I beg to move Section 8.
FINANCE BILL. - COMMITTEE STAGE RESUMED.
(1) Where any interest, dividends, annuities or shares of annuities to which this section applies or the profits attached to any such interest, dividends or annuities fall to be charged under the Rules of Schedule C of the Income Tax Act, 1918, but are in fact not assessed for any year under that Schedule, such interest, dividends, annuities, shares of annuities or profits may be charged and assessed for that year under the appropriate Case of Schedule D.
(2) This section applies to all interest, dividends, annuities, and shares of annuities payable out of any public revenue of Saorstát Eireann or out of any public revenue of Great Britain or of Northern Ireland or of Great Britain and Northern Ireland.
Question put and agreed to.
SECTION 9.
The powers and duties of assessing and charging Income Tax in relation to offices and employments of profit in either House of the Oireachtas or in any Court or public department or office heretofore exercised and performed by commissioners specially appointed under Section 69 of the Income Tax Act, 1918, shall, save as is hereinafter authorised, henceforth be exercised and performed by the Commissioners for the special purposes of the Income Tax Acts (hereinafter referred to as "Special Commissioners") and every mention or reference contained in any statute of or to Commissioners specially appointed under the said Section 69 shall be construed and take effect as a mention of or reference to the Special Commissioners.
(2) The powers and duties in relation to income tax heretofore exercised and performed by assessors in any court or office for which Commissioners were specially appointed under Section 69 of the Income Tax Act, 1918, shall, save as is hereinafter authorised, henceforth be exercised and performed by an Inspector of Taxes or other officer appointed for the purpose by the Revenue Commissioners, and every mention or reference contained in any statute of or to the assessors aforesaid shall be construed and take effect as a mention of or reference to the Inspector of Taxes or other officer so appointed as aforesaid.
(3) If the Minister of Finance shall determine that, by reason of special circumstances existing in any particular public office, it is not expedient that the powers and duties mentioned in the foregoing sub-sections or any one or more of such powers and duties should be exercised and performed in relation to that office by the officers to whom the same are hereinbefore transferred, the Revenue Commissioners shall appoint such officers or persons as shall be approved of by the Minister of Finance to exercise such powers and duties in relation to that office.
(4) Sections 69 and 117 of the Income Tax Act, 1918, so far as the same are inconsistent with the provisions of this section shall cease to have effect.
I beg to move to insert, before Section 9, a new Section as follows:—
"Exemption shall be granted from tax for the year beginning on the 6th day of April, 1923, under Schedule C of the Income Tax Act, 1918, in respect of any interest, annuities, dividends or shares of annuities, and from tax for the same year under Schedule D of the same Act in respect of any yearly interest or other annual payment, forming part of the income of any body of persons or trust established in Great Britain or Northern Ireland before the 6th day of April, 1923, for charitable purposes only, or which, according to the rules or regulations established by Act of the Parliament of the late United Kingdom of Great Britain and Ireland, charter, decree, deed of trust, or will, are applicable to charitable purposes only, and so far as the same are applied to charitable purposes only, provided such interest, annuities, dividends, shares of annuities, yearly interest or other annual payment belonged to such body of persons or trust, or was subject to such rules and regulations on the 5th day of April, 1923, or arises from investments or other property which, on the 5th day of April, 1923, was held by or belonged to such body of persons or trust or was subject to such rules or regulations."
This new Section grants certain exemptions to British and Northern Ireland charities. Section 37 of the Income Tax Act of 1918 allowed exemptions to charitable bodies in respect of certain interest from investments in so far as such interest was applied to charitable purposes only. In the absence of special legislation this exemption from British income tax would not have been applicable to Saorstát Eireann charities subsequent to the year 1922-23. Section 13 of the British Finance Bill for the current year continues this exemption for the year 1923-24 in respect of investments held by Saorstát Eireann charitable bodies on the 5th of April, 1923. The amendment now proposed is designed to give reciprocal treatment with regard to Saorstát Eireann income tax to charities established in Great Britain and Northern Ireland. It is purely a reciprocal arrangement which will exist for one year only, and will enable investors in the meantime to make whatever other arrangements they may think well to make.
Amendment put and agreed to.
I beg to move a further amendment to insert, before Section 9, a new Section as follows:—
"(1) When any interest, dividends, or other annual payments payable out of any public revenue other than that of Saorstát Eireann, or in respect of the stocks, funds, shares or securities of any foreign company, society, adventure or concern, are entrusted to any person in Saorstát Eireann for payment to any person in Saorstát Eireann, the Revenue Commissioners shall have power to relieve the person so entrusted with payment from the obligation to pay the tax thereon imposed on him by No. 1 of the Rules applicable to Schedule C, and by No. 7 of the Miscellaneous Rules applicable to Schedule D, of the Income Tax Act, 1918.
(2) When granting the relief aforesaid the Revenue Commissioners shall have power to prescribe any conditions which may appear to them to be necessary to ensure the assessment and payment of any tax assessable and payable in respect of such interest, dividends or other annual payments under the provisions of the Income Tax Act, 1918, and the Acts continuing and amending the same.
(3) A letter signed by the Secretary or Assistant Secretary of the Revenue Commissioners, or the publication of a notice to that effect in the Iris Oifigiúil stating that the Revenue Commissioners have exercised all or any of the powers hereby conferred on them, shall be sufficient evidence that they have done so.
(4) When, under the powers conferred on the Revenue Commissioners by this Section, the person entrusted with the payment of the interest, dividends, or other annual payments is relieved from payment of the tax thereon, the said tax shall be assessable and chargeable under the appropriate case of Schedule D, on, and shall be payable by the person entitled to receive, such interest, dividends, or other annual payments.
(5) There shall be added to Rule 1 of the Rules as to interest, dividends and other annual payments, with the payment of which persons other than the Bank of England, the Bank of Ireland, and the National Debt Commissioners are entrusted under Schedule C of the Income Tax Act, 1918, the following words:—
`The aforesaid accounts shall distinguish the separate accounts of each of the persons entitled to receive such dividends, and state the name and address of each of such persons, and give particulars of the amounts payable and of the public revenue out of which each separate amount is payable.'
(6) Rule 7 of the Miscellaneous Rules applicable to Schedule D of the Income Tax Act, 1918, shall at all times hereafter be read as if at the time of the enactment of the said Rule 7 the addition made by the foregoing Sub-section had been made to Rule 1 of the Rules as to interest, dividends, or other annual payments, with payment of which persons other than the Bank of England, the Bank of Ireland, and the National Debt Commissioners are entrusted."
Under the existing law the duty of deducting income tax is thrown on every person entrusted with the payment of (a) any dividends which are payable out of any public revenue other than that of Saorstát Eireann, and (b) interest, dividends, etc., payable out of, or in respect of, stocks, funds, shares or securities of any foreign or colonial company, society, etc. The persons entrusted with payment within the meaning of the Income Tax Act are chiefly bankers and coupon dealers. If the existing law is applied exactly as it stands the effect will be that persons in receipt of dividends from British and Northern Ireland Limited Liability Companies will receive their dividends less a deduction of at least 7s. 3d. in the £, i.e. 4s. 6d. British tax will be deducted by the Secretary or other officer of the company by whom the dividends are paid, and at least 2s. 9d. Saorstát Eireann income tax will fall to be deducted by bankers in the Free State through whom dividend warrants are presented for encashment. The object of the new Section is to enable the Revenue Commissioners to make arrangements with bankers by which the latter will not be obliged to deduct Saorstát Eireann tax, but instead will render particulars of the dividends from which tax would in the ordinary course have been deducted, so that the recipients may be dealt with by direct assessment. Bankers generally are in favour of this proposal.
I desire to say that I am very glad this new Section has been introduced. A gentleman came to me to-day to say that he went to one of the city banks yesterday with a dividend warrant from a Scottish Bank. As soon as he presented the warrant the banker said to him: "I am sorry, I will have to take 2s. 9d. in the £ more from this dividend." The gentleman said to the banker that the Income Tax had already been paid. The banker replied that that made no matter, as the banks here had instructions from the Government to take 2s. 9d. in the £ from all such dividend warrants presented to the bank. The gentleman took up the warrant and put it in his pocket, and came to me with it to-day. He asked me to find out the reason why there was this further deduction of 2s. 9d. in the £. He said if such a regulation was going to be carried out that he would at once open a banking account in England. He seemed appalled at the idea that he would have to pay 7s. 3d. in the £, even though there was a chance of getting some of it back. He said to the banker: "What will happen?" The banker replied that he should make application to get a refund of the money. He then asked when he would get the refund, and the banker replied: "I do not know, perhaps you will never get it." The gentleman got into a very serious state of mind, and approached me about the matter this morning. I may say that I am very pleased indeed that this new Section is being put in.
Amendment put and agreed to.
I beg to move that these two new Sections stand part of the Bill.
Question put and agreed to.
Motion made and question put: "That Section 9 stand part of the Bill."
Agreed.
SECTION 10.
(1) Section 27 of the Finance Act, 1920, and Section 28 of the Finance Act, 1921 (which relate to relief in the United Kingdom from Dominion Income Tax), shall be construed and take effect as if
(a) the words "Saorstát Eireann" were substituted for the words "United Kingdom" wherever those words occur in either of the said sections, and
(b) the words "Great Britain and Northern Ireland" were substituted for the word "Dominion" wherever that word occurs in either of the said sections.
(2) The said Section 27 of the Finance Act, 1920, and Section 28 of the Finance Act, 1921, as adapted by the foregoing Sub-section shall have effect subject to the provisions of any Order already made or hereafter to be made by the Governor-General of the Irish Free State on the advice of the Executive Council of Saorstát Eireann under the Double Taxation (Relief) Act, 1923 (No. 8 of 1923), and in the event of any conflict between the provisions of the said Sections 27 and 28 or either of them and the provisions of any such Order as aforesaid, the provisions of such Order shall prevail.
(3) In the application to Saorstát Eireann of any Act of the Parliament of the late United Kingdom of Great Britain and Ireland which relates to income tax or to which the Income Tax Acts are applied, the expressions "foreign,""foreign state" and "abroad" shall respectively be construed as including all places outside Saorstát Eireann or outside the area which is now comprised in Saorstát Eireann as the case may require.
(4) For the purpose of computing the average mentioned in Rule 1 of the Rules applicable to Case 5 in Schedule D of the Income Tax Act, 1918, Great Britain and Northern Ireland shall be deemed to have been outside Saorstát Eireann during the whole of the three years included in such average.
(5) Rule 2 of the Rules applicable to Case IV. in Schedule D of the Income Tax Act, 1918, shall be construed and take effect as if the expression "citizen of "Saorstát Eireann" was substituted for the expression "British subject."
(6) Rule 7 of the General Rules of Schedules A, B, C, D, and E of the Income Tax Act, 1918, shall be construed and take effect as if
(a) the expression "citizen of Saorstát Eireann" was substituted for the expression "British subject," and
(b) the words "Saorstát Eireann" were substituted for the words "British, Indian, Dominion or Colonial."
(7) The provisions of Section 23 of the Inland Revenue Regulation Act, 1890 (which relates to the issue and service of writs of subpoena and other processes), shall apply as between Saorstát Eireann and Great Britain, and as between Saorstát Eireann and Northern Ireland in the same manner as such provisions applied as between the different parts of the late United Kingdom of Great Britain and Ireland previous to the establishment of Saorstát Eireann.
Amendment (3) is already covered by a general decision reached in the beginning.
I beg to move an amendment to delete Sub-section 7. This Sub-section is not necessary. What is proposed to be done by it can be done by Order in Council.
Amendment put and agreed to.
That also disposes of the next amendment in the name of Deputy Johnson.
Motion made and question put: "That Section 10, as amended, stand part of the Bill."
Agreed.
SECTION 11.
(1) The Customs Duty at the rate of eightpence the pound as now payable on tea imported into Saorstát Eireann shall continue to be charged, levied and paid on all tea imported into Saorstát Eireann until the 1st day of August, 1924.
(2) The provisions of Section 8 of the Finance Act, 1919, shall apply to the duty mentioned in this section with the substitution of the expression "Saorstát Eireann" for the expression "Great Britain and Ireland."
I beg to move an amendment to this Section. In Sub-section (1) to insert after the word "shall" and before the word "continue" the words "be reduced to the rate of sixpence per pound and as so reduced shall."
I do not think it is necessary to say very much on this particular amendment, as the subject was very fully discussed when the Finance resolutions were before the Dáil. I think a very good case was then made out for this reduction. As far as I can see no attempt is made in this Bill to ease the burden of taxation on the poor. This is an item that hits the poor harder than any other section of the community. I put it forward now with the object of giving the Ministry a chance of coming up to the scratch, as they did not see their way to do on the Financial Resolution.
took the Chair at this stage.
I take it, sir, that the Deputy is not keenly interested in pressing this amendment. There does not seem to have been any response from the other members of the Party in support of it, and I think the interests of the persons for whom the case is made are not really affected as seriously as the Deputy would suggest. The actual amount of relief that would be afforded by the passing of this amendment would amount to something like 1½d. per lb. on the price of tea. The one-sixth is allowed off by reason of the fact that the preferential rates in respect of teas coming from particular countries operate, as far as 8d. per lb. is concerned, in the price of Indian and other teas like that, and I think that the precise amount per family was dealt with by me on the last occasion on which this particular amendment was moved. Ordinarily I expect that the families of the persons on whose behalf the Deputy made his case for a reduction would be affected to the extent of, possibly, a farthing per day, and the loss to the revenue would be very considerable. It is not an expensive tax; it does not cost proportionately as much money to collect as other taxes, and it affords every section of the community an opportunity of contributing in some way to the revenues of the State. If it were proposed to relieve the persons mentioned by the Deputy it might be urged in the future that, as far as they were concerned, they made no contributions towards the revenue of the State, because a case would ultimately be made for relief from all forms of taxation for that particular order, and I do not think that they would themselves welcome such an ostracisation, if I might say so, from the other contributing parties to affording sufficient revenue to allow us to run the State. In this case the amount involved is considerable as far as the revenue is concerned, and the relief infinitesimal. The most ardent tea drinker that I have ever come across has never raised any particular objection to the tax imposed on tea. Deputies beyond, I should say, if you were to question them very closely, would admit that it was an article of diet which cannot be very well recommended, and, if we reverted to commodities used in this country before the introduction of tea, that it would be in the interest of persons affected who would consume these particular things.
Whiskey.
I do not mean whiskey. One must have a remarkably cool head, like Deputy Figgis, to appreciate the advantages of whiskey, and I am sure that he enjoys paying the high tax that there is on whiskey when its quality is up to the mark. The same thing prevails with regard to tea. If the quality is good the tax does not matter. There was a reduction of 4d. per lb. on tea last year. That was a considerable reduction, and I do not think it would be wise just now to alter one particular tax and not consider the others. A case was made here for the reduction of Income Tax, and one of the reasons that we could urge as to why it should not be reduced was that no corresponding reduction was made in respect of any other service. Now, the members opposite will appreciate this fact, that sixpence in the £ extra in Income Tax is a pretty considerable sum on the particular order affected by that particular tax, and it presses more heavily on that class than the twopence per pound on tea which is proposed to be reduced here does affect the particular class they are interested in. It would be unwise, I think, to disturb the existing incidence of taxation without reviewing the whole of the taxation code, and for these reasons I am not prepared to agree to a reduction of the tax on tea.
The Minister has rather suggested a line on which he could make improvement in the Bill. He suggested that those who consume the cheaper qualities of tea ought to be taxed at a less rate per lb.
I do not think I said that.
No, he did not say that, but he suggested that those who were getting good tea and paying a high price for it would not object to eight-pence as against the proposed sixpence. But those who are not now paying so high a price for tea, because they are not able to, might well be relieved of some of the burden of taxation. The point about the tea tax is, of course, that the people who are least able to pay taxes are obliged to buy at just as high a rate per pound as those who are better able to pay, and that the consumption of tea amongst this poorer class is higher per head than amongst the wealthier. The statement of the Minister that the Income Tax payers are harder hit by virtue of the sixpence difference as between British and Irish Income Taxes than the poor, who pay their taxes through the ordinary commodities, is one that we cannot accept. It cannot be contended, surely, that you are going to ask the people to eat into their margin of subsistence for the purpose of paying a tax, and then say that they are not more hardly taxed than the wealthier, who simply have to curtail their luxuries. We would argue that these taxes on the daily consumption of what are practically the necessities of life ought to be reduced, and that this proposal to reduce the tea tax by twopence would be an earnest of the intention of the Dáil to relieve the taxes on the necessities of life for the average poor family in the country.
Amendment put.
The Dáil divided: Tá, 14; níl, 37.
Tá
- Tomás de Nógla.
- Riobárd Ó Deaghaidh.
- Darghal Figes.
- Tomás Mac Eoin.
- Liam Ó Briain.
- Tomás Ó Conaill.
- Aodh O Cúlacháin.
- Séamus Eabhróid.
- Seán Ó Laidhin.
- Cathal Ó Seanáin.
- Seán Buitléir.
- Domhnall Ó Muirgheasa.
- Risteárd Mac Fheorais.
- Domhnall Ó Ceallacháin.
Níl
- Liam T. Mac Cosgair.
- Uáitéar Mac Cumhaill.
- Seán Ó Maolruaidh.
- Mícheál O hAonghusa.
- Liam de Róiste.
- Séamus Breathnach.
- Pádraig Mag Ualghairg.
- Peadar Mac a' Bháird.
- Seán O Ruanaidh.
- Mícheál de Duram.
- Ailfrid O Broin.
- Pilib Mac Cosgair.
- Domhnall Mac Cárthaigh.
- Maolmhuire Mac Eochadha.
- Earnán Altún.
- Sir Séamus Craig, Ridíre, M.D.
- Gearóid Mac Giobúin, K.C.
- Liam Thrift.
- Pádraig O hOgáin.
- Seosamh Ó Faoileacháin.
- Seoirse Mac Niocaill.
- Piaras Béaslaí.
- Séamus Ó Cruadhlaoich.
- Criostóir Ó Broin.
- Caoimhghin O hUigin.
- Próinsias Bulfin.
- Séamus Ó Dóláin.
- Aindriu Ó Láimhín.
- Eamon O Dúgáin.
- Peadar O hAodha.
- Séamus Ó Murchadha.
- Seosamh Mac Giolla Bhrighde.
- Liam Mac Sioghaird.
- Tomás Ó Domhnaill.
- Earnán de Blaghd.
- Uinseann de Faoite.
- Séamus de Burca.
Amendment declared lost.
Before you put Section 11 I think I should be in order in very briefly drawing your attention to a point which has accidentally come under my notice, I would like to draw the Minister's attention to it. It is a small point from the point of view of revenue, but it is a very important point, however, in connection with trade in Saorstát Eireann. I understand that tea samples coming into the Free State have to pay a second 8d. tax per pound. I do not know how the matter can be raised, but probably it can be raised in the form of a rebate in Great Britain for tea going out of the country. If it is the case it is likely to affect the tea trade in Southern Ireland very adversely as against Northern Ireland. I think that and the delay in delivering samples of tea owing to this fiscal tax is a matter of great importance for the trade, and I just draw the attention of the Minister to this matter.
I have not heard any previous complaint about that, but I will undertake to look into it. I probably will have some information for the Deputy on that point.
Motion made and question put: "That Section 11 stand part of the Bill."
Agreed.
SECTION 12.
(1) The additional duties on dried fruits which were first imposed by Section 8 of the Finance (No. 2) Act, 1915, and are now payable in Saorstát Eireann, shall continue to be charged, levied and paid up to the 1st day of August, 1924.
(2) The new import duties which were first imposed by Section 12 of the Finance (No. 2) Act, 1915, and are now payable in Saorstát Eireann, shall continue to be charged, levied and paid up to the 1st day of May, 1924.
(3) The provisions of Section 8 of the Finance Act, 1919, shall apply to the duties mentioined in this section with the substitution of the expression "Saorstát Eireann" for the expression "Great Britain and Ireland."
In Sub-section 2 we have notified to us that the new import duties which were first imposed by the Finance Act (2) will continue. I take it that it is under this Act—the Act of 1915 —that these various duties upon opera glasses, motor cars, films, etc., are levied. I want to ask the Minister whether he has considered the effect of this tax on the motor car industry, or on the motor parts industry in Cork? I understand that there is a very great danger that the Ford factory there will reduce to a great extent its output by virtue of this tax, and I would like the Minister to make some statement as to the views of the Government respecting the loss of that business, and the loss of that industry, if it is to be lost or detrimentally affected to any degree by the continuance of this tax in its present form. There is another consideration that, I think, comes possibly under this section, but I am not sure. I am referring to the prohibition on the importation of all dye stuffs from Germany. By virtue of one or other of these War Acts, and for the purpose of assisting British dyes, German dyes have been prohibited. They are prohibited from importation into the Saorstát. Why that should be so no explanation has been given, and it is undoubtedly detrimental to the interests of the Saorstát that users of dyes must import their material from England. We have a daily exhibition of the necessity for having fast dyes for use in this country. There has been made popular a certain flag. One was led to believe that the colours were green, white and orange, but, judging from the exhibition we have, it is sometimes an anaemic yellow instead of orange, and a very thin green, within a month turning white. That, I think, is all because of the use of British dyes instead of German dyes. There is a more important reason why German imported dyes should be encouraged from Germany—because they are good, and because there could be a valuable industry created, or, I should say, assisted, by the use of good dyes as contrasted with bad and ineffective dyes. The linen trade, for instance, is developing in the direction of dyed fabrics. A very considerable number of linen pieces are being dyed in one form or another to-day, as compared with recent years, and the linen manufacturers would very much desire to have fast German dyes if they could get them. Let us encourage the importation of good dyes from Germany into the Saorstát. They are of very small compass, and I am sure we could find ways and means of supplying the Northern manufacturers with German dyes at lower prices and of better quality than they are able to buy from England. There is no good reason why the prohibition should continue of synthetic dyes from Germany. I am assuming that it is under this Finance Act (2) that these dyes are prohibited. Perhaps I am wrong. But the Minister can correct me when he makes his explanation. I hope he will make his explanation first, before saying I am out of order. Since the introduction of the Finance Resolutions, and such discussions as took place upon those Resolutions, the Ministry has had time to consider the effect of these duties upon Irish industries. We have the effect upon the motor car industry, and the effect of the importation of completed cars or chassis; the effect upon a distillery which has been for a long time back making yeast and exporting industrial spirit. We have a number of other industries that have been affected and will be affected by the change, or by the continuation of these duties and the change in the relation between the two countries. I think it is due to the Dáil and the country that the Ministry should give us some explanation or some enlightenment as to the effect of these taxes upon these industries, and whether they have any intention of modifying their programme, having regard to the effect that is being created. Some, no doubt, have been benefited. Some undoubtedly have been hurt very seriously; and it is not too late to amend this Bill with a view to removing the damage and making provision for benefit. I am sure Deputies from the districts affected, who have more intimate knowledge of the effects of these duties upon the industries concerned, will be able to assist the Minister to come to a decision.
I was not aware that it was under the Clauses of the Finance Act that this whole question of taxation would be raised. Apparently, from the remarks of Deputy Johnson, the Dáil is at liberty to discuss certain aspects of the import duties so far as they affect finance. I presume that at this stage we can hardly discuss all the effects of the British Safeguarding of Industries Act, which is the Act that, I think, covers the case of the German dyes. The only point I want to make at the moment is in regard to what has been referred to by Deputy Johnson, namely, the case of the Ford Industry at Cork. It is going to be a very serious matter if the effect of the carrying of the Finance Bill here, containing a particular clause governing the duties on motor parts, will be the closing down of the Ford industry in Cork city. At the present time there are some two thousand persons employed there, and from information at my disposal, it seems that there is every likelihood, unless some arrangement, perhaps a reciprocal arrangement, is made between our Ministry and the Ford organisation—I think they urged previously some such arrangement—it will mean the closing down of the industry. Therefore, at this stage, all I wish to do is to urge on the Ministry to consider very carefully the question of a tax upon motor parts, and to give serious consideration to the effect it will have in Cork City if it should be the means of closing down the Ford industry there. I am aware that Mr. Ford is quite sympathetic to this Government and to the Saorstát and does not wish to do anything which would interfere with the Ministry at the present time. At the same time, as it is purely a business arrangement, there is a great danger, judging by the most recent information we have, that under the operation of this tax the industry will have to close. I would urge the Ministry to consider the matter very carefully.
I wish to support the remarks of the last Deputy in regard to the Ford industry in Cork. At present there are two thousand people employed there, the wages average about £2,000 a day, and the amount of material turned out daily averages £6,000. The bulk of the material turned out is composed of finished parts of motors and partly-finished engines for Ford cars. These are exported to England. The work done in Cork is largely done for the English market. The finished parts and the practically finished engines are subject to a tax of 22½ per cent. entering England and when they come back to Ireland again as finished cars they are again subject to a tax of 33? per cent. That means practically a double tax on the industry. It will amount, I suppose, to half a million a year extra tax on the Cork industry. Big as the industry is, it will hardly stand that tax, and that will mean the closing of the industry. What has already begun will be completed, and by that I mean the taking of the industry altogether to Manchester. Already 16 machines have been removed to Manchester, and the men who worked them are gone with them. That, I say, is the beginning of the removal of the business. Its removal would mean a big loss to Cork and to the Saorstát. With Deputy de Roiste, I would urge upon the Ministry to give consideration to this matter and to arrange, if possible, that the extra tax on this industry, which is one of the very few we have in Cork, and one of few, in regard to magnitude, that we have in Ireland, does not become oppressive or in any way falls heavily upon the firm. I would urge, also, that the double tax on engines and motor parts should be obviated as far as possible.
Acting on the assumption taken by Deputy Johnson, that behind these paragraphs was embodied the particular Finance Act by which England took, a short time ago, an entirely new line of policy——
That is not the case.
Well, if we could have been favoured and honoured with an introduction when these Sections were moved, and if they were explained to us, as I imagine such is more or less the responsibility and duty of the Minister bringing them before the Dáil, Deputy Johnson might have been saved a false assumption. In any case, if it is not in this section that that particular Finance Act is continued, and seeing it is continued under the Finance Bill, perhaps the Minister, before I proceed, will let me know under which section it is continued.
I did not like to intervene while Deputies were showing their form upon particular subjects. I may now say that the Finance Act referred to has nothing whatever to do with this particular Section. This particular Section deals with an Act passed in 1915, and refers merely to the continuance of certain Customs duties. It has nothing whatever to do with the subjects mentioned in the course of the discussion. It was not my duty to draw attention to that so long as a matter was in dispute that was of very great interest, Having said so much, I suppose I would be out of order now if I were to continue the discussion.
What is meant, then, by the new import duties which were first imposed by Section 12 of the Finance Act (part 2) of 1915?
The duty on dried fruits, etc.
I believe that the very matter to which reference has been made and upon which the debate has so far been carried on was Section 13, Sub-section 2, under which these provisions are taken without specific mention. Hearing the discussion on Section 12 without correction from anybody I thought I was correct in my assumption. Am I correct in assuming that?
I think it would be an impertinence for me to infringe on the duties of the Chair.
I have asked you, Sir, for a ruling as to whether the matters that ought to be raised can be discussed under Section 13, Sub-section 2?
The Deputy must understand that we have first to dispose of Section 12 before we can discuss Section 13.
Question put: "That Section 12 stand part of the Bill."
Agreed.
SECTION 13.
(1) The several taxes and duties specified in the First Schedule to this Act shall, until the Oireachtas shall enact to the contrary, and subject to the existing statutory provisions as to drawbacks, repayments and allowances, continue to be charged, levied, raised, imposed and paid in Saorstát Eireann.
(2) The several statutory and other provisions which were in force on the 31st day of March, 1923, in Saorstát Eireann in relation to the said taxes and duties respectively shall, subject to the adaptations and modifications already made or hereafter to be made in such provisions by or under the Adaptation of Enactments Act, 1922 (No. 2 of 1922), apply to the taxes and duties aforesaid until the Oireachtas shall enact to the contrary.
(3) The provisions of Section 8 of the Finance Act, 1919, shall continue to apply to such of the taxes and duties mentioned in this Section as the same applied to on the 31st day of March, 1923, but with the substitution in that Section of the expression "Saorstát Eireann" for the expression "Great Britain and Ireland."
I desire to propose the following amendment:—
"In Sub-section (1) to insert after `allowances' in line 4 the words `and subject also to a reduction to the duty of Customs upon sugar by nine shillings and fourpence per hundredweight.' "
This amendment tends to reduce the Customs duty on sugar by nine and fourpence per hundredweight, or one penny per lb. On a previous occasion the Minister suggested that the amount so saved would be so small it would not be worth while making a change. Mr. Wilson also suggested on a previous occasion that he would be willing to support the amendment if the entire amount of duty on sugar was knocked off. If the Minister has not changed his opinion since, I desire to point out that the people on whose behalf the amendment has been inserted think more about 2d. or 3d. than some Deputies here would give them credit for. It is suggested that 2d. a week would mean nothing to a poor person, and that such a person would consider it an insult if it was suggested that, for the sake of a few pence a week, he was not giving his full quota to the upkeep of the State. I know that there are people in Dublin who think so much of the saving of a few pence that they walk a mile or a mile and a quarter out of their usual road to get bread at ¼d. less than the general price. They will go to a place like Farrington's in Wexford Street, where the 2lb. loaf can be got at a farthing less than in the ordinary retail shop. People are so badly circumstanced and so anxious to save even a few pence that they would be very pleased to get a saving of even 1d. a lb. on sugar. I urge the acceptance of the amendment upon the Minister for Finance.
I wish to support this amendment, because I think it is very necessary. Probably the President, before he answers me, will dip his pen or pencil into the sugar basin in order that he may be able to draw the Dáil with the sweetness of his words. As Deputy Nagle has pointed out, one penny in the week may mean a great deal to the home to which this amendment is intended to apply. I think it is necessary that every home within the twenty-six counties—the little bit of country that is left to us— should benefit by this amendment. If there were a reduction of 1d. a lb. in sugar it would mean a saving of 1s. 2d. a week in a family, say, of ten with a father and mother—it takes 14 lbs. of sugar to supply such a family. Such a family taking 6 lbs. of jam per week would save 6d. For the workman indulging in the wonderful luxury of a pint of Guinness it may mean a saving of ½d. a pint; while the man enjoying the luxury of a piece of currant cake for his tea would save 2d. All that would total up to a weekly saving of 2s. 4½d. That would be a saving to the worker and also to the taxpayers and ratepayers, and especially to those people we have heard so much about—the payers of Income Tax. The Minister said a few days ago that he would create laws which would easily extract money from the ratepayers pockets without their feeling it. Now, I want him to put something into their pockets, so that when it comes to be extracted it will be there for him. If the Dáil accepts this amendment it will be no great loss to the Exchequer. As already pointed out, the amount gained on the duty on sugar would not go to pay the salaries of the Senators or the Deputies. If it were possible for this State to lose £2,000 in the transaction that those three and a half million people were going to benefit by, I ask the Dáil to remember that that £2,000 will not be thrown away foolishly. Consequently I hope that the Minister for Finance will accept this amendment. Above all things, if the Minister for Finance exercises his usual good-humoured bluff and tries to influence the Dáil with the wit and humour of his speech, I hope the Dáil will not be influenced by him.
LIAM de ROISTE
I desire to support this amendment. I have been convinced that the duy on sugar has been entirely too high, and I think that the Minister for Finance would be well advised in this case to accept some reduction. It is not the quantity of sugar used in the home that should influence him at all. It is the fact that the sugar is a raw material for industries like jam-making, condensed milk and so on, and even though a farthing in the pound instead of a penny in the pound is a very small reduction yet you are giving an opportunity at the present time to industries like condensed milk, jam-making, etc. You are giving them an impetus in such a manner that they will be able to compete with similar materials coming into the country. It is for that reason— to assist industries of which sugar is the raw material—that I support the amendment, although the amount may seem too large for the Minister for Finance to swallow.
I agree with the arguments put forward to show that too much taxation is imposed on the poor man's table; but though I am of that opinion, I am not in favour of urging the Minister to make any fiscal changes until he is able to recast the entire system of taxation. When we took over the Government of this country we had to take over a system of taxation that was not suitable for Ireland, but for a nation differently situated altogether. Therefore the system of taxation we took over would not suit an agricultural country like Ireland. I see that between sugar and tobacco there is a Customs revenue of six millions. That is a tremendous impost—about one-quarter of the entire taxation. I see that the Irish milling industry is in a bad way, and it was suggested that a tax on foreign flour and grain to produce that six millions would not leave the breakfast table any dearer or make any further inroads on the poor man's table than is made at the present time, while it would leave an industry at present in danger of being wiped out in such a position that it would be able to get on its feet again. I think we should wait, because all those Customs duties react upon one another. If a change were made without fully going into the matter, we might do more harm than good. With regard to the Customs duty on sugar, I am in favour of a reduction in that. The Government should encourage the growth of beet in this country. In England, in the counties of Norfolk and Suffolk, a successful beet industry has been established, and the farmers are growing thousands of acres of beet and making their own sugar. The Department of Agriculture inquired into Irish beet, and we are assured that there is more sugar in Irish beet than in any other beet. Therefore, I would oppose the reduction of the Customs on sugar until we go more fully into the matter. I know the average man who pays taxes, Customs and Excise, tries to contribute to the State, but I doubt if he is so greedy to share in that honour that he would not forgive the Government if they lightened a little of the Customs on sugar. They would find that the Customs duty on sugar, tea, and tobacco, and the Excise duty on beer, spirits, and entertainments, most of which is paid by the poor man in the street, makes a total of sixteen millions. That sixteen millions is raised under the income tax level, and what is raised above the income tax level cannot compare with that. I have not much sympathy with the taxation raised above that level. It escapes wery well, I think. I am in favour of the arguments against the heavy tax of those necessaries but I entirely agree with the action of the Government in not altering those taxes until a full and complete inquiry is made into all their implications.
It seems to me the argument about taxing the workingman is an argument that can very easily be over-stated. You may afford some relief by altering the incidence of taxation, but it would be slight. The workingman will have to pay his share in the system of taxation that exists no matter who has to pay directly, and whether the taxation is by way of Income Tax or taxation on sugar, it certainly will not, in the long run, make any very great difference. I think that is a matter that can hardly be disputed. The argument that Deputy de Roiste used in favour of reducing the tax on sugar, was one that frankly surprised me, because I had thought that Deputy de Roiste would not have intervened in the debate without thinking a little over what he was going to say and saying something that would have substance in it. As a matter of fact, the reduction of the tax would be of no assistance at all to the industries that he mentions. It would not facilitate them in any way. Jam coming into the country from outside is taxed on its sugar content, so that if the taxation on the sugar used by the Irish jam-maker was reduced, the price of the foreign jam coming in would also be reduced, because the taxation on the sugar contained in it would be reduced. On the other hand, if the Irish jam-maker had any export trade, he would get a draw-back of the amount of duty paid on the sugar content in the jam, so that to make the change would not have the slightest effect, and Deputy de Roiste, who intervened in the interest of the manufacturers, apparently knows nothing about that particular business.
I was very much impressed by the case made by Deputy Lyons and his friends about this particular tax. Of course the case that he instances of a man and his wife and ten children would be the most extreme case. I was so much impressed that I was thinking of considering the point, but I find that the amount involved is £800,000, possibly even £1,000,000, and I am sure that the Deputy, knowing that, would not press for such a reduction as is contemplated in this case. It is not money that you have got to give away. We have a very considerable sum to borrow in order to enable us to carry on the business of the year, and this would mean another £800,000, or possibly £1,000,000, so that next year you would have to tax these ten children and that man and his wife with double this duty in order to bring that back. The contemplation of that would be very serious.
I guarantee you do not tax that man.
The question is how far it would be likely to meet such a case as the Deputy has instanced. I know that the amount of sugar consumed in the way he has suggested does not compare in proportion to the quantity of sugar which is consumed as a luxury, and I know, furthermore, that there is a type of person in this country —I think he is called a bachelor—who attends certain colleges in the evening, and there, with serious damage to his own health, on certain occasions contributes very largely to the revenues of the State by the number of particular libations that he takes. There are others who do not contribute to the State in that respect, but who eat sweets, sugar candy, confectionery and other things like that, but who never attend the colleges I have mentioned, and who do not contribute towards the revenues of the State. The Deputy's amendment would have the effect of relieving that particular type from any contribution towards the revenues of the State, and I am sure the Deputy was not considering any relief for that particular order. I have heard there are even such persons in his own Party. There are others not belonging to the tribe I have mentioned who, perhaps, attend theatres, music halls and racecourses, and bring round boxes of sweets or chocolates and present them to other people, each box bearing a revenue to the State of a considerable sum. Does the Deputy wish to relieve all these people of this particular tax? I can understand that these things are much more acceptable by reason of the fact that they cost more money. There is an old proverb, I think, which says "Easily got, easily gone." Now, if you were to make that particular activity very cheap it will not be appreciated, and I am sure the Deputy's interest in the stability of the State and social order is too great to contemplate any such catastrophe as that. The amount of sugar consumed as an absolute necessity on the breakfast table is inconsiderable, and the amount of revenue involved is too large to consider any reduction of it. It is unfortunate in this case that luxuries are so much involved with necessaries, but the amount collected on luxuries outweighs by five, six or seven times the amount, and the people that the Deputy represents will have the satisfaction of knowing that, while they are paying 2s. 4d. weekly in the most extreme case, there are other citizens paying 15s., £1 or 30s. weekly in respect of this same tax. It amounts to a very considerable sum, and it is from the luxuries that we raise the taxes. I have tasted the particular beverage the Deputy mentioned. I do not know if he managed to find any sugar in it, but certainly I did not notice it any time I tasted it. I think, even if there be a sugar tax involved, that the State really needs it at the present moment, and we would not be justified in reducing the tax by 9s. 4d. per cwt.
I agree with the Minister for Finance that it would not be fair to do this for the young gentlemen who buy expensive boxes of chocolate for the pleasure of spending a lot of money on people for whom they purchase them, but I suggest as an alternative for his consideration that he should reduce the tax on sugar to zero when it is used for domestic purposes, or as it is imported, and increase the tax on sugar in its manufactured form, such as chocolate and things like that.
That would be a very complicated performance, and I am afraid I would not be able to do it.
I thoroughly realise, as the Minister has stated, the amount of money raised by the State from the tax on sugar, and I did not at all insinuate that I wanted that amount to be saved. I say that by reducing the price of sugar by 1d. per lb. you would help many families in the 26 counties to make a living in their own country. I disagree with Deputy Nagle on this point. I say that every individual has a perfect right if he buys chocolates or sweets to get them at a reduced price. It is time the cost of living came down.
Amendment put.
The Dáil divided: Tá, 13; níl, 40.
Tá
- Tomás de Nógla.
- Riobárd O Deaghaidh.
- Liam de Róiste.
- Tomás Mac Eoin.
- Liam O Briain.
- Tomás Ó Conaill.
- Séamus Éabhróid.
- Seán Ó Laidhin.
- Cathal Ó Seanáin.
- Seán Buitléir.
- Domhnall Ó Muirgheasa.
- Risteárd Mac Fheorais.
- Domhnall Ó Ceallacháin.
Níl
- Liam T. Mac Cosgair.
- Donchadh Ó Guaire.
- Uáitéar Mac Cumhaill.
- Seán O Maolruaidh.
- Mícheál Ó hAonghusa.
- Séamus Breathnach.
- Pádraig Mag Ualghairg.
- Peadar Mac a' Bháird.
- Darghal Figes.
- Deasmhumhain Mac Gearailt.
- Seán Ó Ruanaidh.
- Mícheál de Duram.
- Pilib Mac Cosgair.
- Domhnall Mac Cárthaigh.
- Maolmhuire Mac Eochadha.
- Earnán Altún.
- Sir Séamus Craig, Ridire, M.D.
- Gearóid Mac Giobúin, K.C.
- Liam Thrift.
- Eoin Mac Néill.
- Seosamh Ó Faoileacháin.
- Seoirse Mac Niocaill.
- Piaras Béaslaí.
- Fionán Ó Loingsigh.
- Séamus Ó Cruadhlaoich.
- Criostóir Ó Broin.
- Próinsias Bulfin.
- Pádraig Mac Artáin.
- Séamus Ó Dóláin.
- Aindriú Ó Láimhín.
- Eamon Ó Dúgáin.
- Peadar Ó hAodha.
- Séamus Ó Murchadha.
- Seosamh Mac Giolla Bhrighde.
- Liam Mac Sioghaird.
- Alasdair Mac Cába.
- Tomás Ó Domhnaill.
- Earnán de Blaghd.
- Uinseann de Faoite.
- Séamus de Burca.
Amendment declared lost.
Now that the amendment has been disposed of I may say, in answer to the question raised by Deputy Figgis, it is in order under Section (13) to discuss any of the matters mentioned in the Schedule on page 9 of the Bill.
I beg to move that Section 13 stand part of the Bill.
Upon this Section there are two questions that I would like to raise. One is as to the position of the Dundalk Distillery, and the second is the position of the tobacco growers in Ireland. I have already put a question to the Minister with regard to the distillers, but I should like him to make a statement for the public information. He must have some knowledge of the exact position at the moment. There seems to be, in certain quarters, a certain want of knowledge as to what is the exact position as between the Ministry and the firm. The second question I want to raise is in connection with tobacco growing. I understand that the Ministry has informed one of the tobacco growers, Sir Nugent Everard, that "the Finance Ministry is prepared to increase the existing grant of £25 to £40 per acre actually cropped in 1923, or alternatively will sanction, in lieu of existing grants, payment of one shilling per pound of marketable tobacco actually produced in 1923, and sold, subject to the acreage being limited to sixty acres. These offers are conditional on your waiving any claim you have made to a special grant or compensation in respect of uncropped acres in 1921 or later. The condition of your existing agreement dated 23rd January, 1914, except Clause 2, will apply."
Now, that offer seems to be peculiar in some respects. Prior to this year there were a good many more acres than sixty given up to the attempt to grow tobacco for the Irish market inside Ireland. The Ministry seems to want now to limit that acreage to sixty acres. It is stated in one of the areas in which tobacco is specially grown that the Ministry's reply is an attempt to feed the dog upon a bit of his own tail. The argument is put up that if these gentlemen will sacrifice what amounts to about 1s. 1d. per pound, other growers will get 1s. per pound. There is something remarkable about that. It is better, I think, than the 9d. for 4d. by several pence. Not only that, but I am informed that there is outstanding several thousand pounds due to the growers, or would be due to the growers under the old conditions, but under these new conditions that money due for crops from 1921 and 1922, I think, would not be paid. It also seems a remarkable way to encourage the growth of Irish tobacco. It is said on behalf of the growers—I do not know whether the statement is correct or not—that originally a sum of something like seventy thousand pounds was decided by the British Government to be given for the encouragement of tobacco growing here in Ireland, and it is said on behalf of those people here in Ireland that something like forty thousand pounds is still outstanding, that it has been transferred to the Saorstát, and that it is not available for this purpose, and that, as a matter of fact, if what the growers want the Ministry of Finance to do were done, it would not really come out of the pockets of the taxpayers at all. I do not know whether that is a fact or not, and I hope that the Minister will be able to tell us whether it is or not. Now, there have been various opinions expressed upon Irish tobacco and Irish tobacco growing, but in spite of this I think the case made by the growers has a certain strength, and it does not seem fair to these people, who have made some kind of effort—no doubt they have got subsidies—that, while the Ministry is willing to increase the grant to a certain extent, it should make that increase subject to the restriction which limits the acreage, and not only acreage, but in certain directions would actually mean a loss to the growers or to certain of the growers. This is a matter that not only concerns the growers, but also the people whom the growers employ. I hope the Minister for Finance will, for the public information, make a statement on both these questions.
I am sure the Minister for Finance himself would agree—in fact, he has already agreed— that one of the difficulties at the present moment embodied in this Finance Act is that it takes over a scheme of finance adapted for England. The English Finance Acts echoed in this Finance Bill are themselves an echo of earlier English legislation drafted for English purposes only, particularly an Act to which reference has already been made—the Safeguarding of Industries Act—which arises under this Section. A large number of taxes that we have taken over have no earthly kind of applicability or application whatever to this country. They were drafted to safeguard English industries, many of which do not exist in this country at all. Not only so, but they were not adopted originally by England as taxes. Their purpose was not fundamentally or primarily a taxation purpose, but was primarily a purely protectionist purpose. We have lost their prime intention by taking them over in this country, and as a result are actually suffering a considerable amount of injury. Let me take only one case. It affects an industry that has recently died in the constituency that I represent. I am referring to the Bottle Factory that existed a short time ago at Ringsend. All that is ordinarily known as white glass—an ordinary colourless glass of the finer kind —which comes into this country is taxed because it is not English manufactured glass. The most of it is glass manufactured in Austria. Coming into this country, it is subject to tax; but in this country no glass of that sort is made, but the other kind of glass, the coarser, cruder glass, such as the glass used in bottles, and often referred to in the trade itself as black glass, comes into this country free, although there is an industry of that nature to protect in this country. So that not only is the prime intention of these Acts which we have taken over lost—the intention which this tax was intended to achieve is being lost —but it has actually been brought into this country, and is being turned into the very opposite of these intentions, and instead of helping the home nascent industries, has done them a great injury. Those who went into the figures at the time of the Ringsend Factory know that it was a very small margin that caused ultimately the extinction of that industry. If there had been, in respect of the coarser black glass, the same protection that now exists—the same taxation that now exists—in respect of the white colourless glass, that industry to-day would be existing, and would be helping to relieve the unemployment problem in this country. Here we have a case where the Safeguarding of Industries Act, which is reflected and embodied entirely in this Finance Bill, has failed entirely of its purpose, and is still helping an English industrial purpose which does not coincide with ours at all, and in fact has turned to the injury of this country. There are other matters of the same kind. Deputy Johnson referred to the question of motor cars. There is also the question of films. Deputy O'Shannon has referred to the question of tobacco. Very little tobacco is manufactured in this country—of what is known as pipe tobacco, not much. A great deal of cigarette manufacture does exist in this country, and it is increasing; but we have taken over a whole scheme of taxation which was not fundamentally or primarily a scheme of taxation at all, but fundamentally and primarily a scheme intended to protect industries in England that feared the competition of foreign industries of the same kind.
These industries do not exist here, and, consequently, without any protectionist advantage which these taxes were intended to achieve, the people who buy the commodities are to-day paying a tax to the advantage, in many cases, of the English manufacturer, and in certain cases, such as the one I have mentioned, of injury and disadvantage to this country, even to the extinction of an industry. Now, it will be said by the Minister that these things are very well recognised by him, but that there was no time to re-organise the fiscal system that this country should adopt, and that these things have been only taken over for one financial year. I hope it will be possible—and this is a definite suggestion that I throw out in this regard—that as enquiries proceed from week to week and from month to month, as more definite information comes to hand in the matter of the collection of taxes of this kind, taxes definitely arising under the Safeguarding of Industries Act, that as the Minister for Finance finds that certain of these taxes are yielding very little revenue, and are, nevertheless, doing harm, that some provision should be embodied in the Finance Bill that would enable the Minister for Finance, or the Ministers for Finance, between now and the end of this financial year, to relinquish the taxation on such commodities. I think it will be admitted that he has made out the case against wholesale revision at so early a date, but I am now suggesting that partial revision might occur without serious loss to revenue and with advantage to the sustenance of our home industries, and also with advantage to the people who are purchasing commodities which pay heavy taxes under the Safeguarding of Industries Act—which henceforward in this country deserves to be recognised and referred to as the "Safeguarding of British Industries Act"—that as these various matters are discovered from time to time, that the Minister for Finance shall take powers under this Finance Act to relinquish these as they are found to be injurious, or as they are found not to serve a useful purpose in the immediate future. I think if that were done it would help the Minister for Finance. It would not injure in any way the amount of taxation gathered, the amount of revenue earned, by the State, and it might prove, and I urge and suggest that it must surely prove, of very considerable advantage to the industries of this country that the Minister for Finance should have such powers to bring forward an amending resolution, or to get powers from the Dáil, or to get powers under the Bill that the Dáil might from time to time decide to relinquish certain of these taxes under an Act which was not intended for this country, and which is wholly unapplicable to the economic conditions of this country.
I suggest that the Minister might consider the advisagility of remitting the tax on raw tobacco grown in this country, and, instead of giving grants to the industry, to put no levy on the raw-grown material. That would be a far better system, to my mind, than giving grants, and I understand that is the system in Australia, Canada, and in other places. I do not think that the revenue would lose very much, because the amount of tobacco grown in Ireland is very small, and if the Minister could see his way to do that, I think it would be a far cheaper way to encourage the growing of tobacco than by giving grants.
There is an item which comes under the list of Customs duties that I would like to ask the Minister to consider. I have no figures available as to the amount of revenue accruing to the State from it, but I think that it must be very small. At the same time I think this item—and I refer to the tax on scientific instruments—is one which imposes a difficulty upon what we ought to encourage rather than try to discourage. In scientific study probably lies one of our hopes, and any work in science done by educational establishments, whether schools or colleges, is probably a work which will produce some benefit to the State in the end.
Now, I quite accept what the Minister said, that it was impossible, in the time available, to go into the general question of fiscal duties, but it does seem to me that it might be worth his while to consider whether there is really any gain from this item—whether the amount received is worth its cost in collection. It certainly does impose a disability on the study of science and on the work done by educational establishments. I have not prepared any amendment on the point, as I do not think it is worth while, and I had not the figures available to enable me to form an accurate opinion. I merely suggest to him that, even for twelve months, it is hardly worth our while to continue this tax, which must be very small, and which does not, so far as I have any knowledge, have the slightest effect in encouraging any industry within the Saorstát.
Throughout the country the distillation of illicit spirits has attained enormous proportions. This illicit distillation is bound to continue as long as the tax remains as high as it is to-day; in fact, the tax is an encouragement to illicit distillation, If this tax was sufficiently reduced, I am sure the illicit distillation would come to an end in due course. At present the distilleries are running more or less on half time. A reduction of the tax would be an inducement to the distillers to resume full-time work, the export of whiskey to England and other countries would be encouraged, and the price of barley would as a consequence improve and be an inducement to the farmers to grow more tillage crops.
I, like every other member of the Dáil, I suppose, am very anxious to see whatever industries we possess flourishing and advancing, and I realise that when taxes have to be put on, or import duties of any kind, that some discrimination should be exhibited. Now, down in the County Waterford there is one factory, a cider factory, and I understand that there is a rather large tax on that commodity. I do not know if there is any other cider factory in Ireland or not, but I think that, instead of taxing a struggling industry like that, we should endeavour to foster it. That particular industry is only in its birth in the nation, and as cider is practically a teetotal drink, I suggest respectfully to the responsible Minister that that tax should be minimised, if not altogether abolished. Of course, when a tax is imposed on any commodity, to a certain extent that tax will tend to increase the cost of production, and it will tend to be an impediment, and therefore I would suggest to the responsible Minister that that tax on that struggling industry should be minimised at any rate, if not abolished altogether.
If I took down correctly what Deputy O'Shannon said, it was that he had given me notice of this question, or that he had put the question to me on the two matters that he was about to raise.
No. On one matter; the Dundalk matter.
I must say that I had no notice amongst my papers of his intention to raise the matter on the Finance Bill.
Perhaps I was misunderstood. I said I gave notice to ask a question. I did not say I gave notice I would raise it on the Finance Bill.
I have not the papers here dealing with it. I am sorry I am not in a position to give the Deputy any information whatever except from memory. It was to the effect that this particular company, and there are one or two other distilleries in the North of Ireland—Derry, I think— owned by other companies, had closed altogether. The case put to me about it was that while the disadvantage of the Customs barrier generally was rather against one particular distillery in Derry, that that particular distillery was closed. The case was put to us that by reason of the fact that they lost two pints per gallon on the output that they had to close down, because the profits would not stand such a reduction. It is one of these cases where a disadvantage arises by reason of the setting up of the Saorstát as a separate fiscal entity. However, I have not got the papers with me, and I am not in a position to give the Deputy any information on that case except from memory. On the second case, the tobacco growing industry, I also speak from memory and as far as I can recollect from the examination that I made of it I was not satisfied that it was an economic proposition. Deputy Rooney thought that it was reasonable that there should be no duty on the home-grown tobacco. Well, the amount which would be lost in revenue if we were to consider that would be very considerable.
In the raw state?
Yes, and the offer that we made to Sir Nugent Everard on behalf of the people he represented and himself was, I think, as far as we were entitled to go in the circumstances. There was a sum of something like £70,000 promised for a certain experiment, but I do not know that there was actually a fund of £70,000 set aside for the purpose of carrying out the experiment, but that it was a liability which would have to be undertaken each year for a certain number of years. The examination that I conducted—it was nontechnical and not perhaps particularly exact, just what an ordinary business man would do—did not tend to convince me that the amount of money that the State would be called upon to lose or to provide in order to enable tobacco to be grown was justified when one took into account the number of people employed, and the offer that we made, although it is not a very tempting one, was as far as we would be justified in going in the circumstances.
The adoption of the Customs duties imposed under the Safeguarding of Industries Acts has not in any way altered the position of Irish industries. I am not going to repeat, even for the purpose of giving satisfaction to Deputy Figgis, what I have already said about the subject. It may be that the articles scheduled for duty under the Act are not appropriate for this country, but that is a matter which requires very careful consideration. It is getting consideration. It must be remembered that there are certain advantages, real, useful advantages, to be derived from setting up a separate fiscal system. Wherever there are advantages in matters of that kind, I presume there are always disadvantages. It cannot be expected that we can correct and remedy all the disadvantages and at the same time partake of the advantages. It is inevitable that even with the existing Regulations and Acts dealing with this matter, there should be an improvement in our industrial activity. It may not be immediate, it may not come for many years, but the field is there, the opportunity is there, if we partake of it. I am not altogether satisfied with the claim made by Deputy Professor Thrift. Many years ago, when I was a member of a local authority, I remember that portion of their estate was occupied by people engaged in many different businesses. One of the particular businesses in question was the manufacture of some scientific instruments. I may be wrong, but I was told so at the time. I will, I think be able to give the Deputy the name of the firm. Although the sum involved in that case was small, there would certainly be no inducement for the manufacturer of such instruments if it were to be withdrawn in the same way. I very much regret it is not in my power to consider even the suggestion made by Deputy McBride. I would have to get a guarantee from him that the quantity of spirits that would be consumed would be trebled if we were to lower the duty. I do not suppose he could afford to give me such a guarantee as that. Listening to the discussion, it appeared to me that the only thing upon which there would be general agreement in the Dáil and outside it would be a tax upon the salary of the Minister for Finance. I do not know that it will be possible within twelve months to consider the whole of the fiscal question. I do not know that it would be wise to start off, as Deputy Figgis indicated we should start off, with subsidies or considerations for industries that we have got. People nowadays seem to enjoy an easy life, and there ought to be a better appreciation of industrial activity than that. There ought to be an effort made, and people ought not to be eternally looking for subsidies or help or assistance. There was a time, within the last twenty years, when there was a great industrial effort made, and people seemed to be satisfied to make the effort. Now the anxiety seems to be: "What is the State going to do—what is the Government going to do for those people?" I have no hesitation in saying that if they are not prepared to do something for themselves, the State or the Government is not going to do it for them. There must and ought to be co-operation in a matter of that kind.
If the President is basing his remarks on the assumption that I have made a claim for subsidies, he is entirely wrong. I said nothing of the kind. I have always been strongly opposed to subsidies.
I am very glad to hear that. I hope when the fiscal question is being considered, if it be considered by another Ministry than the present, that that will be the point of view from which it will be judged. The idea ought to be to see what there is interfering with industrial activity, and to remove any such interference. Manufacturers ought not to get it into their heads that the State exists for the purpose of spoonfeeding them.
I entirely agree.
To that extent many of those Acts, although they were not adopted for the purpose of suiting the particular needs of this country, are just now useful. For instance, the motor car tax does not serve any useful purpose whatever in regard to the manufacture of motor cars in this country. There is only one firm affected, and most of the work done by that firm is exported. The continuance of such an Act as that would enable persons interested in the industry to start business here or would allow some firm which has an establishment elsewhere to come in. I understand there are objections on the part of certain people to seeing such activity as that started. This is a matter which should come before a body charged and qualified to deal with such an important thing as fiscal policy. A good deal of the activity of the popular National Press for the last twenty years has been directed to drawing attention towards the necessity for improving our industries. We have now got full power to deal with that matter. It cannot be dealt with— certainly cannot be satisfactorily dealt with—in any debate here.
We require evidence, particulars, statistics to show whether or not the Free State is suitable for particular industries. I am not at all satisfied, from an examination I made of the tobacco-growing business, that that is an economic problem. I will be very well pleased to place before any Deputies interested, all the information at our disposal, and I will be surprised, when they have seen it, if they will not come to the same conclusion.
The Minister has raised two or three questions that I think ought to be a little further considered. The tobacco-growing industry has a very keen and intensive interest for a small number of people, and it ought to be borne in mind that that number of people were encouraged to undertake a great deal of liability for this agricultural experiment of tobacco-growing. When they were on the point of desisting, they were urged to continue the experiment with some kind of assurance that they would not be allowed to lose. In the case of one large grower I hope there will be no hesitation on the part of the Ministry to honour that implied promise, quite apart from any proposed increase in the subsidy for the 60 acres of growth this year. I think there ought not be any bargain suggested by the Ministry, to the effect that they will be prepared to increase the subsidy this year, provided that all the counter-claims are withdrawn. In the case of Sir Nugent Everard, so far as evidence was submitted to the Agricultural Commission, it is quite clear that he was induced and encouraged to continue his experiment and make provision for other growers in the neighbourhood, so that their tobacco would be cured. I am not prepared to argue here for the case that was made by the Deputy for Co. Dublin (Deputy Rooney). I think the cost of the entire withdrawal of the tax on home-grown tobacco would be better spent in other directions. Nevertheless, it is quite well proved that smokeable tobacco can be successfully grown in Ireland. Those who like it strong and hot can have it. There is quite a large number of people in the country who like it strong and hot. That is not the point that I want particularly to raise.
I want to support the suggestion of Deputy Figgis that it would be well if the Government in this Bill would take powers to make alterations in certain of those duties within the current year, if they found there was a satisfactory case made for such alteration. I referred in the earlier discussion to the Finance Act of 1915, and to the case of motor cars and musical instruments, etc. I am going to refer more particularly to the Depreciated Currency Duty. I want to ask if it is the intention of the Ministry to continue this exceptional barrier against goods manufactured in Germany. In the published tariff list an ad valorem duty of 33? per cent. Depreciated Currency is charged upon fabric gloves, domestic glass ware, domestic hollow ware, aluminium, etc., and incandescent gas mantles. If these are manufactured in Germany, then they are subject to this additional duty. I wonder whether it is the considered policy of the Government to specially mulct German manufactured goods, particularly when they do not come up against any Irish-manufactured goods of the same kind. I doubt very much whether it is adding in the least to the revenue. I think the value, to the Revenue, is not very great from this particular duty, and it is alienating and helping to alienate a very great industrial nation, whatever its faults may have been. I believe it is adding also to the cost of these goods to the consumers in Ireland. Incandescent gas mantles and domestic hollow ware are very commonly produced. I think it would be worth the while of the Minister to tell us, if he can, whether this Depreciated Currency duty of 33? per cent. on goods manufactured in Germany, and only on goods manufactured in Germany, is adding very greatly to the Revenue. If not, then we ought to encourage the importation of these goods from Germany, provided it is not losing anything to the Revenue. Deputy Thrift spoke of the key-industry duty on scientific instruments—the "key-industry duty" bear in mind—a duty placed upon certain articles because they affected particular industries of a special kind, influencing to a very great degree the prosperity of Great Britain.
They are not affecting any industries in Ireland. There are no key industries here. Are we to continue through this year the duty upon these goods where probably the cost of collection is going to wipe out any benefit of a financial kind? I suggest that it would be beneficial to the State if some of these goods were allowed in without the special duty. We ought to encourage the introduction of scientific instruments. Certainly we ought not to place a special duty upon a kind of instrument which is only a key in relation to British industry and which has no such value in relation to Irish industry. The Minister has spoken of the demands for spoon-feeding, and has protested against the suggestion of subsidies. I am not going to argue for subsidies, but I am going to ask the Ministry to bear this in mind when considering the fiscal question, that during the war both England and Germany so improved their technical abilities and their industrial organisation as to place them in a position infinitely better than any Irish industry is likely to be which has to undergo the ordinary process of growth. British manufacturers take advantage of what was in fact a State subsidy to improve their technical efficiency, to improve their equipment and, as a matter of fact, to build at the expense of the State new factories with entirely new and most efficient equipment. Their power to produce quickly has been multiplied considerably during the last five or six years. Irish manufacturers did not get an opportunity to do that to any great degree, and in so far as they got the opportunity, they did not take advantage of it. You are asking them now to meet that kind of competition as from scratch, and my personal conviction is that without assistance of some kind they will not be able to meet that competition effectively. The big industrial organisation, the scientific equipment, the very expensive machinery, is capable of turning out commodities in a way which it would take many years of growth and scientific development for Irish manufacturers to meet. It is not so much a case for subsidy and spoon-feeding. It is a case of helping men to meet obstacles, or, rather, removing from them present day handicaps. Had there been anything like a concurrent growth of the two countries industrially, the arguments against assistance of this kind might be good, but you are asking Irish industries to-day to start level with British industries, and unless there is some assistance given of a negative or positive character, I see no prospect of Irish industry being able to meet the competition of British, German or American manufacturers. It is not a question of wages; it is not a question of personal output; it is a question of industrial equipment and factory organisation. I think the Ministry will be well advised to consider this question from the point of view of the condition of the industries at this stage—the condition of industries in Ireland and the condition of industries in other countries —and if we are looking forward to industrial development running alongside agricultural development, there will need to be something more than a mere free fling for both parties as though they started on equal terms.
I see the Postmaster-General has just come in, and he will, no doubt, be able to take up the running for particular articles about which he expressed himself in the public Press and in response to a challenge of the President. I earnestly urge that the Government should be free to take in this Bill powers to vary the duties in respect of some of these articles which are mentioned in the excise list, especially those affected by the key industry duty and the depreciated currency duty which is aimed solely at Germany. The other articles which have been touched upon I will leave aside, but I think the Minister would be well advised to have something in hand to make a variation upon in respect of these articles mentioned.
I think the whole discussion to-day, and on previous occasions on matters dealing with this Section has shown several things, one of which is that the suggested power of variation to be given to the Ministry is very necessary. It shows, too, that the people of the country are brought to understand that fiscal independence, just like political independence, has its disadvantages as well as its benefits, and the State will have to cut its cloth accordingly. It shows also that the sooner the Fiscal Commission gets to work, and recasts the whole fiscal system, the better, but in the meantime there are going to be grave disadvantages to a great number of people. The Minister is the custodian of the public purse, and naturally he and the Revenue officials desire to make the most they can out of the situation. Take the Dundalk case; they threw out something like 150 men who are now on unemployed benefit. I wonder if the State is really gaining or losing by paying unemployment benefit to the men instead of making an effort to meet their case. I think, in the abnormal circumstances of the country at the moment, it would pay, not only in actual cash, but in other material ways, for the Ministry to consider if they could not do something in that. I think it is the same in the case of tobacco growing. Deputy Rooney made a suggestion. The Minister said it would involve considerable loss, but how much actual loss? I understand on some of those things he did not prepare figures and, perhaps, we need not expect an answer, but it would be certainly worth while to see the cost in cash to the Revenue of the State. The Minister says, from an examination of the tobacco-growing position, that he does not see it would be an economic proposition. He is very careful in the use of his words. He does not say out exactly that it would be an uneconomic proposition, and the best thing that the growers could do would be to stop the job. I am sure it was not he who gave an answer to a deputation from those people when they went to the Ministry. I understand one of them said "Are we to go back home and stop the job?" They were told "No, we shall try to meet you," and they tried to meet them in a way unsatisfactory to the people. The whole thing shows that the sooner the Ministry grapples with the whole fiscal policy the better, for in the meantime big numbers are suffering severely.
If they ask me my honest opinion, and if I were to give that honest opinion, I would say it would be better for them to stop.
I have for a long time held that the system of doles was both unwise and unsound. It was not yesterday it became a duty imposed upon me to give a considerable amount of thought to the industrial position of this country. I am not going into the question of protection and free trade now, beyond just to say, as the Minister is aware, that some of those who are known as apostles of free trade, still believe that it is equally consonant with the principles of free trade that protection should be given to nascent industries. There is no tree protected from the wind that is healthy and strong, but there are many conditions in which a tree will not get to perfection when it is a sapling, if it has not protection, and that is the principle involved in this case. If protection is unwise, as some of the Minister's remarks would suggest was his conviction, if a tax imposed primarily, not for financial, but for industrial reasons, be unwise——
I did not say that.
The Minister repudiates that. I remove then the statement from him. If such a tax be unwise when it achieves a protective purpose all the more foolish must it be when it is removed to conditions where it loses altogether the primary intention for which it has been imposed. However, that case has been made, and the only reason I rise now is to enforce what I believe to be a practical suggestion that I have put before the Minister, and that certain other Deputies have supported. I would put it now in this form. I would suggest that all the various items of this kind, whether under the Key Industries Act or the Safeguarding of Industries Act or the Currency Act, or whatever the various forms of Act be under which duties were imposed in England that have been taken over here into Ireland for conditions for which they were not originally framed, should be set down, and as the various taxes come in that the taxes should be set opposite them, from week to week and month to month. The Minister then would, in the course of a very few weeks, be able to see that certain of these were not yielding a revenue commensurate with their collection or with the harm they were doing. Take the case mentioned by Deputy Thrift. I am perfectly certain that if the Minister put down on a plain piece of paper the amount of revenue yielded from week to week by the tax on scientific instruments coming into Ireland it would be perfectly obvious to him, from the figures presented after just a very few weeks, that it was a clear case of a tax that was giving no help to this country whatever in the form of revenue, because the revenue yield was so small, whereas the injury it was doing was out of all proportion to the small benefit received. Therefore, by taking powers under this Bill for such amendments that might occur from time to time he would then be in a position to come to the Dáil and under the provisions of this first Finance Bill of the Free State, he would be able to meet the transitional period that it covers by a special provision, that need not be repeated again, by which the Dáil, by a resolution, would empower him to cease the collections on scientific instruments coming into the country in future from wherever they come, either from England or Germany. If he found that it was not necessary for him to exercise any such provision, or such power that he had assumed, there would still be no harm for that power to exist in the Finance Bill. I think it would be found necessary in several cases, and if found necessary then it could be exercised. It is plainly obvious that he has defended a good many of these taxes—if I might say so without offence, and in a spirit that he will understand—a great deal further than he might reasonably have been expected to do. I imagine that if somebody else brought forward in a Finance Bill all the taxes under the Safeguarding of Industries Act, or the Key Industries Act, and the President found himself in the position of being able to have a go at that particular Finance Bill, I think he would have made a very fine case against it, in spite of the fact that at the present moment he has made a very poor case for it.
I was sorry to hear the President, in answer to Deputy O'Shannon, say that if his private opinion was asked for by these firms he would advise them to close down.
My honest opinion, too.
Take, for example, one of those firms who employ 200 hands.
You are off the track.
One did employ 200 hands for the purpose of growing tobacco in the country, and it was through receiving a little subsidy from the State that they were able to continue keeping in employment 200 hands. They would have to close down if they were not in receipt of that subsidy and give up the growing of tobacco in the country, so that 200 people would be thrown out of employment and have to receive the out-of-work donation to the amount of £1 per week each. That would mean that in six months these people would have received £2,400. Would it not be much better for the State to subsidise the firm to the extent of £2,400 rather than so have it wasted by giving it to the employees for doing nothing? I fail to see how the Minister can say that his honest opinion was that these firms should close down. Surely we are out for industries in the country and, above all, to see that home industry is supported. I would be in favour of putting a tariff on anything coming into the country that we can manufacture ourselves. I would be prepared to support the Government in any tariff they put on manufactured goods so as to raise the standard of our manufactures until such time as the workers in Ireland can get employment.
I think the Deputy must have misunderstood what I said when I told Deputy O'Shannon that I was not satisfied that tobacco growing was an economic proposition. I may have made a mistake about the number of persons employed, but from recollection I should say that my examination showed that the subsidy amounted to something from 20 to 50 per cent. of the wages paid. I may be wrong, as they may have more people or less people included than were actually employed at it, but I am speaking from recollection and it is a couple of months ago since I went into the case. I was not satisfied that it was an economic proposition. If the case put up to us here is that we should continue such an activity as that in such circumstances I must say I would have nothing to do with it. It is not sound finance and no business man would recommend it. In considering your fiscal policy or your industrial policy you ought not to be guided by such a line as that. You must look to it from the economic point of view.
Two or three cases came under my notice recently. One was where if we got certain work done here it would cost £3,625, while to get it done in England it would cost £1,400. In another case where a particular class of work would cost £1,500 here we had a tender from Belfast for the same work for £800. Is there any justification for that? Do you mean to tell me that you would be justified in imposing a tariff to that extent in order to enable an industry here to struggle along, or stagger along? I would not approve of it, and I would not recommend it to the country. If that is the case made by industrialists for their existence here the sooner we are rid of them the better, and the sooner they realise that we are not going to tolerate that sort of nonsense the better. Under the Safeguarding of Industries Act the Minister for Industry and Commerce can order any imported goods to be scheduled if these be found to be in unfair competition with native industries. If such action be necessary this can be done by him. In any case action can be taken, action that, I think, Deputy Figgis asked for.
And the tax would be remitted in that case.
No, we are looking at it from the opposite point of view. If it be found that goods coming in here are unfair in their competition with such goods that, I think, Deputy Johnson mentioned, this would cover cases mentioned by him. As regards the case mentioned by Deputy Figgis. I am not disposed to look at it in the same way as he. I say if you are to keep the field open for possible reduction on certain articles not at present manufactured here it is unwise by reason of the fact that you only get a small amount of taxes from them to stop any chance there will be of producing these things. I do not know if I have made the case clear, but it comes to this that if there is a chance of an industry starting, that is not at present here, and that is likely to be of some use, and that the tax at present put on certain articles coming in would be likely to generate such an industry, the mere question of the tax not being remunerative ought not to be the consideration.
Do I understand the President to say that he advocates not merely protection of industries that exist, but of industries that may hereafter exist if the tax be maintained.
Certainly. It is an insignificant tax, as the Deputy stated, but if there is a likelihood of these articles being manufactured here, then it would be a pity simply to reduce the cost of them to take away the tax. That is not a matter so much for the Finance Ministry as for the Minister for Industry and Commerce, but I am used here to some extent both as Minister for Industry and Commerce and Minister for Finance. If I was Finance Minister only, I would have very little trouble in finding particular articles to tax in order to bring in revenue. As Deputy Johnson has said, one realises that other countries are in a very much more formidable position that we are industrially, and if we are to improve our industrial position we have got to take certain precautions with regard to dumping, and so on. We are not prepared to take such precautions as will bridge the difference between the two sums I have mentioned, the £1,400 and £3,625. It is quite possible that that particular subject will come up for consideration here. I am sure Deputies will agree that it was a business proposition not to tolerate such an imposition as that.
Unfortunately I missed the opening statement of the President, and also a part of Deputy Johnson's statement. I must confess that I agree generally with the later statement of the President. He has cited the case of industries, not at present existing in this country, which may be introduced later, and which may need protection. As a matter of fact, at this moment one of the Government Departments is in communication with a foreign firm with a view to encouraging it to start the manufacture of electrical instruments which run into a pretty formidable sum—approximately to two millions yearly—and which are at present not made in this country. This particular firm say: if we come to Ireland, naturally we expect to get something in the nature of protection; it may not be a tariff, but, at any rate, we must get some margin of protection from Corporations, and from Government consumers, and so on, if we are to get on our feet. That is an argument in favour of what the President has said, and it does not cut across any of the principles, if you call them principles, advocated by me in my communications with the Press recently. But, I think, the President has not been fair to the tobacco industry.
I have followed this industry very closely during the last eight or nine years and I have frequently spoken to the principal of it, Colonel Sir Nugent Everard. During the period of the European war the consumption was pretty considerable; as a matter of fact quite a decent quantity of the Irish tobacco was consumed by the British Army at the time, and a sufficient market was created, and the industry paid during that time. But the industry is not now paying, for the reason that Irish tobacco is used only by Irish manufacturers, and that Irish tobacco manufacturers have only been able to hold for a considerable time past something like 20 per cent. of the Irish trade. It follows from that that most of the output in the Irish tobacco fields must be very limited. If you give the Irish tobacco manufacturers a footing here, and it is assumed that they increase the output to sixty or seventy per cent. of the total consumption on the Irish market, it naturally follows that the Irish tobacco growers will again get on their feet. At the present time the market for Irish-grown tobacco in the country is too limited to make it an economic success.
at this stage resumed the Chair.
It really goes hand in hand with the efforts which are being made to revive the sale of Irish-made tobacco. If the Irish market is captured by the Irish tobacco growers I have no doubt that, given a bit of encouragement, Irish tobacco growing will again resume the position it held in the years 1916-17. It is a matter which I think ought to be treated carefully and sympathetically. I am not satisfied that this country cannot grow tobacco successfully from the economic standpoint, nor am I satisfied that the Irish people cannot be acclimatised to the smoking of Irish tobacco. I have smoked it myself for years and have found it satisfactory. I confess that occasionally, because of the small demand for the tobacco, it has not been up to the standard you might expect, but it is recognised that tobacco to be kept up to a certain standard must have a certain consumption. Irish tobacco had not that great consumption, and therefore it was not always up to concert pitch so to speak. The whole position of Irish tobacco, I think, deserves very sympathetic consideration, and if it gets that consideration I am fairly well satisfied that it will again resume its position in the Irish market. The whole position, I understand, is to be put before the President one of these days by Sir Nugent Everard and others who are interested in the industry. It would be a pity to turn it down without at any rate examining the future as well as the present and the past.
Perhaps the President will now wind up the debate?
There is only one way I can wind it up and that is by telling a story. At one of the recent exhibitions held in the Mansion House about Christmas time a certain reverend gentleman who grows tobacco and sells it in packets happened to visit one of the tobacco stalls. Seeing a parcel of the material that he had grown himself he asked the assistant in charge for a packet of it. He was supplied with his order and was going away when the girl, whose sympathy for his reverence seemed to have been excited, called him back and said, "I beg your pardon, Father, I hope you will survive it."
Question put: "That Section 13 stand part of the Bill."
Agreed.
SECTION 14.
"All proceedings for the recovery of any tax or duty now under the care and management of the Revenue Commissioners, or any fine, penalty or forfeiture incurred in connection with any such tax or duty shall (unless the same are authorised by law to be taken at the suit of the Revenue Commissioners) be taken at the suit of the Attorney-General of Saorstát Eireann."
I move as an amendment immediately after the words "Revenue Commissioners," to insert the words "or of one of their officers or of an officer of the Peace." This amendment relates to certain proceedings taken at the suit of the Revenue Commissioners. As a matter of fact, proceedings are also taken by Officers of the Revenue Commissioners and Officers of the Peace, and the object of the amendment is to ensure that that procedure shall continue.
Amendment put and agreed to.
Motion made and question put: "That Section 14, as amended, stand part of the Bill."
Agreed.
SECTION 15.
(1) Section 3 of the Adaptation of Enactments Act, 1922 (No. 2 of 1922) (which relates to the meaning of the name "Ireland" in British Statutes) shall not apply to Section 38 of the Stamp Duties (Ireland) Act, 1842 (which exempts legacies to charities in Ireland from legacy duty).
(2) The said Section 38 of the Stamp Duties (Ireland) Act, 1842, shall be construed and take effect as if
(a) The words "Saorstát Eireann" were substituted for the word "Ireland" where that word firstly occurs in the said Section 38; and
(b) the words "Saorstát Eireann or Northern Ireland" were substituted for the word "Ireland" where that word secondly and thirdly occurs in the said Section 38.
(3) This Section shall continue in force for so long only as the Minister of Finance is satisfied that by the law in force in Northern Ireland a like exemption is given from duty in Northern Ireland as is given by the said Section 38 as amended by this Section from duty in Saorstát Eireann.
Motion made and question put, "That Section 15 stand part of the Bill," and agreed to.
SECTION 16.
(1) Every provision in any Act to which this Section applies requiring a bond to be entered into shall be sufficiently complied with by entering into a bond with the Revenue Commissioners, and every mention or reference contained in any Act to which this Section applies of or to a bond entered into, under or in pursuance of any such Act shall be construed and take effect as including a mention of or reference to a like bond entered into with the Revenue Commissioners.
(2) Every bond which has heretofore or shall hereafter be entered into under or in pursuance of any Act to which this Section applies may be enforced by any proceedings or other means by or at the suit of the Revenue Commissioners of a like nature to the proceedings or other means by which a similar bond could have been enforced previous to the 6th day of December, 1922.
(3) This Section shall apply to every Act of the Parliament of the late United Kingdom of Great Britain and Ireland which was on the 31st day of March, 1923, in force in Saorstát Eireann and which related to any of the taxes and duties mentioned in this Act or in the First Schedule hereto or to the management of any of such taxes and duties.
Motion made and question put "That Section 16 stand part of the Bill," and agreed to.
SECTION 17.
Every Order made under the Adaptation of Enactments Act, 1922 (No. 2 of 1922), by the Executive Council of Saorstát Eireann for the purpose of modifying or adapting any British Statute (as defined by that Act) relating to any of the taxes and duties mentioned in this Act or in the First Schedule hereto, or to the management of any such taxes and duties, shall come into operation and take effect from the date specified in such Order, notwithstanding that such date is prior to the date of the Order, and if no such date is so specified then such Order shall come into operation and take effect from the date thereof.
I move to insert before this Section a new Section, as follows:—
"An appeal shall not lie under Section 13 of the Stamp Act, 1891 (whether as originally enacted or as applied by any other enactment), on any question relating to the value of any property and in lieu of such appeal any person dissatisfied with any decision of the Revenue Commissioners as to the value of any property for the purpose of an assessment under the said Act may appeal against such decision in the manner prescribed by Sections 33 and 34 of the Finance (1909-10) Act, 1910; and so much of Part I. of that Act as relates to appeals, shall apply to an appeal under this Section."
The object of the amendment is to make provision for a simpler machinery for determining the value of land where a dispute arises between persons accountable for the transfer to the Revenue Commissioners under the law, as it stands, this has to be done by a case stated by means of an appeal to the High Court. The amendment provides that the land will be valued by a referee who is an expert in the value of land. It saves expense and it saves time.
Amendment put and agreed to.
I move: "That the new Section stand part of the Bill."
Agreed.
I move: "That Section 17 stand part of the Bill."
Agreed.
SECTION 18.
Any security which the Minister of Finance has power to issue for the purpose of raising any money or loan, may be issued with a condition that neither the capital of nor the interest on such security shall be liable to any taxation in Saorstát Eireann so long as it is shown in the manner to be prescribed by the Minister of Finance that such security is in the beneficial ownership of a person or persons who is or are not ordinarily resident in Saorstát Eireann, and every security issued with such condition shall be exempt from taxation accordingly.
I think it would better suit the convenience of Deputies that we should take Amendments 11 and 12 before Amendment No. 10, which is an amendment to delete the section.
Then I will formally move the amendment standing in the name of Deputy Davin, to insert before the words "Saorstát Eireann" the words "and who is or are not a citizen or citizens of."
The course you suggest, A Chinn Chomhairle, makes it necessary to argue the case for deletion on the amendment now moved by Deputy O'Connell. As the Section stands, without the amendment moved, a person who is resident, and is satisfied at least that he is ordinarily resident in Saorstát Eireann would be relieved from taxation on certain securities, at the discretion of the Minister for Finance. I want to ensure that a citizen of Saorstát Eireann, who is living on the interest of securities of this kind, shall not be encouraged to go outside the Saorstát to live. In the earlier debates upon another Bill, the Double Taxation Relief Bill, we were told that we wanted to prevent the flight of citizens from the Saorstát to other countries.
Now, the Section now proposed would rather encourage such departure from the Saorstát. The Bill, as it stands, says so long as it is shown that such security is in the ownership of a person who is not ordinarily resident in the Saorstát, he may be relieved of taxation upon such security. I want to ensure that that person shall not be a citizen of the Saorstát, and by such means, to discourage the citizen, who is living upon the interest of investments, from leaving the Saorstát and thus evade taxation. One can imagine that if the Minister proposes a scheme of relief and issues securities, or raises money in a form which will not be liable to taxation, that citizens of the Saorstát may invest in such securities and remove their residence to the Co. Antrim or Down, or, perhaps to North Wales. They would not then be "ordinarily resident," and would be relieved of the taxation on these securities. The object of the amendment under discussion is to prevent that kind of action on the part of citizens of the Saorstát.
I think I explained before that it was our intention, in issuing certain securities, to issue them without a liability to deduction in respect of Income Tax. The same thing has been done already in other countries. I think War Loan interest in Great Britain is paid to persons that are not ordinarily resident in Great Britain, without any deduction of Income Tax. There is an inducement to persons to invest in such securities in that case. This is permissive. It is a power that we ask. I am almost certain that we will have to utilise it if it be given, but if it be not given you are assuredly closing up a possible source of money, unless we were to offer such an interest-bearing security as would damage the credit of the State. The Section is designed to enable the Government to issue securities with the condition as to freedom from Saorstát Eireann taxation in the case of persons not ordinarily resident in Saorstát Eireann, the object being, as I have stated, to induce such persons to invest. The adoption of the amendment would deprive us of the power that we ask.
It is just as I expected. The Minister will follow the argument against the deletion. I have been compelled to discuss the matter on Amendment No. 11. I would prefer to make a case for the deletion of the whole Section, but I have tried to make the case for the insertion in the Section, if it is eventually to stand, of certain words, so that the benefit will not be available for persons who are citizens, and who leave the country for the purpose of benefiting by the Minister's proposal. The Bill as it stands will only apply to those who are not ordinarily resident. A citizen of the Saorstát may leave the country and not be "ordinarily resident" in the Saorstát. You will thereby encourage such citizens, who live upon interest on investments, to leave the country to get the benefit of this remission from taxation. I want to suggest that that benefit should apply either to all who buy these securities or to none, and that a preference should not be given to those who live outside the country, thereby encouraging people who are ordinarily resident in the country to become ordinarily resident outside the country.
"And who is or are not a citizen or citizens of." I must say that my stupidity in considering that is, to some extent, responsible for the statement that I made for the Section being kept. I do not quite understand what it means.
The trouble is that we have had to follow the language of the draughtsman, which is unfortunately difficult to understand.
"Any security which the Minister of Finance has power to issue for the purpose of raising any money or loan may be issued with a condition that neither the capital of nor the interest on such security shall be liable to any taxation in Saorstát Eireann so long as it is shown in the manner to be prescribed by the Minister of Finance that such security is in the beneficial ownership of a person or persons who is or are not ordinarily resident in Saorstát Eireann."
That is to say, the foreign investor will be relieved of taxation on this security. That is the proposal in the Bill. If he is ordinarily resident abroad he will not have to pay taxation. I want to add the words which will secure that he will: "who is not ordinarily resident in or who is not a citizen of Saorstát Eireann," and you can add the plural as you wish.
There does not seem to be any material difference between Deputy Johnson's proposal and the speech of the Minister for Finance, for the Minister explained that his purpose was to have through the permissive Clause the power to issue securities not subject to Income Tax collection in order to secure subscription to those issues on the part of foreigners. Now, the only thing so far as I understand, or misunderstand, at issue between the two is whether to use the formula of "non-citizens" or to use "foreigner." It seems to me that "non-citizen" meets the case, because a foreigner might be resident from time to time in the Saorstát and ordinarily resident out of it, and he would be able to come here and enjoy the advantages of a Free State and at the same time, by virtue of his non-domicile here, escape Income Tax upon those investments. Deputy Johnson draws attention to another loophole by which a citizen could remove his habitation elsewhere, and in Great Britain, for example, invest in these securities and escape the obligation of the Income Tax law. What is really required to meet the two is that the Minister shall have power to issue these securities without income tax provided that the investor is not a citizen of the Free State and is ordinarily resident outside the Free State. I think that meets the claims of both sides.
I do not know why the question of citizenship has been imported into this thing. It seems to me to have really nothing to do with it. Income Tax is always charged in the country in which the person resides. Taking the law as adapted, income arising here is charged with Income Tax, and every person residing in this country is liable to Income Tax. Citizenship has nothing to do with the matter, and I do not know what Deputy Davin's idea was in introducing the question of citizenship. This matter is not to be argued along the lines that Deputy Johnson has gone on, because a person will leave this country to escape double tax. If we had not made the arrangements that are in the Double Taxation Relief Act, people who would have been liable to double tax would have had practically no alternative to leaving the country, if they did not wish to bear an absolutely crushing burden. People who hold a security can more easily escape taxation, if that is their desire, by getting rid of the security and purchasing another security, than by leaving the country. There is no danger that this provision would cause anybody to get out of this country. The market price of a security depends not only on the rate of interest, but on such exemptions as these.
If a holder abroad has certain advantages over a holder in Ireland, it will be quite easy for the holder here to sell out at what will be the market price, having regard to any advantages attached to the security, and invest in something else. There would be no danger unless a person would be induced to go outside Saorstát Eireann for the purpose of avoiding being liable to taxation on the securities dealt with in this Section. On the other hand, when somebody outside the country wanted to invest, if he knew he was not liable to Income Tax on that security in the Saorstát, he would know exactly where he stood. He would not have the trouble, if he lived in Great Britain, of applying for exemption or a refund of Income Tax charged to him here. He would escape that trouble. If we leave Great Britain, and take the case of the United States of America or France, we have no arrangement as regards relief from double taxation with these countries. Consequently, if a person were to be liable to taxation on a security in this country, and liable again in the other country in which he resides, he would not be likely to invest in that security. It is simply a matter of giving the inducement to an outside capitalist or possessor of money to invest in securities in Saorstát Eireann without being subject to any disabilities and without being in any doubt as to what his position might be. It would not and could not lead to any body leaving the country for the purpose of escaping taxation. The position in regard to it is entirely different from the position of Income Tax in general as it was dealt with under the Double Taxation Relief Act.
If the Income Tax attaches, as it were, to the person, and he may be charged with whatever securities he has, then if he wants to escape and you provide him with no other means of relief, he must leave the country. If you are only dealing with one kind of security, he can realise that security at the value it has because of the exemptions made in its favour and can invest in something else. As I said in the beginning, I do not know how the question of citizenship arises.
The Minister has failed to appreciate the point that there is a lower rate of Income Tax in Great Britain than in Ireland—6d. in the £, and it may be greater next year. That difference would very well be sufficient to induce an investor to live in England, and enjoy the advantages of the security that is issued in Ireland, and save the Income Tax of 6d. in the £, or perhaps 1/- in the £. The Minister speaks of realising, but I am assuming that these funds are going to be taken as investments. I cannot help going back to the argument in favour of the deletion of the Clause. It might be better to put that out and save another discussion. I cannot think that it is good policy by giving special advantages to investors abroad, to invite them to come to Ireland with their money, because they are treated better than Irish investors. I do not think there is a good case made for giving a special preference to English investors, because that is what it means—either English or American. It practically is an invitation to English investors to buy up Irish stock, and you are giving them an advantage over Irish investors. I do not think that is a good policy, and it is an argument against the Clause as a whole. But suppose the Clause was to stand, then I say that you ought not to give any encouragement to the Irish citizen who has money, and whom you feared, when you were dealing with the Double Taxation Bill unless you introduced relief, that you would be driving over to England. I do not want to reverse that process now, and by this Bill encourage him to go over to England, which will be the effect of this relief. The inducement will be very much greater if in succeeding years the Income Tax is still lower in England as compared with Ireland.
It does not interfere with any persons who are citizens of Saorstát Eireann, but not ordinarily resident here, partaking of the particular security. A person can be a citizen and can still purchase.
Do you desire that?
But if that citizen sells out, as Sir Hutchinson Poe is supposed to have done, and goes to live in England, then he is not ordinarily resident in Saorstát Eireann. He has left the country, but has his investments in Irish stock. He is not paying any Income Tax to the Saorstát, and he is getting the advantage of the difference between the English and Irish tax.
That is an argument for an equal rate of Income Tax.
Hear, hear.
Amendment put and negatived.
I move the following amendment. "To add after the word `accordingly,' line 19, a new Sub-section as follows:—
"(2) The provisions of Section 34 of the Finance Act, 1917, and of Section 42 of the Finance Act, 1918 (which provide that certain stocks and bonds issued by the British Treasury should be accepted in satisfaction of death duties), shall not apply in the case of any claim for death duties arising in Saorstát Eireann on a death occurring on or after the 1st day of April, 1923.
"This Sub-Section shall apply to stocks and bonds issued by the British Treasury before the passing of this Act, as well as to stocks and bonds so issued after the passing of this Act."
This is merely a drafting amendment. In the Bill as printed Section 19 repeals certain Sections of the Finance Acts of 1917 and 1918. The object of this amendment is to do the same thing in another form.
Agreed.
I move: "That Section 18 as amended stand part of the Bill."
Question put: "That Section 18 as amended stand part of the Bill."
Agreed.
SECTION 19.
The Enactments set out in the Second Schedule to this Act are hereby repealed to the extent mentioned in the third column of that Schedule.
I beg to move "to delete the Section and insert a new Section as follows:—"The German Reparations (Recovery) Act, 1921, is hereby repealed." This is also a drafting amendment repealing an Act in the Second Schedule to the German Reparations (Recovery) Act.
It was thought that the terminology of the amendment met the case much better than that of the Clause. That was the reason of the substitution.
Amendment agreed to.
Motion made and question put: "That the new Section stand part of the Bill."
Agreed.
SECTION 20.
(1) This Act may be cited as the Finance Act, 1923.
(2) So much of this Act as relates to income tax or to super-tax shall be deemed to come into force on and shall take effect as from the 6th day of April, 1923, and so much of this Act as relates to any other tax or any duty shall be deemed to come into force and shall take effect as from the 1st day of April, 1923.
I move the following amendment: "To insert immediately after the word `force' line 28, the word `on'." This is merely the amendment of a printer's error.
Amendment agreed.
Motion made and question put: "That Section 20 as amended stand part of the Bill.
Agreed.
FIRST SCHEDULE.
The duties of Customs.
The duties of Excise.
The duties payable by way of Stamps, including duties payable upon or with reference to death.
Corporation Duty.
Corporation Profits Tax.
Mineral Rights Duty.
Motor Vehicles Duty.
I move the First Schedule.
Question put: "That the First Schedule stand part of the Bill."
Agreed.
SECOND SCHEDULE.
ACTS REPEALED.
|
Session and Chapter. |
Short Title. |
Extent of Repeal. |
|
7 & 8 Geo. V., c. 31 |
Finance Act, 1917 |
Section 24. |
|
8 & 9 Geo. V., c. 15 |
Finance Act, 1918 |
Section 42. |
|
11 Geo. V., c. 5 |
German Reparation (Recovery) Act, 1921. |
The whole Act. |
I move "To delete the whole of the Second Schedule." We have got rid of the Second Schedule by the two amendments which have just been passed.
Amendment agreed to.