FINANCIAL RESOLUTIONS (REPORT.)

MINISTER for FINANCE (Mr. Blythe)

I beg to move that the Dáil agree with the Committee in Resolution No. 15:—

(1) That sub-section (1) of Section 2 of the Finance Act, 1894, shall, in the case of a person dying on or after the 1st day of April, 1924, be read as if there were added after paragraph (d) thereof the following paragraph:

(e) Any personal or moveable property situate out of Saorstát Eireann taken as a Donatio mortis causa made by any person dying domiciled in Saorstát Eireann, or taken under a disposition made by any person dying domiciled in Saorstát Eireann and purporting to operate as an immediate gift inter vivos whether by way of transfer, delivery, declaration of trust, or otherwise which shall not have been bona fide made at least three years before the death of the deceased, and any personal or moveable property situate out of Saorstát Eireann taken under any gift, whenever made, by any person dying domiciled in Saorstát Eireann of which bona fide possession and enjoyment shall not have been assumed by the donee immediately upon the gift and thenceforward retained to the retire exclusion of the donor or of any benefit to him by contract or otherwise.

(2) That in the case of property passing on the death of a person dying on or after the 1st day of April, 1924, sub-section (2) of Section 2 of the Finance Act, 1894, shall be read as if there were added thereto the words "or but for the provisions of Section 38 of the Stamp Duties (Ireland) Act, 1842, or of Section 18 of the Succession Duty Act, 1853."

Mr. JOHNSON

Would the Minister tell us what this resolution means—in English I mean?

Mr. BLYTHE

It simply means that these gifts that were made by a person within three years of his death were, if situated outside the late United Kingdom, not liable to estate duty. The Acts have been adapted so that Saorstát Eireann is substituted for "United Kingdom," and that means that property of that nature in such circumstances outside Saorstát Eireann is not liable for estate duty. For instance, if a man within three years of his death gave a certain amount of Guinness's shares, as Guinness is a British Company, registered in England, that would not be liable to estate duty. If, however, he gave Great Northern shares, the company being within the Saorstát, the amount would be liable to duty. It is to remove what is an anomaly and to restore for all practical purposes the position which obtained before the Treaty. It will bring in property not previously liable, that is property outside the late United Kingdom, but that is of little consequence, when we have regard to property situated in Great Britain and Northern Ireland, and owned by people who may die in the Free State.

Mr. BLYTHE

I beg to move that the Dáil agree with the Committee in Resolution No. 16:—

That in the case of property passing on the death of a person who dies on or after the 1st day of April, 1924,

(a) Section 47 of the Finance (No. 2) Act, 1915, shall not operate to exempt from any taxation to which but for that section as adapted it would be liable, the capital or interest of any of the securities therein referred to so long as they are in the beneficial ownership of persons who are either domiciled or ordinarily resident in Great Britain or Northern Ireland, and

(b) Section 63 of the Finance Act, 1916, shall not operate to exempt from any taxation to which but for that section as adapted it would be liable, the capital or interest of any of the securities therein referred to so long as they are in the beneficial ownership of persons who are either domiciled or, being British subjects, are ordinarily resident in Great Britain or Northern Ireland.

This resolution is to remove exemption from estate duty which exists on British war securities when they are owned by a person domiciled or ordinarily resident in the late United Kingdom. There is no reason why this particular exemption should remain, and, in fact, we are removing all this exemption from taxation which British war securities enjoy. We did so in the main case last year, and we are in this resolution completing that.

Mr. BLYTHE

I beg to move that the Dáil agree with the Committee in Resolution No. 17.

That the several enactments mentioned in the Schedule to this Resolution (which enactments relate to the death duties on property passing on the deaths of British sailors and soldiers) shall to the extent mentioned in the third column of the said Schedule not apply to property passing on the death of any person dying on or after the 1st day of April, 1924, and shall be repealed accordingly.

SCHEDULE.

Session and Chapter.	Short Title.	Extent of Repeal.
57 & 58 Vict., c. 30.	Finance Act, 1894.	In sub-section (1) of Section 8 the words “and for the exemption of the property of common seamen, marines, or soldiers who are slain or die in the service of Her Majesty.”
63 & 64 Vict., c. 7.	Finance Act, 1900.	Section 14.
4 & 5 Geo. V., c. 76.	Death Duties (killed in War Act, 1914).	The whole Act.
5 & 6 Geo. V., c. 89.	Finance (No. 2) Act, 1915,	Section 46.
7 & 8 Geo. V., c. 31.	Finance Act, 1917.	Section 29.
8 & 9 Geo. V., c. 15.	Finance Act, 1918.	Section 44.
9 & 10 Geo. V., c. 32.	Finance Act, 1919.	Section 31.
11 & 12 Geo. V., c. 32.	Finance Act, 1921.	Section 43.

This repeals exemption from estate duty, "of common seamen, marines or soldiers who are slain or die in the service of Her Majesty." We feel that there is no reason for exempting the property of British soldiers from that duty in this country.

Mr. BLYTHE

I beg to move that the Dáil agree with the Committee in Resolution No. 18:—

That Section 53 of the Finance Act, 1921, from the beginning of the section down to the words " Finance Act, 1920, and" (being so much of the said section as enacts that the interest received by a company on certain British Government securities shall not form part of the profits of the company for the purposes of corporation profits tax) be repealed as regards any accounting period ending after the 31st day of March, 1924.

It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

This is another case of exemption of British War Securities from certain practices. The Finance Act, 1919-1920, provides for the purposes of the Corporation Tax that the dividends on these British securities shall not be reckoned as part of the profits of the company. There is no reason why that exemption should be retained, and, as I have already said, we are removing that. As I also said, it is really a matter that should have been done in the Finance Act of last year.

Mr. GOOD

I do not know that this particular tax is on all fours with the others. Most people are agreed that the Corporation Tax is really a war tax that should have been repealed long ago. That being so, I think it is hardly fair so long as the tax is continued to withdraw certain easements in connection with that tax. The Corporation Tax has long been a source of irritation to commercial men, both in this country and in the sister Isle. The Chancellor of the Exchequer in the sister Isle was more willing to consider the views put forward by the commercial community in connection with this tax, and he agreed that the reasons that had been put forward for the abolition of this tax were reasonable, so much so that he abolished fifty per cent. of the tax in the Budget of last year, and abolished the whole of the tax in the Budget of this year. It was pointed oat to the Minister for Finance here that if he could do something in a similar direction it would help to revive industry and reduce the number of unemployed, but instead of in any way relieving this burden he proposes to withdraw under the resolution certain easements in that tax. I take it from the wording of this resolution, assuming a company had some of its reserves invested in the War Loan, and the interest derived from these investments was brought in as profits heretofore, that the interest arising from those, which would really be part of the profits of a limited company, was exempt from this tax. Instead of easing the burden, the Minister is going to make it heavier by withdrawing those easements. I would press this matter on the Minister, and remind him that we are getting to a stage at which the commercial community is being loaded with a load which it can hardly carry. I would, therefore, ask the Minister to reconsider this matter.

Mr. BLYTHE

I do not think that this will necessarily impose any burden on the company, because they can exchange those securities. Any company that feels that it does not want and ought not to be burdened unduly can sell these securities at prices which will take into account the fact that they are exempt from this particular tax. They can sell securities at that price and buy others which are not exempt, and I believe that they will be able to gain something in income by the exchange which will compensate them. It seems to me that it is quite impossible for this Government to give exemption from taxation on securities other than its own securities.

Mr. GOOD

The Minister is not quite accurate in what he states, that money can be transferred into other securities. In cases of the kind mentioned those particular moneys must be easily available. In those particular securities it must be money you can change into cash at a few moments' notice. With all respect to the Minister, there are very few Irish securities you can do that with, at the moment, without suffering serious loss. That is a serious matter for business firms. I am sure if the Minister were to consult a large number of commercial men he would get the same story from the whole of them. We invest in a security which we can transfer into cash at a few moments' notice. That being so, I do not think the reasons put forward by the Minister are quite adequate.

Mr. BLYTHE

I beg to move that the Dáil agree with the Committee in Resolution No. 19:

"That it is expedient to amend the law relating to Customs and Inland Revenue (including Excise) and to make further provision in connection with Finance."

Mr. JOHNSON

On this Resolution there is one word I would like to say which deals with what Deputy Good said a few moments ago. The commercial community is beginning to feel itself overburdened, and, therefore, the suggestion is that some of the taxes which fall most heavily on the commercial community should be lightened. The agricultural community say, too, that taxation falls heavily upon them. They are overburdened and they cannot afford even what they are at present called upon to pay. The general working classes realise, as consumers, that they are excessively burdened through the taxation upon so many commodities which they consume, and if there is any lightening of taxation we claim that it should come through those ordinary necessaries of life and common luxuries in general consumption. Who else, then, is there? If Deputy Good's plea cannot be acceded to, or, if, on the other hand, Deputy Good's plea can be acceded to, to whom does he think the Minister should look to bear this burden? Is he willing to suggest to the Minister that there is a source of income that has not been sufficiently brought into operation to fill the Treasury, and that is the ground landlords of urban areas?

I suggest that if the information is not at present in the hands of the Minister, it would be well to have immediately set on foot an inquiry into the possibilities of drawing into the National Exchequer a very large proportion, if not the whole, of those values which have been created by the community, but which hitherto have been enjoyed by the ground landlords of the towns and cities. Perhaps Deputy Good, realising that neither the commercial community nor the agricultural community, nor the working-class community can afford to continue bearing the present burden, would agree with me that we should look to this small section of the community, which has for long been enjoying privileges which legislatures, chiefly manned by landlords, were able to impose upon the community for the benefit of ground landlords. I wonder would Deputy Good and those associated with him agree in pressing upon the Minister the necessity of looking in this direction for some of the funds which are required to relieve commerce, agriculture, and the general consumer of some of the present burden of taxation. Perhaps the Minister would inform us whether there is, at present, available all the information regarding the sums yearly drawn by ground landlords from the cities and towns of the Saorstát, and to what extent is that annual income taxable and taxed; what is the revenue which he derives from taxation on the ground rentals of the towns and cities of the Free State, and if he cannot give that information, whether he will institute an inquiry, public or private, into the possibilities of revenue from that source?

Mr. GOOD

I think the Minister would be well advised to proceed very slowly in the direction in which Deputy Johnson is anxious he should proceed. This is only a veiled form of capital levy that is suggested by Deputy Johnson, and which some people, possibly not incorrectly, call confiscation of property. Whatever may have been said on that particular point, which Deputy Johnson has urged, a great number of years ago, when the matter was very much more questionable than it is today, a great many people in recent years have invested money in ground rents. It was an attractive form of investment, and why it should be now proposed to attack that more than any other form of investment I have yet to get a reason. I think this idea that is floating around the Dáil, and that is in the minds of many in the country, that we are doing right in attacking investments, is doing an immense amount of harm and injury to the country. We are anxious in this State to establish confidence in this community, and if we proceed along the lines suggested by Deputy Johnson, I am afraid we will not do either of those things. Most of the members of the Dáil will agree that the direction I have indicated is the direction we should follow in the national interest.

Mr. BLYTHE

I have only to say in this matter that we realise very fully that the system of taxation which we have inherited was a system devised with reference to the needs and conditions in another country, and that it is not necessarily in many important respects suitable to this country, and in other respects is clearly unsuitable. We are having investigation made in several directions with a view to seeing what changes can be made so that the incidence of taxation shall give the best opportunities and the best encouragement for development here. We feel it is a matter on which sudden changes should not be made, or changes that have not been well thought out, and for that reason we are looking into the whole system of taxation at the present time.

Dáil Éireann debate - Tuesday, 20 May 1924

Dáil Éireann debate -
Tuesday, 20 May 1924