the case once the Local Government (Financial Provisions) Bill goes through entitling local authorities to charge for the provision of services, for refuse collection, for the supply of water and even for library services. I might add that I had an agonising appeal today about that from a library society. Therefore, where is the philosophical, the rationale or even the ideological basis in this that would make sense either to Fianna Fáil or to Fine Gael and to a good number of the Labour Deputies, too? Pathetically, the Minister said that it was an indicator of wealth but that was what was said, too, in the days of George II when there was a window tax, when the amount of light a man could afford to let into his house was taken as a rough index of the amount of wall space he had and that in turn was a crude indicator of the cubic content of the house. There was a tax on the number of windows in a house because they could be seen easily and controlled.

What we are talking about here is an index of wealth but it is about as crude and primitive an index of wealth as could possibly occur to the mind of a man who does not have to stand for election but who can sit, I will not say in the Labour Party headquarters but in some back room of a back house in some back suburb and think up such a plan to foist on a Coalition Government who have enough problems to contend with without [2639] having to digest this place of irrational ideology.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  I have been trying to pay attention to Deputy Kelly to detect how near or how far he was from the amendment before the House. When I was in the Chair last I stated that I would give some latitude but we cannot have a Second Stage debate on capital taxation nor can we treat this Bill as if it were a White Paper on taxation. I hope Deputies will bear that in mind and that we can deal now with the amendment.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  It suits me personally and also my party that you have made that ruling because, first, I would not have the capacity, the conviction or the flow of oratory that Deputy Kelly has just displayed. In your absence we were anxious to allow the Minister reply to Deputy Kelly's request, so that before we come to individual sections we would have some notion from the Minister as to why a provision of this sort should have been proposed. We have had a very interesting analysis from both Deputy Taylor who takes the view that the provision does not go far enough and from Deputy Kelly who clearly opposes it. I do not intend repeating his reasons for opposing it because Deputy Kelly's capacity to express himself cannot be measured up to by anyone else. However, we are in sympathy with many of the points he made. When this tax was proposed we said that, while in the circumstances in which we find ourselves we were not opposed in principle to the tax, it did contain many injustices, inequities and anomalies and that we would be introducing amendments at this stage. We have agreed to allow four or five hours for discussion of the provision because we regard it as important to rectify the situation. It is for that reason that we tabled the amendment before the House.

The amendment seeks to have the income qualification taken as the net taxable income but the Minister has pointed out that included in the qualification are the allowances under the income tax code. He went on to list the [2640] whole range of allowances — blind persons' allowances, children's allowances, disability benefits, pensions and so on. That is the very point we agree with. We know that these allowances are all there under the income tax code but we do not think that any one person or any two or three persons could claim the benefits simultaneously of all of them. We are anxious to ensure that old age pensions will not be included as income for the purposes of this section. We are anxious to ensure that blind allowances will not be included either for this purpose and that children's allowances will be allowed before assessing income. In other words, we are anxious to ensure that all the allowances mentioned in the amendment will be allowed before assessing income for the purpose of the provision. If there is some miracle person or persons who can claim the benefit of all these allowances at the one time we are not dealing with a new kind of tax but with a new kind of person. It never occurred to me that we would find such a person.

The Minister said also that one of the reasons for not accepting the amendment is that it would lead to too many bureaucratic elements being involved. One of the strong reservations we have about the provision is that it will be a treasure hunt for bureaucracy but I will come back to that point later. If the Minister has problems in regard to this tax he has caused them himself. We are told that people would find self-assessment difficult. People know what their tax liability is. PAYE payers are certainly aware of their liabilities in this area and others who may not know will know after this Bill has been passed, having regard to the increased powers being provided for the investigation of accounts and so on. Therefore, I regard it as a spurious argument for the Minister to reject our proposal on the basis that people would have difficulty in knowing what their taxable income is.

It is proper that the allowances we list should be allowed for in computing liability, especially if the Minister is persisting in including subsequently the combined income of the extended family, of husband, wife, grandma, grandpa, step-children, [2641] adopted children, illegitimate children or any others who happen to be living in the home. Surely if we are to proceed on those lines in terms of the assessment of income we should at least be talking about taxable income. If the Minister cannot accept my amendment, we should vote on it now.

Mr. McLoughlin: Information on Frank McLoughlin  Zoom on Frank McLoughlin  Deputy O'Kennedy is allowing himself to be carried away on this matter. He refers to the question of pensions in the context of this provision but is he not aware that any old age pensioner who is in receipt of a second pension has his tax-free allowance reduced by the amount of his old age pension? When the Deputy was Minister for Finance I do not recall his shedding any tears for people in that situation. We know what the Deputy's record is on captial taxation. We know what he did on his return to office in 1978. He merely wrote off millions of pounds with one stroke of the pen. Of course he is concerned and agrees with Deputy Kelly. Neither of them wants this tax but the Labour Party would have sold this much easier to the people on the doorsteps than they would have sold the 1 per cent levy or the reduction in tax-free allowances. In a full year the 1 per cent levy will yield £77 million from the PAYE sector. Let us not forget that of the total tax paid, 90 per cent comes from the PAYE sector while the amount accruing by way of capital taxation is a farce. Neither of the main conservative parties have the guts to introduce proper capital taxation.

Mr. Taylor: Information on Mervyn Taylor  Zoom on Mervyn Taylor  I have a question to put to the Minister. What is the anticipated yield from this proposed tax and what would be the effect on the yeild if Deputy O'Kennedy's amendment was adopted?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  On those specific questions, the anticipated yield of the tax in the form in which it is proposed in the Bill will be less than £10 million and probably somewhere in the region of £6 million. The effect of Deputy O'Kennedy's amendment on that is difficult to estimate, but it would reduce the yield to a very small proportion of that.

[2642]Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  How much?

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It is difficult to say because the Deputy has included so many different allowances in the list he mentioned.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  We are both guessing.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  It is a caricature of the debate for Deputy O'Kennedy to claim that I expected to find a taxpayer who benefited from all these allowances. I want to make clear which allowances he was speaking of in his amendment. It is a wholesale exaggeration for Deputy O'Kennedy to refer to an old age pensioner in the context of this tax as being a person who would be immediately liable for it. The income qualification I mentioned of £20,000 would not be met by an old age pensioner in the sense in which we all understand that term. As the tax is defined here, an old age pensioner could be a member of a family and therefore fail to be considered.

Mr. O'Kennedy: Information on Michael O'Kennedy  Zoom on Michael O'Kennedy  That is the point I am making.

Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  That is a completely different situation. The reason I am opposing this amendment and resisting the idea of taking account of the various allowances specified in Deputy O'Kennedy's amendment is that the figure for income is not in itself a measure of the tax payable. The income figure here represents a threshold level. The tax payable becomes payable if the total income of the household exceeds that threshold level and if, in addition to that, the value of the house in question exceeds £65,000. Since the income itself is not a basis for the tax to be paid, and since we are breaking new ground in terms of taxation in this respect, I do not believe it is appropriate to make the kind of deductions which the Deputy wishes to make in this amendment.

Mr. Dowling: Information on Richard Dowling  Zoom on Richard Dowling  Can the Minister estimate what it will cost to collect this tax?

[2643]Mr. Dukes: Information on Alan M. Dukes  Zoom on Alan M. Dukes  I am very conscious of the cost of collecting taxes. I am also conscious of the fact that is very easy to say in respect of any new tax, or an existing tax, that the collection costs are extremely high, as was said this afternoon [2644] in relation to another measure. It is very difficult to say what this tax will cost and it is for that reason that the tax is in the form it is in.

Question put.

Ahern, Bertie.
Ahern, Michael.
Andrews, Niall.
Aylward, Liam.
Barrett, Michael.
Barrett, Sylvester.
Blaney, Neil Terence.
Brady, Gerard.
Brady, Vincent.
Brennan, Mattie.
Brennan, Paudge.
Brennan, Séamus.
Browne, John.
Burke, Raphael P.
Byrne, Hugh.
Byrne, Seán.
Calleary, Seán.
Colley, George.
Conaghan, Hugh.
Connolly, Ger.
Coughlan, Cathal Seán.
Cowen, Bernard.
Daly, Brendan.
Doherty, Seán.
Fahey, Francis.
Fahey, Jackie.
Faulkner, Pádraig.
Fitzgerald, Liam Joseph.
Fitzsimons, Jim.
Flynn, Pádraig.
Foley, Denis.
Gallagher, Denis.
Gallagher, Pat Cope.
Geoghegan-Quinn, Máire.
Harney, Mary.
Hyland, Liam.
Kirk, Séamus.
Lenihan, Brian.
Leonard, Jimmy.
Leyden, Terry.
Lyons, Denis.
McCarthy, Seán.
McCreevy, Charlie.
McEllistrim, Tom.
MacSharry, Ray.
Molloy, Robert.
Morley, P.J.
Moynihan, Donal.
Nolan, M.J.
Noonan, Michael J. (Limerick West).
O'Dea, William.
O'Keeffe, Edmond.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond J.
Ormonde, Donal.
O'Rourke, Mary.
Power, Paddy.
Treacy, Noel.
Tunney, Jim.
Walsh, Joe.
Walsh, Joe.
Walsh, Seán.
Wilson, John P.
Woods, Michael.

Allen, Bernard.
Barnes, Monica.
Barrett, Seán.
Barry, Myra.
Barry, Peter.
Begley, Michael.
Bermingham, Joe.
Birmingham, George Martin.
Boland, John.
Bruton, John.
Bruton, Richard.
Burke, Liam.
Carey, Donal.
Collins, Edward.
Conlon, John F.
Coogan, Fintan.
Cooney, Patrick Mark.
Cosgrave, Liam T.
Cosgrave, Michael Joe. [2645]Hegarty, Paddy.
Hussey, Gemma.
Kavanagh, Liam.
Kelly, John.
Kenny, Enda.
McCartin, Joe.
McGahon, Brendan.
McGinley, Dinny.
Mac Giolla, Tomás.
McLoughlin, Frank.
Manning, Maurice.
Mitchell, Gay.
Mitchell, Jim.
Molony, David.
Moynihan, Michael.
Naughten, Liam.
Nealon, Ted.
Noonan, Michael. (Limerick East).
Coveney, Hugh.
Creed, Donal.
Crowley, Frank.
D'Arcy, Michael.
De Rossa, Proinsias.
Desmond, Eileen.
Donnellan, John.
Dowling, Dick.
Doyle, Avril.
Doyle, Joe.
Dukes, Alan.
Durkan, Bernard J.
Enright, Thomas W.
Farrelly, John V.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Oliver J.
Griffin, Brendan.
Harte, Patrick D. [2646]O'Brien, Fergus.
O'Brien, Willie.
O'Donnell, Tom.
O'Leary, Michael.
O'Sullivan, Toddy.
O'Toole, Paddy.
Owen, Nora.
Prendergast, Frank.
Ryan, John.
Shatter, Alan.
Sheehan, Patrick Joseph.
Skelly, Liam.
Spring, Dick.
Taylor, Mervyn.
Taylor-Quinn, Madeline.
Timmins, Godfrey.
Treacy, Seán.
Yates, Ivan.

Amendment declared lost.

Progress reported: Committee to sit again.


Last Updated: 14/09/2010 09:08:49 First Page Previous Page Page of 37 Next Page Last Page