FINANCE BILL, 1923. - (FROM THE SEANAD).

There is a recommendation from the Seanad in connection with the Finance Bill as follows:—

"Seanad Eireann recommends the insertion after the word `shall,' Section 4, line 5, of the words `as and from the 1st day of October, 1923.' "

Members will recollect that in dealing with this question of the 4 per cent. tax-compounded securities the Double Relief Taxation Order does not apply, and some criticism was indulged in here when we announced that it was our intention to tax this particular security, and it was urged that it was unfair to persons who had invested. For some years this security had been paid free of income tax. In the case of persons paying super tax this security is assessed at a price which would be the actual yield from the security if income tax were deducted. From this particular tax we would get no income whatever, and we gave notice that from a particular date this security would be liable to assessment and to a deduction for income tax here. The effect of that would be that this particular security would pay double income tax. It is tax compounded so far as the British are concerned, and subject to tax here it would mean that the British would get the benefit of the maximum deduction, and we would get the income tax on the actual sum. The case was put that very considerable amounts of money were invested in this country in this particular security. We did not impose any tax on the dividend paid in April, and it appears that there were three issues— February, March and April. The dividend is paid twice yearly, and it falls due on the 1st of August, the 1st September and 1st October. We allow the April dividends to be paid free of income tax, and those who have investments in that particular series would have an advantage over the holders of the other series, and it is quite possible that with a large sum involved—I think the total investment is in the neighbourhood of two millions—there might be difficulty in disposing of this security and investing in another. The Seanad asks that we should allow the dividends payable on the 1st August and 1st September to be paid without any deductions. I agreed to that, and the motion I now move is:—

"That the Dáil agree with the Seanad in the said recommendation."

I second the motion.

The Minister has not told us what one might reasonably think to be the most important consideration, and that is what is this amendment likely to cost. Perhaps that would give some assistance. Is it a few hundred pounds, a few thousand pounds, or a few hundred thousand pounds?

I am speaking entirely from memory. I think the loss would be under £1,600. The particular series of August and September is very much less than the dividend of the series that is payable on the 1st April and the 1st October. In that case I think it might come to £12,000 or £15,000 if the whole lot were included. We have given the major portion, and this is the other slice to level up. I think the cost is very much under £2,000.

I take it from that that the Minister is satisfied that the pleasure derived from this concession is very well worth the £2,000.

I am sorry to disappoint the Deputy with regard to that. I have no pleasure whatever in it, quite the other way. It is a question of a different character altogether. I admit that there was a fair case, and consequently, although with much pain, I accepted it.

I meant the pleasure of the Income Tax payers.

Question: "That the Dáil agree with the Seanad in the said recommendation," put and agreed to.

I move: "To insert after the word `shall,' Section 4, line 5, the words `as and from the 1st day of October, 1923.' "

Motion: "That these words be there inserted in the Bill," put and agreed to.

Seanad Eireann also recommends "that the provisions of Section 9 of the Bill regarding the exemption of charities be extended so as to apply the exemption to Income derived by charities from land and house property." The second recommendation deals with charities and certain exemptions that have been granted to charities up to the time of the setting up of the Saorstát. Charities in what was called the United Kingdom and incomes derived from charities, or used for charitable purposes, were exempt from Income Tax. Charities outside the area of what was called the United Kingdom were exempt. The Bill, as drafted and submitted to the Seanad, dealt with stocks and shares. It was necessary to get reciprocal legislation passed in the British House of Commons as well as here. The recommendation that has been made by the Seanad is in effect what has been passed in the British House of Commons, that is to say, income derived from sources other than stocks and shares, such as lands, is included, and we agree we have got this advantage as far as the charities here are concerned, and we are proposing, by moving this amendment, to give the same advantage to persons resident in Great Britain or Northern Ireland, or to charities owned by those people, and derived from sources here in the Saorstát.

I move: "That the Dáil agree with the Seanad in the said recommendation."

Question put and agreed to.

I move: "To delete Section 9 and insert in lieu thereof the following Section:—

9. Exemption shall be granted—

(a) from tax for the year beginning on the 6th day of April, 1923, under Schedule A of the Income Tax Act, 1918, in respect of the rents and profits of any land, tenements, hereditaments, or heritages belonging to any hospital, public school or almshouse, in Great Britain or Northern Ireland, or vested in trustees in Great Britain or Northern Ireland for charitable purposes, so far as the same are applied to charitable purposes only:

Provided that any assessment upon the respective properties shall not be vacated or altered, but shall be in force and levied, notwithstanding the allowance of any such exemption;

(b) 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 in Great Britain or Northern Ireland for charitable purposes only, or which, according to the rules or regulations established by Act of Parliament, charter, decree, deed of trust, or will in Great Britain or Northern Ireland are applicable to charitable purposes only; and so far as the same are applied to charitable purposes only.

(c) 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, in the names of trustees in Great Britain or Northern Ireland, and applicable solely towards the repairs of any cathedral, college, church, or chapel, or any building used solely for the purpose of divine worship, and so far as the same are applied to those purposes;

Provided that this Section shall only apply where the lands, tenements, hereditaments, or heritages aforesaid belonged to such hospital, public school, or almshouse, or were vested in such trustees, on the 5th day of April, 1923, or where the interest, annuities, dividends, share of annuities, yearly interest or other annual payments arise from investments or other property which were held by such body of persons, trust or trustees, or were subject to such rules or regulations, on the 5th day of April, 1923."

Would the Minister say what paragraph is an alteration of the original?

The gist of the thing is really, "Provided that this section shall only apply where the lands, etc., belonged to such hospital." Until this amendment was suggested we had given some relief to stocks and shares, This is the same thing, and it gives the same exemptions to charities in Great Britain and Northern Ireland as our charities have received from them.

(b) and (c) in this amendment were both adopted in the Finance Bill at present in the House of Commons in Westminster. They were adopted there on the representations of people who represented every form of charitable and religious institution in this country, and the amount of relief that every Irish charity of every kind will derive from those amendments put into the English Finance Bill during the last week is very great indeed. The suggestion was that for the very great relief that was given to charities in the Saorstát by the amendments in the English Finance Bill a comparatively smaller relief should be given to the very few charities in Great Britain and Northern Ireland which possess investments in the Soarstát. Supposing a hospital in Northern Ireland had investments in trustee stocks in any railway in the Saorstát or in the Bank of Ireland, these amendments are necessary to give them the same relief that all the charities in the Saorstát derive from the corresponding amendments in the Finance Bill of Westminster. The two amendments (a) and (c) are the additional ones that have been put in, and I think we get by far the lion's share of the benefit. The amount of relief that would be given to charitable and religious institutions outside the Saorstát would be only a small decimal fraction of the corresponding relief we would derive from over there. I think that we ought without any hesitation to jump at what has been given us, and to endeavour to secure it by putting this amendment in our own Finance Bill.

I have no desire to raise any objection whatever to this amendment, but I would like some guidance for future recommendations of this kind as to the course that should be adopted. I take it that the amendments that are embodied in this new section do not contain anything except what the Minister has explained. But we sent to the Seanad a Bill, and they recommended certain changes. Because it was a Finance Bill they could not amend it. Having made the recommendations, the Bill is presented in the new form, and it occurs to me that the procedure should not be the mere Committee procedure. We are not now dealing merely with an amendment in the form in which it leaves the Seanad, but with an amendment proposed by the Minister in charge of the Bill, recasting that section of the Bill. I would like your ruling as to whether we should consider such an amendment as a re-introduction of the Bill in the Committee Stage, or what is actually the position in such a case.

The Seanad has power to amend a Bill which has not been certified as a Money Bill. When such an amendment comes back to us we consider it in Committee. We may agree to it, and, if we do, it is then inserted in the Bill, and the Bill becomes law in that form. We may disagree with it, as we did in the case of the National Health Insurance Bill. In that case we send it back to the Seanad, saying that we disagree, and either giving the reasons or refraining from giving the reasons. In that case the Seanad insists, or does not insist, or makes a further amendment. In the case of a Bill which has been certified as a Money Bill, like this Finance Bill, the Seanad cannot make amendments, but has power to make recommendations, and when the Bill comes back from the Seanad with these recommendations, if, as in this case, the recommendations are agreed to, or if the Minister for Finance, as in this case, moves that we agree with the recommendations, then we are in the position that we have to make an amendment which, in our judgment, carries out the recommendation. Therefore the amendment to the Bill must be proposed, and in considering that amendment we can take it through the Committee Stage —that is to say, we can go into Committee on that particular amendment. We cannot take up again the consideration of the Bill itself; we can only consider the Bill again in relation to the recommendation made by the Seanad. I do not know whether Deputy Johnson meant to put forward the idea that when the Bill comes forward with a recommendaton the whole Bill can be discussed?

I do not want to urge that, but I do want to urge that if a Bill which, in any of its clauses, has been re-cast, is to be considered in Committee, and then presumably in Report, we ought to have the usual notices regarding amendments that are put forward for Committee. I am not asking that in this case this amendment should be given due notice of, but it is conceivable that an amendment re-cast on the recommendation of the Seanad might alter considerably other portions of the Bill, might have an effect upon other portions of the Bill, and consequently the whole Bill, in relation to that new form, ought to be considered, and we ought to have time to consider the effect of any changes that are made on the Seanad's recommendation.

I quite agree that due notice should be given. There is no use in my saying anything to the Minister for Finance about that. But certainly when a new Section is inserted in this way, consequential amendments may be made if the Chair is satisfied that the amendments are really consequential amendments upon the amendment which it is proposed to insert in order to give effect to the Seanad's recommendation. In this particular case before us now, if we agree to the amendment we shall have to take the new Section as being read a second time, and then move to insert it in the Bill, which procedure will give the required discussion.

Amendment agreed to.
Motion: "That the new Section be read a second time."
Agreed.

I move that the new Section be inserted in the Bill.

I second.

Question put and agreed to.