Dáil Éireann debate -
Friday, 13 May 1927

Vol. 19 No. 24

PRIVATE BUSINESS. - FINANCE BILL, 1927—REPORT.

MINISTER for FINANCE (Mr. Blythe)

I move amendment 1:—

In page 4, before Section 8, to insert a new section as follows:—

8. Exemption shall be granted from tax under Schedule D of the Income Tax Act, 1918, in respect of so much of the income of any body of persons established for the purpose of promoting the games of Gaelic football, hurling, and handball or any of them as the Revenue Commissioners are satisfied has been or will be applied to such purpose.

This amendment has been pressed for by a number of Deputies and by the Gaelic Athletic Association. It is one which is of only trivial importance financially. The G.A.A., in common with other associations which make profits out of the playing of their games, pays income tax on these profits. In the case of the G.A.A. the profits are devoted solely to promoting the games. Now, it is a fact that these particular national games have been regarded as worthy of being fostered and promoted for a very considerable time. It was part of the programme of the movement which resulted in the setting up of this State: that these particular games should be fostered and extended as far as possible, and it is thought that while we would not be willing to make any substantial sacrifice of revenue, that where a small sum such as that of about £300 per annum is concerned, that a concession may reasonably be given. So far as Schedule A tax on grounds in the possession of the Association is concerned, that tax will continue to be paid. As a matter of fact, the policy of the body is to use all profits for the purpose of purchasing additional grounds for the playing of these games, and in consequence, while we may lose about £300 under Schedule D tax, we will, in the course of a few years, gain a more or less corresponding sum from an increase in the tax under Schedules A and B.

Mr. JOHNSON

I do not think that this amendment in this form is quite satisfactory. I do not know whether it will be found possible for the Revenue Commissioners to decide what is Gaelic football. But leaving that aside, would it not be much more satisfactory to strike out the word "Gaelic" and apply this exemption to any society formed for the promotion of the games of football, hurling and handball or any of them, or, one might even say, for athletics, so long as they are satisfied that the profits will be applied to the purpose of promoting these games and athletics. I think it is not reasonable, and not at all necessary, that there should be exceptional treatment applied to the association promoting one particular brand, if I may say so, of football. Provided that there is no professional or monetary purpose on the part of associations, beyond the promotion of games, it does not seem to me to be reasonable to exempt from this provision the promoters of other games besides Gaelic football, hurling and handball.

I think that the particularisation of Gaelic football here is not wise, and that while one wants to see hurling and handball promoted, football is a game which has different rules, and there are different associations running different classes of football. To single out one of them for special treatment seems to me to be quite unwise and quite unnecessary. If one wants to say that it is intended to give a financial preference to the promotion of this particular style of football, well it had better be done by a definite vote, and not re-inserted in a Finance Act as a special exemption. I would very much rather have the matter discussed on an estimate proposing to make a grant of £300 to the association which is promoting Gaelic football, hurling and handball than to let this slip in in the Finance Bill and in future years there would be no question about preferential treatment. I think it is quite undesirable to make this specific reference to a brand of football. I would ask the Minister to wipe out the word "Gaelic" and let the exemption apply to any association established for the purpose of promoting the games of football, hurling and handball, so long as the Commissioners are satisfied that the income will be devoted solely to that purpose.

Mr. BLYTHE

I could not agree to accept the Deputy's suggestion. I think that these distinctively national games do merit some special consideration. Undoubtedly under present circumstances national games have a difficulty in maintaining themselves against games which are international in character and which have the special publicity that their international character gives them. I think it is desirable that these distinctively national games should be maintained. I do not want to go further than that. I am no believer in exclusiveness, but I think it is desirable that they should be maintained and that it is, consequently, fair that a certain preference should be given to them. I think under the circumstances, in view of past history and the general desirability of maintaining these distinctively national features of life, that some preference should be given. I would not agree that profits made on and devoted to any form of athletics should be exempted from tax, because if we went so far as that there are many other desirable activities on which money is spent which might be made the basis of claims for exemption from income tax as strong as the case of athletics generally.

We always have attempts made to extend exemptions. There is an exceedingly wide series of exemptions in favour of income going to the promotion of charitable objects. Attempts are always being made to extend exemptions in favour of income devoted to a wide range of other objects, and I feel if we exempted from tax income devoted to athletics generally it would not be possible to stop there. The promotion of athletics, generally, is not an object that is more desirable in itself than many of the other objects for which a similar claim would be made, but when we are dealing with these distinctively national games I think it is possible to draw a line and to draw it in such a way that a very small sum of money will be involved. So far as games are concerned, we exempt them all from entertainment tax, and I agreed with that. Various Deputies said that we were legalising the existing position, whereby the G.A.A. did not pay entertainment tax, and when Deputies claimed that all outdoor games should be exempt from entertainment tax I agreed with them. But exemption from income tax is a somewhat different matter. We are allowing the Association to retain a certain small sum of money which they will devote to the promotion of these particular distinctive games. It does not seem to me that it is necessary for us to do the same thing in respect of athletics generally or of other games.

Mr. GOREY

I think the Minister will be throwing a job on the Revenue Commissioners which it is doubtful if they will be able to carry out—to have due regard to what are national games and what are not. There is no doubt whatsoever that hurling is a distinctively national game, and the same applies to handball. Hurling, beyond all question, is distinctively an old Gaelic game. It has varied; I do not know whether the Scotch game of shinty or the Irish game of hurling is the more Gaelic, but they are similar. In the course of generations the game developed in Scotland in a different way from its development here, with the result that you have shinty in Scotland, and hurling here. But when you come to Gaelic football I would like to know what Gaelic football is. I have grown up with the game. I remember the foundation of the G.A.A. I saw the game before the foundation of the G.A.A., and if the game then had any resemblance to any of the games in existence at the moment it had a distinct resemblance to Rugby football. Gaelic football to-day is not an international pastime. There have been changes in it until it came to be what it is at present. It has changed altogether from what it was when I was a child, when it resembled Rugby. You took the ball under your arm and ran. If the Minister wants details as to how the game was played I can give them to him.

Major COOPER

Appoint Deputy Gorey a Revenue Commissioner.

Mr. GOREY

I do say that the Gaelic game of to-day is not an ancient national pastime.

Mr. BLYTHE

It is not ancient, certainly.

Mr. GOREY

It has no resemblance to the old football game, and if you go on the question of resemblance to that I think you will have to include Rugby, which would be really our national pastime. Where it got the name of Rugby I do not know, but it is more like the old game I saw played when I was a youngster. I think the Minister will have his work cut out for him in connection with Gaelic football if he wants to do justice.

Major COOPER

I think the Minister ought to go on the point made by Deputy Johnson. The Dáil has voted, and will in future vote, money in the Estimates for the encouragement of plays in Irish and for the encouragement of Irish drama. If the Minister wishes to encourage Irish games, especially handball, I do not think the Dáil would refuse him a vote in the Estimates, and that money would be properly accounted for, and it would be open to Deputies who thought it was mis-spent to criticise it. But this means that there will be no opportunity of criticism and no opportunity of calling the account in question. Moreover, if I am rightly informed, this situation has arisen owing to the fact that the G.A.A. has refused to pay income tax.

Mr. BLYTHE

No, they paid both income tax and corporation profits tax.

Major COOPER

I am very glad to have that information. I saw correspondence in the Press, which was possibly not authoritative, which gave me that impression.

Mr. GOREY

They did not make application.

Mr. BLYTHE

That is a different matter.

Major COOPER

I had understood that the attitude of that Association was that they considered that they should be placed in an exceptional position, that they had been exempted from entertainments tax by the British Government—not legally exempted, but practically exempted— and they did not see why the Minister should tax them at all. But if that is not the case I am very glad to hear it. At the same time there is no case for making fish of one and fowl of another, at any rate where amateurs are concerned. I think a professional football club, making profits should be taxed. But I would urge the Minister to exempt all amateur sport which spends its money solely on the promotion of that sport. As against national games I am inclined to believe in international games, of getting to know South Africa, Italy, Spain, Switzerland and Bulgaria, better through the means of games. I believe if the Minister would make the concession suggested by Deputy Johnson it would tend to increase that knowledge and make it easier to bring over foreign teams to play. In any case if it is desired to help national games it should be done through the Estimates and not through the remission of income tax.

Mr. BLYTHE

With reference to that, I would merely say that that argument would apply to the very wide series of exemptions that apply to charities. We might as well argue that if we were to assist charities we ought to do it by a Vote.

Mr. GOREY

There is nothing political in this, nothing reflecting on ex-President de Valera, who played Rugby?

Mr. BLYTHE

No offence intended Amendment put and agreed to.

Mr. JOHNSON

I move—

In page 4, before Section 8, to insert a new section as follows:—

Sub-section (2) of Section 39 of the Income Tax Act, 1918, shall be amended by the addition thereto at the end of the first paragraph of the words—

"and in respect of the annual value of any building, or in the case of a building used for more than one purpose of such proportion of the annual value thereof as the Revenue Commissioners deem appropriate, which is used for the purpose of provident benefits."

This amendment has been put down to give the Minister an opportunity of saying whether he has given consideration to the point I have already made. I pointed out that under Section 39 (2) of the Income Tax Act of 1918 a registered trade union which is precluded, by Act of Parliament or by its rules, from assuring to any person a sum exceeding £300 by way of gross sum, or £52 a year by way of annuity, shall be entitled to exemption from tax under Schedules A C and D in respect of its interest and dividends which are applicable and applied solely for the purpose of provident benefits.

The working out of that has led to certain anomalies. Such an organisation which has premises and which lets those premises to another organisation, is excluded from payment of income tax in respect of the sum due to the letting, but if that organisation occupies the premises for the purpose of its own provident business, it is made to pay the income tax. I think that is quite indefensible. The object of the amendment is to have the matter cleared, and to make it possible for the Revenue Commissioners to decide that the reading of the Act of 1918 allows exemption in the case of the portion of the annual value which is used by the institution for its provident purposes. I do not think there is any need to argue the matter further. It seems to me to be a clear case of mis-reading the intentions of the Act, and I seek in this amendment to have the intention clarified and to have what I believe to be the purpose of the section made practical in its operation.

Mr. BLYTHE

This matter has been given some consideration. The Revenue Commissioners, while not absolutely clear as to the effect of the law, and advice is being sought on that, are of opinion that where premises are used solely for the purpose of dealing with paying out provident benefits and clerical work in connection with that, that income tax should not be payable in respect to that building. As I said, it is not quite clear whether, without legislation, they can give exemption or not, but if it proves on further investigation that exemption cannot be given without legislation, the Commissioners would recommend that legislation should be enacted so that where the building is used solely for the purpose of administering provident benefits no income tax should be payable in respect of it. But where the building is used partly for one purpose and partly for another, it seems that the position is rather difficult. Deputy Johnson said that when the building was let there would be no income tax payable in respect of the rent received from that letting. But that is only so if that income were applied solely to the purposes of the provident benefits. If that rent went into some general fund, or if some of it went to the fund for payment of provident benefit and some for some other purpose, tax would be payable.

The position is that this exemption takes place only if the income is applicable and applied solely for the purpose of provident benefits. To give exemption in respect of a building used for different purposes seems to be carrying it a step further than logically follows from the exemption already given, and that is a matter that would require, at any rate, further consideration before it could be agreed to. But so far as exemption from tax in respect to a building solely used for the purpose of providing provident benefits is concerned the principle is admitted. That building ought to be exempt, and if it proves necessary on further investigation to promote legislation, the Commissioners will certainly recommend that legislation to be promoted. That, however, is as far as it seems wise at present to decide to go. To split up the assessment in respect to a particular building is a matter which would require some further consideration, and which might have reactions which we have not had time to explore fully.

Mr. JOHNSON

I do not want to press this matter at this stage, as the subject is under examination by the Revenue Commissioners, but I would point out that when one is dealing with a registered trade union, as the Act does, it is clear that a trade union is an organisation which has provident and other purposes, and if it can be shown to the Commissioners that certain proportions of the income are used for provident work it is fairly easy for them to estimate the proportion of the cost of the building which should be allocated to the provident work of the organisation. The very fact that the words "trade union" are used implies recognition that there were other purposes besides what might be called in strict legal phraseology provident purposes. There was never any suggestion that the provident purposes could be absolutely disentangled from the other purposes of a trade union and the business conducted in two different premises. When the words "trade union" are used I submit that there is an implication that its provident benefits and its other work are under one organisation and conducted in one premises. I can only ask the Minister to give sympathetic consideration to this matter. I will not press the amendment at this stage, but I hope it will be brought forward in a future Finance Bill.

Mr. BLYTHE

I think some legislation will have to be brought forward in any case, because the section as it stands was originally taken from another Act, not an Income Tax Act, and is obscure in one or two respects.

Amendment, by leave, withdrawn.

Mr. BLYTHE

I move amendment 3 (a):—

In page 6, before Section 14, to insert a new section as follows:—

"An entertainment provided by a society which is established solely for the purpose of promoting the interest of the industry of agriculture or some branch thereof shall not be excluded from the exemption given by Section 7 of the Finance Act, 1921, solely by reason of the inclusion in the entertainment of competitions in the knowledge of the Irish language and in step-dancing or either of them."

This is moved in consequence of a promise I made to Deputy O'Shaughnessy on the Committee Stage. It is to provide that where competitions in the Irish language and in step-dancing take place at an agricultural show, the show committee will not be liable to pay entertainment tax. On the Committee Stage I pointed out that if these competitions were held apart from the show they would be exempt, and if the show were held without these competitions it would also be exempt, but that the position so far is that if competitions were held at the show, the show became liable for entertainment tax. Deputy O'Shaughnessy had a further section to his amendment which provided for exemption from entertainment tax of band promenades and entertainments of a like nature. In the time at my disposal I have not been able to examine that matter sufficiently to come to any conclusion.

Mr. HENNESSY

As to the other portion of the amendment which the Minister states he has not yet investigated, on the last occasion I did not set out the case fully for the Minister. What Deputy O'Shaughnessy and I had in mind was band promenades at seaside resorts held on Bank Holidays and Sunday afternoons, with which are generally associated other entertainments, such as boat races, gymnastics, or something of that kind. These are promoted purely for entertainment and not with the idea of making a profit. In many cases there is a big loss on them. The Minister is anxious to exempt other classes of amusement from this tax, and I cannot understand why he does not undertake to exempt this particular kind of entertainment. Having paid their income tax and other taxes, people go to the seaside resorts on a Sunday afternoon and like to feel quite free from all anxiety as to taxes. When they get a threepenny ticket on entering an enclosure where such an entertainment as this is going on, they do not like to see the word "tax" on the ticket. These functions are promoted for the purpose of amusement and do not interfere with any other local entertainments, such as picture houses or theatres. I would, therefore, ask the Minister to accept the other portion of Deputy O'Shaughnessy's amendment, if not on this Stage, on the next Stage.

Mr. JOHNSON

The Minister, I think, has taken the wording of Deputy O'Shaughnessy's amendment and refers to "competitions in the knowledge of the Irish language and in step-dancing or in either of them." I think I understand what is sought for and what the Minister's intention is, but I imagine he has not made himself acquainted with the practice of those agricultural shows. The competitions in question are not confined to the Irish language and step-dancing. Sometimes there are competitions in fiddling and piping, and I am not quite sure whether step-dancing would include the "Rinnce Mor" or the "Fairy Reel." I think it is too limited and that it is not meeting the case that the promoters of these competitions desire, which I think the Minister wishes to concede. I put that forward, but I do not know how it can be managed unless the Minister were to use some phrasing like that in the other amendment and speak of Irish dancing and music. I think this is too narrow, and it certainly is going to confine those competitions within limits that would destroy the beauty and value of them to a very great extent. If you are going to confine agricultural shows to competitions in the Irish language and step-dancing, you are narrowing it very much indeed.

Mr. BLYTHE

I would not like to accept any amendment of this amendment without consideration, because the entertainments tax is somewhat difficult to administer. The only thing I can say about this is, that it will relieve certain committees of responsibility for paying entertainments tax, and if this concession is not wide enough the matter can be considered further. But I would not like to take an amendment now and insert it in the Bill, because it might go further than we intended.

Mr. JOHNSON

Will the Minister examine the matter and arrange with one of his colleagues in the Seanad to move a recommendation?

Mr. BLYTHE

I have no colleagues in the Seanad.

Amendment agreed to.

AN CEANN COMHAIRLE

We have debated the matter dealt with in amendment 4 already, but as Deputy Johnson has put in £16 instead of £15, the amendment is in order.

Mr. JOHNSON

I move amendment 4:—

In page 6, before Section 14, to insert a new section as follows:—

"Sub-section (a) of Section 6 of the Third Schedule to the Finance Act, 1926, shall be amended as if there were added thereto the following paragraph:—

Any vehicle in respect of which it is shown to the satisfaction of the Minister for Local Government and Public Health that it has been manufactured by a firm which is at present engaged in manufacturing similar vehicles in Saorstát Eireann... £16."

My object in bringing forward the amendment is to meet the point of the Minister for Finance. His objection on a previous occasion was because the Minister for Local Government had objected. It did not affect his department so much as that of the Minister for Local Government. I was hoping the Minister for Local Government would have been present to hear the arguments in favour of the change. I think Deputy Good is on the right line, and if the Minister for Local Government were present to hear the case the Deputy made amplified, he might be convinced that there would have been an increase in the revenue if a concession of this kind were made. I think it is undoubtedly true that the motor-driving habit, like the tobacco habit, is one that grows. There are undoubtedly many hundreds, perhaps thousands, of people in the country who would be prepared to buy a cheap motor car second-hand if it could be brought within their means. Once having acquired the habit, all those that I have ever heard of or spoken to always liked to have a new car. Once the habit has been spread amongst a larger number of people, even the driving of an old car will lead in a very short time to a keenness of demand for a new car, and, as a matter of fact, the case made for Messrs. Ford will be strengthened. Anybody who has read the philosophy of Henry Ford will know that he largely bases his business credit upon this extension of the habit of riding in motor cars, and I think that the fact that you are able to increase the number of people who own cars and drive them, is certain to increase the demand for new cars, and, consequently, to increase the gross number of cars on the road.

The revenue of the Road Board would be increased if these old cars which are now lying up could be induced to come out and sun themselves during the summer months. The absence of the Minister for Local Government gives me very little hope that we can change the Minister for Finance but, perhaps, Deputy Good, if he were to enlarge on this subject, might call the Minister for Local Government from the nether regions and he would be able to hear the end of the argument and, even, the end of the argument would convince him. Perhaps the Minister for Finance would then gracefully concede the point.

Mr. GOOD

I am afraid that the amendment imposes limitations on me that would be difficult to get over. Deputy Johnson proposes to make this concession for only one make of car. There is practically only one type of car made in the Free State at present. If one could get the Minister to agree to the principle underlying this amendment and apply it generally we would achieve some useful purpose. Since the matter was last before the Dáil it has been pointed out to me that a number of old cars, by reason of the high licence duty, are taken out only for a few months and, instead of the Minister getting, as he might get, a substantial tax for the whole period he is getting a reduced tax for a limited period. With a much wider outlook than that which the Minister has brought to bear on this problem, I am satisfied that there would be a much improved revenue from this particular tax. If a man sells an old car it enables him to get a new car and to pay the tax. In that case there would be two cars running with both paying the tax instead of as at present, only one car running for a portion of the year and paying a limited tax. If the Minister could inquire into the problem I am sure he would find that a much larger income would be derived from a relaxation of this tax on old cars.

Mr. BLYTHE

I have nothing much to add to what I said on the matter in Committee except that, on looking further into this amendment, we found objections to the form of it and to the effects that it would have. If it were passed it would undoubtedly lead to the importation of a considerable number of old Ford cars from across the Border which have at present to pay a tax of £23. If they had to pay only £16 it would in many cases be advantageous to send them in here. It is extremely likely if this amendment were adopted that everyone on the other side of the Border with an old Ford car would try and dispose of it here, and the consequence would be that the object we had in view by reducing the tax on Ford cars manufactured here to £10 would be defeated. Even if that were not to happen, if we made certain important changes in the amendment, we would still be defeating the object which we had in view. I would not for a moment consider the suggestion of Deputy Good, because if it were adopted, the loss to the Road Fund would be very heavy. Even if it were confined to Ford cars, there would be a big loss, but there would be a much bigger loss if it were given in respect of every vehicle. If we had not this check we would find that this country would become a dumping ground for second-hand cars, and I do not think that that would be advantageous.

Mr. GOREY

I think that the Minister's apprehensions in this matter are not well founded. It is, of course, possible that what he suggests could happen but it is not at all probable. He thinks apparently that there is something in his mind which is really not there at all. There are a whole lot of these second-hand cars lying idle in the country and if they could be disposed of new cars would be bought. The Minister is really shutting his eyes to something that exists.

Mr. GOOD

Would the Minister undertake to consider the problem as it is becoming a serious one?

Mr. BLYTHE

There are two problems. There is the problem of the old Ford car, which might be got over if you had a particular type of amendment. There is also the problem of old cars generally, which should not be touched, as it would mean a serious loss to the Road Board. The problem of the old Ford car, taken by itself, might be dealt with, but that would not be done satisfactorily by this amendment. The main problem should not be considered for a moment.

Mr. GOREY

Cars in excess of ten years old?

Mr. BLYTHE

No. I think they should be scrapped or disposed of. I do not think that we should deplete the Road Fund in that way.

Sir JAMES CRAIG

You cannot dispose of old cars at present. I have an old car which I want to dispose of and for which I am paying no tax. I want to get a new car. I cannot even get £30 for it, although it has tyres, wheels and everything else.

Mr. BLYTHE

Cumann na nGaedheal might buy it for election purposes.

Sir JAMES CRAIG

I would give it to them for £20 for election purposes.

Amendment put and negatived.

Mr. JOHNSON

I move:—

In page 7, before Section 18, to insert a new section as follows:—

Sub-section (2) of Section 38 of the Finance Act, 1926, shall be amended by the deletion of the words "less than £3 and is" from the exemption comprised in that sub-section.

This amendment is put forward in the hope of being able to persuade the Minister to go a little further than he went last year. This question of the stamp duty imposed on men drawing weekly wages has been the subject of discussion for a couple of years back, and, as it was argued last year, a man in receipt of weekly pay of £2, £2 5s. or £2 10s. was paying a tax, if he were employed in a Government office, of 8/8 a year, which no other man in similar employment was paying. The Minister, in response to representations, raised the sum to £3, so that at present any man in receipt of a weekly wage of £3 is paying this tax of 8/8 a year. That, as I say, is only applicable in the case of an employee receiving that wage in a Government office. The object of the amendment is to remove any limit in respect of wages or salary. I had hoped that the leader of the new Abstentionists would have been present to add his voice to this appeal in view of the success of his agitation in respect of the cider duty. It is pleading for a small concession. It is a concession that will not cost a great deal, and it will, undoubtedly, remove a sense of discrimination in the matter of this tax against public servants. It is nominally applicable to all wage-earners, but, in practice, no other wage-earner, except those paid out of Government funds, pays it. It is with that object I am asking the Minister to accept the amendment and remove this little irritation.

Mr. BLYTHE

As the Deputy is aware, I have a certain amount of sympathy with this amendment, but I do not think that it is quite right to compare it with the remission of the cider duty. By remitting that duty we only lost £80 per annum, but this particular concession on the estimate I had before me would cost between £8,000 and £10,000 or even more. These stamps are ordinary postage stamps and are bought in post offices, and it is very difficult to frame an estimate of the revenue obtained. Various estimates have been made on different bases, and they vary as to the loss that would follow the adoption of the amendment. They vary from £7,000 almost up to £15,000. I think it is quite likely that it might result in a loss of, say, £10,000, and while it is true that the great bulk of the revenue obtained by maintaining the present position comes from civil servants it is also a fact that civil servants have certain advantages over weekly wage earners in other classes of employment. It is, consequently, less of a hardship on them to pay this twopence than it would be if we had one particular group of private employees paying it, and if other groups with a different system of payment escaped it.

Amendment put and negatived.

Question—"That the Bill, as amended, be received for final consideration"—put and agreed to.

Mr. BLYTHE

I move "That the Bill do now pass."

Question put and agreed to.

AN CEANN COMHAIRLE

This Bill is a Money Bill for the purposes of Article 35 of the Constitution.