I beg to move amendment 6:—
To add at the end of sub-section (3) the words—
"Provided always that no Income Tax, Corporation Profits Tax, Surtax or Excess Profits Duty shall be assessed, levied, or collected in respect of any income or profits in any accounting period prior to that beginning on 6th day of December, 1922."
Amendment 8 is a corollary to that. Amendment 6 provides that no taxes are to be levied or collected in respect of any period prior to that beginning on the 6th December, 1922. First of all, no person should be made amenable to penalties in respect of anything which may have occurred prior to that period. Up to the present moment persons have been liable to penalties in respect of certain wrongful returns which they may have made during that period or subsequent to that date or because of wrongful declarations which they may have made prior to that date. We propose that in the case of "any person who, on or before the 1st January, 1931, submits amended declarations showing their income from such investments for the three accounting periods prior to the 5th day of April, 1931, no proceedings for any penalties or otherwise shall be taken against such a person making such amended declaration in respect of any non-disclosure contained in any declaration made by such person prior to the making of such amended declaration, but the person making such amended declaration shall be liable for any arrears of income tax or surtax, and only for such arrears which may appear from such amended declaration to be due by such person for the said three accounting periods."
What I have to say in support of this amendment has been argued already before the Minister. I am sure most members of the House are familiar with the situation which has been created in this country by the efforts of the Revenue Commissioners to collect, particularly in the case of excess profits, moneys which should have been paid to the British prior to 1921-22. The position is that taxpayers to-day are being asked, first of all, to pay taxes not paid to the British Government; secondly, they are asked to pay interest on such taxes from the date upon which they should have been paid to the British Government; and, thirdly, they are asked to pay penalties for not having made returns in their proper time of their full income to the British Government. The important factor in connection with all this which the House ought to remember, and which the Minister for Finance should take into consideration, is that in 1919 practically every income tax office in the country was destroyed by order—notwithstanding anything the Minister may say to the contrary—of the Irish Republican Army. Every man who destroyed such an office was guilty of a crime against the then existing British law in this country, but practically every person who engaged in that physical act of destruction has since been exempted from penalties or proceedings by the various Amnesty Acts. But the people who broke the British revenue laws in this country, particularly those relating to excess profits, are still, I think, being visited with penalties and threatened with proceedings by the Minister.
In connection, first of all, with the excess profits duty, I have to refer the Minister to the report of the Revenue Commissioners, in which they say that they cannot make further assessments for excess profits duty unless, in their opinion, there has been fraud or wilful neglect on the part of the taxpayer. That is quite emphatic and very definite. It means that the only cases in which the Revenue Commissioners are now assessing is where, in their opinion. Irish taxpayers have been guilty of fraud or neglect. Fraud upon whom? Not upon Saorstát Eireann, but upon the British Government, because the excess profits duty, I believe, officially ended in August, 1921, long before the Free State was established and the Government came into office. The point is that taxpayers are now being visited with pains and penalties because they did not pay excess profits duty to the British Government. Whether or not there was an official declaration that the people should not pay these taxes, at any rate, there was a very general understanding that they should not be paid where it was possible to avoid paying them. It was only in circumstances where a man's business or fortune might be jeopardised by the non-payment of income tax that the payment of such income tax was connived or winked at by those responsible for guiding the Republican movement at the time.
I referred last night in my speech to the methods adopted by the Revenue Commissioners. I am informed that the real reason why these threats of penalties are held up to the taxpayer is, not so much that arrears of income tax may be collected, but that the taxpayer may offer to permit the Revenue Commissioners, in lieu of penalties with which he is threatened, to make such an extended investigation into his affairs as will permit them to come to a conclusion as to what he should have paid by way of excess profits duty to the British Government, and as to what he actually paid, and to endeavour to collect from him, not only the duty, but also the penalties for the non-payment. I think that on the facts as I have related them, and as the excess profits duty ended finally in August, 1921, before the establishment of this State, the part of this amendment which relates to excess profits duty must be acceptable to the House and does not require any further argument to justify it. So that whatever the Minister may have to say in regard to income tax, I certainly think that he has not a leg to stand upon so far as excess profits duty is concerned and that the amendment, so far as it relates to that duty should be acceptable to him.
In the case of the people who made wrongful returns to the British authorities in 1922 in relation to income tax, I think that what I have said in regard to excess profits duty largely applies also. Again, you had the same circumstances: the destruction of the income tax offices, the wholesale interference with the machinery for the collection of the tax, the general belief fostered and encouraged by those who were responsible for guiding the Republican movement at the time, that it was an unpatriotic thing to pay duty or tax to the British Government whenever that could be avoided without involving the person who failed to pay in undue consequences or penalties. In view of these facts, I think we must come to the conclusion that it is scarcely justifiable for us, even after the Treaty, to become income tax collectors for the British Government. The British ceded their claim upon the taxes, and the Minister comes along some years later and tries to collect the taxes in virtue of that cession. But the circumstances have altogether changed. The economic circumstances of the individuals who are called upon to pay the taxes are not at all comparable with their circumstances prior to 1921 or 1922. Some men who were affluent between 1914 and 1922 are in comparative poverty to-day. There must be some equity in the matter, and certainly, since we did connive at the non-payment of taxes prior to 1921, I do not think that we are entitled to come six or seven years later and try to exact our pound of flesh, even though we did make a bargain with the British whereby our profits would be derived from the pound of flesh, and from no other source whatever.
Whether it is expedient, even from the point of view of revenue, to endeavour to collect these taxes, is a matter that is capable of argument. Many men, warned by the fate of their neighbours, knowing what worry is in store for them, have placed their funds abroad. A considerable amount, I am informed by those who are in a position to judge—by bank managers and others in similar capacities—of Irish money is on deposit abroad in British banks. The country receives practically no benefit from that. I do not believe one-tenth of the interest upon the deposits ever comes home, because it is difficult to get it home, and when one has it, it is difficult to employ it here. The money is lying there in British banks financing British industry, when it ought to be and could be employed with much better advantage in this country. As well as that, on the income that it earns, small and all as it is, the Minister receives no return—he gets nothing. The Exchequer which benefits from the income earned by these Irish moneys is the British Exchequer, not the Irish Exchequer. On the whole, if a balance were struck, it will be found that this country has lost rather than gained. Even taking the narrowest and the nearest point of view which the Minister can take regarding his own immediate difficulties, and giving no thought whatever to the future, I believe that, looking at the question in that way, and striking a balance, it will be found that on the whole the Minister has lost by the proceedings which he has adopted to collect this revenue.
We think that the time has come to end that. We think it is no longer profitable, even for the Minister, to continue these proceedings. It certainly is not profitable to the taxpayer. There are many men in the country to-day incapable of attending to their business because of the worry which they have suffered at the hands of the Commissioners and of the Minister in their attempts to collect these taxes or to force the disclosure on the part of these men of the assets which they have abroad. As well as that, the Minister himself, not only in his last Budget statement, but in the preceding one, admitted that the well of arrears has run dry. That simply means that they have, so far as any attempt to discover these assets are concerned, come to the end of their tether. Notwithstanding all the extraordinary measures taken to locate Irish property and investments abroad, the Minister has now come to the last bone in the cupboard. There is nothing, at any rate, that his agents can discover. He has nothing further to gain from continuing the proceedings which he has adopted during the past five or six years. Therefore we say that, since any further proceedings are likely to be fruitless, the time has come when he might possibly change his methods. If he does change his methods and gives to these people, who are at present living admittedly an uneasy life, the chance and the opportunity to make a full disclosure, they will possibly be glad to avail of that. When that full disclosure is made there will be available for the Minister a much larger taxable income than he has been able to make available to himself by the methods adopted up to the present. That is the great justification which we are advancing in support of these amendments. If the Minister will accept the principle of them, and will agree that, in justice and in equity, he has no right to attempt to collect income tax, corporation tax, sur-tax or excess profits duty in respect of any accounting period prior to 6th December, 1922, and then goes further, and says to these individuals, many of whom have been driven into wrong-doing by his attempt to collect taxes in respect of the period prior to 1922, that provided they make a full disclosure a full and complete amnesty will be granted for all the periods, and that he will only ask them to pay tax in respect of the three accounting years prior to 5th April, 1931, those who are now worried and harassed to death will be glad of the opportunity which the Minister will present to them to make a full disclosure, to set themselves right with the Commissioners, and to attend to their business unworried and unharassed.
I believe that the effect of that will be that there will be, first of all, made available for the use of industry in this country huge sums, possibly five or six millions, of Irish money at present concealed in Great Britain. There will be made available that capital sum for the use of Irish industry and, as well as that, there will be made available for the Minister, for the purpose of assessing income tax, the income which that sum would earn. That cannot be an inconsiderable sum. The Minister will, as well as that, for the first time have an accurate figure as to the amount of Irish capital which is returning an investment income, and upon that basis the revenue, instead of being losers by the proposals which we submit, will be ultimately gainers—not only the revenue but, of course, the citizens as a whole. It is because we believe that the citizens as a whole will be ultimately the gainers if these amendments which we propose are adopted, that we are proposing them, and not because we are concerned about any person who has been guilty of wilful fraud, who has been driven into fraud by courses over which he has had full and complete control, whose fraud has not been occasioned by the particular and peculiar circumstances which existed prior to 1921-22. We propose the amendments because we think that if they are adopted the State and the community as a whole will be benefited by them.