I want to confine what I have to say to the question of income tax charges against railway employees. I do not want to discuss the Cork proposition or the general question of assessments of income tax. I make that statement, as it is quite possible that other Deputies might want to enlarge on the subject. In his speech on the Finance Bill in June last the Minister for Finance made a statement regarding the Second Schedule, which deals with a large number of repeals. I asked the Minister what was the meaning and effect of that schedule containing repeals of previous Acts of 1916-18. The Minister answered that the repeals were provisions relating to quarterly assessments under previous Acts. He said:—
"The whole business of the quarterly assessments was suitable enough when you had rising wages and when you had quite a number of weekly wage earners by which the amount of income tax would be assessed in the ordinary way according to these proposals."
With that assurance we assented to the section enacting the repeals, so that for the future, instead of having quarterly assessments, as embodied in earlier Acts, the provisions for income tax relating to wage earners would be that they would be assessed in the ordinary way. That was the assurance given by the Minister for Finance. What is the outcome? I have here a circular issued towards the end of January by the Great Northern Railway Company to employees pointing out that the company had been required in the past to furnish quarterly returns of those whose remuneration exceeded £150 per annum. They were assessed under Schedule D, and the company made deductions. The company points out that the Finance Act of 1924 provides that all manual workers are to be assessed for the year 1924-25 onwards under Schedule E. That meant that such assessments will be made upon the company and the amount collected through the wage sheets.
"In the event of the company being assessed on your behalf, I shall advise you in due course of the amount of the tax, and arrange for the necessary deductions to be made from your wages in respect of same."
A later circular, dated the 19th February, simply informs the wage earner or the railway employee that the Commissioners of Income Tax have sent a list of assessments against the members of this company's wage staff, the first instalment of which is demanded immediately and the balance before the 30th June. It states:—
"You have been assessed for £8 18s. 5d., which will be deducted at the rate of 18s. per fortnight. If you are not satisfied with the assessment, you should communicate with the Surveyor of Taxes, as I am not supplied with details as to how the amount is arrived at."
Note the difference. In the ordinary way, as promised by the Minister, the taxpayer will be requested to fill up a form giving the amount of his income, on which there are hints and suggestions as to abatements to which he will be entitled under certain conditions. That form is filled up, and the person is informed at a later stage of the amount assessed against him. What has been substituted is that the company is asked to make a statement of the income, or estimated income, of the workman, and the workman is then informed of the amount of the tax. If he has any complaint to make he has to make enquiries of the Surveyor of Taxes. What is the position of that workman? As far as I can gather all workmen employed by the railway company are deemed by the Acts of Parliament to be unmarried men, without dependents, and working a full year without a break. They are assessed on that assumption, and as having no right to abatements. If they complain that they are assessed too highly they are obliged to make an appeal to the Surveyor, and, in many cases, make a personal visit, which means loss of time and loss of pay.
The Great Southern Railway intimates that they have been obliged to furnish the income tax authorities with an estimate of the earnings for the current year. Apparently the estimate is upon the ordinary weekly pay, without reference to possible overtime, or possible breaks or deductions owing to sickness. The effect is, in the first case I quoted, that the man is assessed at £232, based upon his earnings a year ago. There have been changes in the class of work that person is doing and his actual earnings for this year will probably be £40 less than the actual earnings of the year before. He is assessed as an unmarried man. No account is taken of claims for abatement for insurance, dependents, or anything of that kind. And on the mere notification of the Income Tax Commissioners to the railway company that the tax to be charged against a workman is so many pounds, they begin to deduct at the rate of 2/-, 3/-, 4/- or 5/- per week. As I say, the onus of finding out what amount the assessment was on is thrown upon the workman after deductions have begun to take place.
In at least two cases brought to my notice, after the deductions were made it was found the man was not liable to pay any income tax. In one case a man has been assessed on practically £4 per week, and deductions were begun to be made on the assumption that he was a single man without dependents, with no right to abatement. He happens to have been sick for thirteen weeks during the current year. The assessment is made on the assumption that he is earning this year exactly what he earned the year before. He happens not to be a single man without dependents. He is a married man with a family and is far below the income tax level. He has to lose time to go and plead his case, because he cannot afford to have two or three shillings per week deducted from his wages. He prefers to lose a half day in order to make his case before the inspector.
It seems to me that, if that is the method that the Commissioners are adopting to recover income tax from the employees of railway companies, they are doing injustice to the workmen, injustice to the railway companies, and they are simply going to make their income tax returns for this year appear to be higher than they legitimately should be, because there will have to be very considerable repayments, if justice is to be done, in most of these cases. There is, however, every possibility that, once this money is taken out of the wages paid by the workmen, they are not to get any back. They can, no doubt, combine together; they can threaten to strike; they can down tools and make a mess of things to compel attention to be paid to their grievance. There is no suggestion that they will do that yet, but I can say, from the feeling that has been exhibited during the past three or four weeks, if this kind of deduction is to be made, if there is no consideration to be given to the method of assessment, there is so great a heart-burning amongst these workmen that I would not be surprised to find that they are capable of holding up, or at least of threatening to hold up, the railway services until they find those deductions are repaid.
The method of assessment is not in accordance with the promise made by the Minister. It is not the ordinary way. Before any deduction is made, a workman should have the right to know upon what amount he is being assessed. He should have the opportunity to make his claim for abatements, and when all this procedure is gone through, then, if necessary, the question of deductions can be dealt with. Surely we have the right to ask that the workman who pays income tax ought to have an opportunity of knowing on what sum he is being assessed, and the right to make a claim for abatement in accordance with the law, before any tax is taken from him, especially from weekly wages. The position of a man who is assessed as an unmarried man and has four shillings or five shillings per week deducted for so many weeks to the end of June is one of very great difficulty. You are practically putting him in the position of working for a lower rate than his neighbour who happens to be in the same trade, but who is not working for a railway company. The only difference is that the man in the railway company is presumed to have steady employment. My present complaint is not of the fact that he is paying income tax, but of the method of assessment—the unfair treatment of the workman as compared with any other income tax payer who has right to claim abatement before any tax is demanded from him—that he is considered to be in the first instance liable to the whole of the income tax that would be chargeable if he were an unmarried man and had no dependents.
I ask the Minister's earnest consideration of this matter. I ask him to cease, or give the companies authority to cease, making these deductions until each case has been inquired into in respect to abatements. The companies are placed in the unfortunate position of having made a return of the estimated income and are compelled to pay the tax. Then they may make the deductions at any rate they please from the workmen. They may take it off in one week or three weeks, so far as the law goes. That is unfair to the railway companies, but I leave the railway companies to make their complaint in regard to that. I claim on behalf of the workman that he ought to have the right to have the whole case reviewed before any deduction is made—the right to have abatements made, and to know exactly on what basis his assessment is made before any deduction is made from his wages.
