Dáil Éireann debate -
Friday, 9 Nov 1928

Vol. 26 No. 15

IN COMMITTEE ON FINANCE. - VOTE 6.—OFFICE OF THE REVENUE COMMISSIONERS.

Mr. BLYTHE

I beg to move:

Go ndeontar suim ná raghaidh thar £221,550 chun slánuithe na suime is gá chun íoctha an Mhuirir a thioctidh chun bheith iníoctha i rith na bliana dar críoch an 31adh lá de Mhárta, 1929, chun Tuarastail agus Costaisí Oifig na gCoimisinéirí Ioncuim, maraon le Seirbhísí áirithe eile atá fé riara na hoifige sin.

That a sum not exceeding £221,550 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1929, for the Salaries and Expenses of the Office of the Revenue Commissioners, including certain other Services administered by that Office.

There is a decrease shown in this Vote. A large proportion of that decrease is, as in other cases, due to the fall in the bonus. As Deputies are aware, in addition to the actual collection of excise and customs and excise duties and inland revenue, the Office of the Revenue Commissioners is responsible for a great deal of other work. For instance, the heaviest part of the old age pensions work is done by officers of the Revenue Commissioners. The Office also manufactures stamps for the Post Office and for the National Health Commissioners. It prints postal orders, postal drafts and old age pension orders. The Custom side of the staff has numerous duties in connection with importation. It prevents the importation of drugs of various kinds, various kinds of obscene literature, and a large number of goods of that sort. They also have duties under the Merchandise Marks Act, and they have duties in connection with the enforcement of health and quarantine regulations, the custody and the disposal of wrecks, and the registration of ships and fishing boats. They have engagements also in regard to seamen. In addition there is the collection of harbour dues in certain places.

Mr. MacENTEE

In connection with this Vote, there is a matter to which I think the attention of the Dáil should be brought. I think that last year there was a Bill introduced to empower the Revenue Commissioners to procure lists of names of depositors in the banks. This Bill was before the Dáil and was rejected by this House.

Mr. BLYTHE

No.

Mr. MacENTEE

At least there was a proposal in it, at any rate, that for the purpose of income-tax assessment the Revenue Commissioners should have power to inspect the books of certain banks.

Mr. BLYTHE

It did not get the length of being a Bill.

Mr. MacENTEE

At any rate, the proposal met with such opposition in the House that the Government did not introduce it as a legislative proposal. In consequence of the fears which were raised at that particular period, a considerable amount of money, I think, was removed from the Irish banks and deposited abroad. Notwithstanding, however, the fact that the House viewed the proposal or suggestion with great disfavour, so much so that the Minister abandoned any hope of getting a Bill through to enforce it——

Mr. BLYTHE

I do not like to interrupt the Deputy, but there was no proposal from the Government for a Bill for that purpose. As far as I remember, when the Statistical Bill was introduced, some sort of a ramp in connection with this matter was brought up, and it was represented that under the Statistical Bill this might have been done, or it was represented that it might be the intention of the Government to use the powers of the Bill for the purpose; but there was no proposal from the Government to do this.

Mr. MacENTEE

At any rate, notwithstanding the general disfavour with which this proposal would be viewed, a number of income-tax payers have this year received assessments for income-tax, as well as assessments for income-tax for the last four or five years. Upon inquiry they have been informed that such assessment was made in respect of interest accruing upon deposits which they had in the bank. When they informed the inspector that they had no money on deposit in the banks, the inspector told them that they would have to supply him with a certificate from the bank to that effect. Now supposing they furnished the inspector with a certificate from one bank, setting out that they have no money on deposit in that particular bank, it would be open to the inspector to compel the persons assessed to furnish him with a certificate from another bank and another bank and still another bank, until the whole list had been exhausted. This would be practically equivalent to compelling the banks to disclose to the inspector the state of that man's account and his relations with them—a proposal which this House does not view with favour. I suggest that the attitude of the Revenue Commissioners in that regard should be reconsidered.

There is another matter that I think the Revenue Commissioners ought to take into consideration and that is whether it would not be possible to reduce the cost of collecting the revenue. The cost of collection here represents a much larger percentage of the total revenue collected than in Great Britain. At the moment I have not the exact figures, but I go so far as to say that it represents almost twice as much. That may be to a certain extent explained by the fact that we are a very thinly populated country, that a large portion of our revenue service has been hurriedly built up, and that its organisation has not yet reached its maximum of efficiency; but, nevertheless, I think that if we overhaul the old machinery which has been taken over we will possibly be able to secure such economies as would make the cost of collection assume the same proportion to the revenue collected as it does in Great Britain. In that connection, I think that some attention ought to be given to the question of the machinery for collecting and assessing income-tax. I believe that in that Department a considerable amount of duplicating and re-duplicating forms is done which could be abolished. The whole machinery might be simplified. It is quite possible that that might make it difficult to operate the double income-tax agreement with Great Britain. I am not sure.

Mr. BLYTHE

No.

Mr. MacENTEE

The Minister says no. That is an additional reason why this question of income tax collection and assessment ought to be immediately overhauled with a view to simplifying it if possible. There is then the question of assessing the same individual in respect of his liability under different schedules. I think if one assessment were made upon the individual that that would lead to certain economies and would make it much simpler from the point of view of the individual and would save a good deal of his time.

There is the question then of the income tax paid by such companies as Guinness and Company, the Great Northern Railway, and some assurance and banking companies for the three years from 1923 to 1926. The Revenue Commissioners in this matter took the view that, as the companies are registered in England but are earning profits in Ireland, the Irish tax paid by them on their Irish earned profits cannot be recovered from the Revenue Commissioners by individual shareholders in Ireland who are entitled to exemption or abatement. They base this view on the contention that the company keeping books does not do so on behalf of the individual shareholders who ultimately receive the profits, less tax, in the shape of dividends. They do not carry this theory so far as to assess shareholders whose incomes are above the exemption allowance, as they were precluded from doing so by the decision in the case of Gilbert versus Ferguson. It is quite clear that these courses are inconsistent. If the small income-tax payer cannot recover amounts which have already been deducted from his dividends in respect of income tax payable by the company, then clearly the Revenue Commissioners are entitled to recover from the larger income-tax payers income tax in respect of the dividends received from the companies. The two things are inconsistent. Either the small income-tax payer is entitled to recover from the Revenue Commissioners income-tax which the company has paid on his behalf, or else the Revenue Commissioners are entitled to hold that as the small income-tax payer has been held not to have paid income-tax in respect of the dividends he has received, that the large income-tax payer is in exactly the same position.

I understand that the attitude which has been taken up by the Revenue Commissioners in this matter is more or less an equivocal one. When the large shareholder or income-tax payer has been asked to pay income-tax in respect of the dividends he has received the Revenue Commissioners have not pressed the point, but have got out of the difficulty by making a concession and permitting him to retain his income-tax. They have made no concession to the small income-tax payer. That position ought to be cleared up and the matter regularised.

Progress ordered to be reported.

The Dáil went out of Committee.

Progress reported, the Committee to sit again on Wednesday next.