Additional Financial Motions by the Minister for Finance. - Finance Bill, 1932—Committee.

1.—(1) Income tax shall be charged for the year beginning on the 6th day of April, 1932, at the rate of five shillings in the pound.
(2) Sur-tax for the year beginning on the 6th day of April, 1932, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates as those at which it is charged for the year beginning on the 6th day of April, 1931.
(3) The several statutory and other provisions which were in force during the year beginning on the 6th day of April, 1931, in relation to income tax and sur-tax and also the provisions of this Act in relation to the sur-tax for that year shall, subject to the other provisions of this Act, have effect in relation to the income tax and sur-tax to be charged as aforesaid for the year beginning on the 6th day of April, 1932.
The following amendments stood in the name of Deputy Cosgrave:—
In sub-section (1), line 17, to delete the words "five shillings" and substitute the words "three shillings and sixpence."
To delete sub-sections (2) and (3) and substitute therefor the following:—
"(2) Sur-tax shall be charged for the year beginning on the 6th day of April, 1932, at the same rates as those at which it was charged for the year beginning on the 6th day of April, 1931."

If I am permitted, I will discuss amendments 1 and 2 together, expecting that the same fate will befall the one as the other. The House has already listened to a discussion upon this matter and I presume that the majority, made up of the two Parties opposite, will vote down these amendments. In my view an alteration of the income tax from 3/6 in the £ to 5/- and an alteration and increase in the super-tax will mean more unemployment in this country and more uncertainty than perhaps any other clause in the Finance Bill taken by itself. I do not propose to detain the House at any length in connection with this matter.

The policy adopted by the late administration was one to attract industrial concerns and wealthy persons to live in this country. Out of this, or from this system, employment of one sort or another was obtained. Income tax and ordinary taxation were also obtained which it is quite possible, although I hope it will not happen, may be lost to the country by reason of the policy of those now in charge of the Government. And this charge, in addition to the impost known as corporation profits tax, which has been increased in this measure, puts the position of the ordinary shareholder in any of the concerns affected in a relatively worse position than either shareholders or taxpayers in other countries. This is considered to be good business, but I must certainly object to being included in the numbers of those who say so, and accordingly I move the amendments standing on the Paper in my name.

I do not know whether the Minister is prepared to give any consideration to the situation that arises in relation to income tax in consequence of this Budget. It is not merely that the income tax is raised to 5/- in the £, but another tax, almost the same as the income tax— in fact another tax that is merely a particular sort of income tax—is also in existence, so raising the total income tax paid by members of commercial concerns to 6/6 in the £. There would not be as strong a case as there now is for moving a reduction of the income tax to 3/6 in the £ if the corporation profits tax was not in existence. If the Minister were prepared to state that he would accept an amendment to remove the corporation profits tax, then one would regard it as unnecessary, in all the circumstances, to press, to the same extent, for this amendment, though even if there were no corporation profits tax there would be a case for a reduction of the income tax below the level to which the Minister proposes to bring it. There is a great deal to be gained in this country, owing to the peculiar circumstances that exist, by having our income tax lower than the income tax in Great Britain. There is a great deal to be lost by having the income tax, as it is now, virtually substantially, higher than in Great Britain.

There are people who have settled, or remained, in this country because we had a lower level of income tax. It was not merely that the Exchequer gained 3/- or 3/6 in the £ as the result of these people making their residence here but the country, and the people engaged in trade and commerce, and people seeking employment, gained to the extent of the other 17/- or 16/6 in the £. It would be possible for the Minister by adjustment in this particular Budget if he wants to spend all the money it is proposed to raise by the Budget—and I do not think it is necessary—to accept this amendment and without increasing the burden that will fall upon the consumer in consequence of indirect taxation, so to adjust that indirect taxation as to get sufficient revenue to meet his needs. I think it would show much more foresight, and that it would be a much wiser thing and a more beneficial thing for the country if the Minister would make these adjustments. He would obtain all the advantages out of what we have been accustomed to regard as national wealth. We hear a great deal of talk about Irish capital but the Minister knows that Irish capital means neither more nor less than capital owned by people who live here. If by a taxation policy such as we have in this Budget the Minister drives the people who own capital out of the country, that capital will cease to be Irish or Saorstát capital. There is no doubt whatever that the policy enshrined in this Budget will have the effect of causing a loss to this country of very substantial sums of capital and of substantial revenue derived from that capital. Although we are aware that the money goes into the Exchequer it is lost in the long run, if, in consequence, we are going to have people, who are seeking employment, suffer.

If the Minister lowered income tax and lowered the number of his customs duties, what he lost in revenue by a reduction of the income tax he would gain by an increased revenue from various of his customs duties. He would produce an industrial development that would be sounder. He would get a much greater amount of employment, because if there was some failure to get it in one direction there would be an avoidance of unemployment that is going to be caused by the income tax. This high income tax, this sharp increase in the income tax, is particularly serious in circumstances like the present. It is particularly hard to bear, and its reactions on the general public are going to be felt much more immediately. If incomes were rising, if dividends were increasing, people called upon to pay increased amounts of income tax could pay them without being obliged to reduce their purchases, or to reduce the amount of employment which they directly give. But, here we have incomes falling, and people who were charged up to last year three shillings, and last year 3/6, are now going to have to pay 5/- on incomes calculated on a basis higher than the amount of income they will actually receive this year. That is a hardship which we can consider not so much in relation to the people who pay the income tax, but in relation to the people who do not pay it. Because there is going to be a tremendous amount of unemployment. It will not come suddenly, like the closing down of some big factory as a result of something in the Budget. It will come by degrees—by one person being discharged here and another being discharged there, by one shop limiting its staff this week, and another limiting its staff somewhere else next week, by one gardener being discharged this week, by a garage being obliged to let some hand go next week. If the Minister is determined to spend this greatly increased sum this year, if he is determined that the amount was insufficient last year which he and others with him denounced as being too high, if he is out to get all the revenue he can, and says it must be increased, he can procure that revenue in a way that will do less damage to the country, that will be much better in its net effect on the position of employment, and result in such industrial advance as may take place along much sounder lines.

I think the Minister ought to accept this amendment and, at least, if he will not, that he should say that in determining to continue the income tax of 5/- in the £ he is prepared to remit the corporation profits tax, that he is not going to put this position before everybody who is contemplating new industrial enterprise here: that whereas in England the biggest and most prosperous concern has to pay no more than 5/- in the £ on profits, a much more modest concern here will have to pay 6/6 or, in certain cases, 7/-.

I should like to reply to what has been said. It is quite obvious that Deputy Cosgrave's anxiety not to waste the time of the House was, I am afraid, largely conditioned by the fact that the two amendments were indefensible. To put down an amendment where in the present circumstances £3,500,000 is required which would involve the Exchequer in a loss in the current year of at least £1,000,000 and in a normal year of £1,500,000 was, I think, while the Deputy was quite willing to put it down, a matter which he realised was beyond his capacity to defend. The alternative offered by Deputy Blythe is in no better position. To repeal the corporation profits tax altogether, which I gather was the suggestion, would cost the Exchequer another £450,000, would involve the reimposition of the duty on sugar, or possibly even a further increase in the duty on tea. The question which the House will have to consider is whether in the present circumstances in which we find ourselves, it is more equitable, since burdens have to be imposed, to put those burdens on the shoulders of those best able to bear them, and since the corporation profits tax would only fall upon the wealthier people in this country, and since there are practically no people to pay income tax at the full rate, the Deputy knows that 5/- is merely a nominal rate of income tax, that the actual rate of the average person would be much less than that. At any rate, we feel that those people who can best shoulder the burdens, particularly the burden of the social services of the State, should help us to meet the Exchequer deficit rather than that the majority of the poorer citizens, the people who are living just on the subsistence line, should have to find that £1,500,000. That is the justification which the Government offers to the House for rejecting the amendments offered by Deputy Cosgrave and Deputy Blythe.

The other suggestion is that we should reduce the income tax and also reduce the protection duties imposed by this Bill. The Deputy says that we would get more money for the Exchequer. Undoubtedly. But we would also have increased unemployment in this country. We would have more money and increased unemployment under the suggestion he has put forward. We want the money, but we also want employment, and for that reason I will have to ask the House to reject the amendments.

The Minister rather suggested, in alluding to the people whom the income tax will mainly concern, that in his opinion there was practically an illimitable fund at their disposal which he could commandeer. Every citizen in the State knows that the income of these people and even their very capital has gone down to such an extent that probably even at the 5/- rate the Minister would be unable to collect the sum he proposes to collect if it were not for the fact that, in practice at any rate, these people will be levied, or an income tax assessed, not on their earnings this year but on their earnings of the past year. In the light of falling profits in industry and smaller incomes from investments, this tax of 5/- is unjust. When properly calculated it is really greater than 5/-, because it will not be assessed on incomes derived from this year's investments but on incomes covering a period when there was a much greater return from investments.

The Minister did not refer to the consequences the increased income tax would have on sections of the community outside the people whom it directly hits. In the course of the Budget debate the Minister dared any of us to give evidence that there was a lessening of employment by the people with larger incomes as a result of the increase in income tax and by reason of the other taxes that were imposed. Every Deputy, whether on the Government side or on this side, can, if he is honest, give the Minister scores of examples of reduced employment and reductions in wages as a direct consequence of the increased burthen imposed on people with large incomes. In my own constituency I could cite ten or fifteen instances of men with large incomes who have been compelled, within the last six or seven weeks, to reduce the number of their employees by from five to ten per cent. and to reduce the wages of the remaining employees by ten or fifteen per cent. One cannot compute the financial loss to employed people as a result of this tax; it must be a colossal sum.

The Minister said that this year he would lose a million if the amendment was accepted. I suggest that the loss to people employed and others affected—outside the people who will actually have to pay the tax—will extend to much more than one million. The Minister said this amendment is indefensible. In the light of the existing depression, not only in this country but in the countries from which many of our rich people derive their incomes, this increased tax is really iniquitous. It will have an adverse effect on industry generally, on the number of employed people in various industries and on the keeping of capital in the country. Many people who hitherto spent their incomes here, incomes derived in the main from outside sources, will be compelled to seek out places where they will not be mulcted so heavily. There is ample evidence of that to-day. Take, as an example, the rich people who used to hunt packs of hounds. If the Minister cares to read any sporting paper he will likely enough see advertisements relating to masterships of hounds. Up to this year it was comparatively easy to induce a rich man from America or England to take over control of hounds in a county and that man might spend anything from £1,000 to £5,000 a year on the maintenance of the pack. At the moment it is impossible to induce any person of independent means to come here because of the increased taxation which the Minister demands. We have numerous instances of people with capital departing for other countries or refusing to take up residence here. What the Minister loses in the swings he may gain on the roundabouts and I think it is not unreasonable to ask him to accept Deputy Cosgrave's amendment. I suggest that he should reconsider the whole matter.

At a very early stage of the Budget debate one Deputy announced that so far as he was concerned he judged it to its detriment because it seemed to him it ran upon two bad and vicious principles. One principle was economic nationalism and the other was the principle that a Government can spend people's money better than the people can spend it themselves. It is the second of the principles which comes into operation mainly upon this Resolution. There is going to be waste associated with the collection of this very big increase in the income tax. There is going to be a terrific burden put upon a relatively small number of people, a number which I enumerated previously, for the purpose of income tax and super-tax payments, as not exceeding 100,000 people. I asked the Minister if he realised that many of those 100,000 people would leave this country if they considered that the burdens imposed upon them were becoming intolerable. I asked him, further, had he considered the reactions of income-tax in relation to the life of the community and how those people who can pass it on will pass it on. I pointed out that, in the main, there are three categories of people who pay income tax and that numbers of those people can pass the tax on.

It was forcibly argued by the author of the no-income tax campaign in the country, who now supports the Minister, that income tax was passed on, should be passed on. It is quite clear that to a certain degree there will be successive passings-on until you get to the people who cannot pass the tax on any further. These are the people who are in sheltered trades and the people who are in unsheltered business in the country—that is in agriculture. The whole weight of this is, in the main, going to come back upon two sections of the community. The Labour Party, through its representatives here—and they represent in the main the sheltered trades—have indicated that they are going to see that taxes and tariffs are not going to be passed on to them. If there is anything in the way of profit being made by reason of tariffs, they are going to see that they will get a share of the profit.

They are going to see that if their wages are cut down by reason of tariffs they will resent it and they are going to demand more where they can demand it. They can demand it where trades are well organised and are sheltered. There are two sections of the community which cannot pass on the tax. You have the unsheltered workers, the people in some sort of industrial occupation, not protected by a strong trade union built up here in the days when there was industrial organisation because this country was affiliated with England. Then there is the other section of the community which has no protection, the agricultural workers. These people are going to pay a very big amount of these taxes. The payment is going to be accompanied by waste in the collection and by waste in the employment of the money gathered.

The Minister said he might possibly lose one million. He can afford to lose a million. "Here is what the Fianna Fáil Government can do for you.""Send your cheques and postal orders, crossed, to the Honorary Treasurer of Fianna Fáil." I will simply allude to one thing, economy. Economy was promised all round. Listen to this, written by the Minister's advisers, or possibly written by himself, because the English is a little high falutin'. "Economy means the elimination of waste—the getting of 20/- value for every £ of the taxpayers' money spent on the public service. Fianna Fáil is satisfied that substantial economies are feasible without reducing social services, inflicting hardship on any class of Government servant, or impairing in the slightest degree the efficiency of the administrative machine."

The Minister has asked where is he to get the million pounds. Let him ask the people who wrote that advertisement where were they going to get, not one million pounds, but two million pounds; and let me say to the Minister for Industry and Commerce that he was not content with the advertisement and the small saving of two million pounds promised. He went a million further. A saving of three million pounds was what the Minister for Industry and Commerce promised. The Minister for Finance backed these two million pounds, and again I want the House to note the terms of the promise: Their "economies were not going to inflict hardship." It would have lost votes if there was any suggestion of inflicting hardship and that had to be prevented. Here is what the poster said: "Fianna Fáil is satisfied that substantial economies are feasible without reducing social services." Since I came into the House I heard the Minister speak of having to reduce the social services which we have if the income tax was not raised. Social services would have to be reduced if income tax was not raised. That was not in the Minister's mind in February this year. Then it was possible to find three million pounds by economies without reducing social services; without inflicting hardships on any class of public servants and without impairing in any degree the efficiency of the administrative machine.

Where were those three million economies gone? That is why people were asked to send their "cheques and postal orders, crossed," to the treasurers of the Fianna Fáil Party. This is what appeared under the heading of economy: "Here is what the Fianna Fáil Government can and will do for you." What is the Minister going to say to the people who think that their social services are to be lessened if he does not get an extra million this year out of income tax, an extra million which will be passed on to the very people for whose benefit the social services are to be maintained?

What has the Minister to say to them? "Here is what the Fianna Fáil Government can and will do for you. We are satisfied that it is possible to make substantial economies without reducing the social services." That was not precise enough. "It has examined with minute care the Estimates and it is convinced that savings of hundreds of thousands of pounds can be made; the burden of taxation can be lightened by no less than two million pounds a year." Give us our two million pounds economies. Let us have the two million pounds economies "without any reduction of social services and without inflicting any hardship on any class of the Government servants, or without impairing in any degree the efficiency of the administrative machine." Give us them, and we can have an amendment put down in Deputy Cosgrave's name, and expect more to come, more amendments in this Finance Bill, because the Minister himself has said that this would only make default in the income tax of one million pounds. But that is only 50 per cent. of what was promised in the advertisement, and only one-third of the sum that the Minister for Industry and Commerce promised. I do not want to urge this economy by a reduction of the social services, or by inflicting any hardship on any class of the Government servants, or by impairing in any way the administrative machine or making it less efficient. But two million pounds was promised while saving all these things. Let us have that two million pounds upon which so many crossed cheques and postal orders were obtained by the Fianna Fáil Party.

Question put: "That the words proposed to be deleted stand part of the Bill."
The Committee divided: Tá, 63; Níl, 44.

  • Aiken, Frank.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Blaney, Neal.
  • Boland, Gerald.
  • Boland, Patrick.
  • Bourke, Daniel.
  • Brady, Bryan.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Browne, William Frazer.
  • Carney, Frank.
  • Carty, Frank.
  • Clery, Micheál.
  • Colbert, James.
  • Corry, Martin John.
  • Crowley, Fred. Hugh.
  • Crowley, Tadhg.
  • Curran, Patrick Joseph.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Flynn, John.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Gibbons, Seán.
  • Gormley, Francis.
  • Gorry, Patrick Joseph.
  • Goulding, John.
  • Harris, Thomas.
  • Hogan, Patrick (Clare).
  • Humphreys, Francis.
  • Kelly, James Patrick.
  • Kennedy, Michael Joseph.
  • Keyes, Raphael Patrick.
  • Kilroy, Michael.
  • Lemass, Seán F.
  • Little, Patrick John.
  • Lynch, James B.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Maguire, Conor Alexander.
  • Moane, Edward.
  • Moore, Séamus.
  • Moylan, Seán.
  • Murphy, Patrick Stephen.
  • Norton, William.
  • O'Grady, Seán.
  • O'Kelly, Seán Thomas.
  • O'Rourke, Daniel.
  • Powell, Thomas P.
  • Rice, Edward.
  • Ruttledge, Patrick J.
  • Ryan, James.
  • Ryan, Robert.
  • Sexton, Martin.
  • Sheehy, Timothy.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Walsh, Richard.
  • Ward, Francis C. (Dr.).

Níl

  • Alton, Ernest Henry.
  • Anthony, Richard.
  • Beckett, James Walter.
  • Bennett, George Cecil.
  • Blythe, Ernest.
  • Brasier, Brooke.
  • Broderick, William Jos.
  • Brodrick, Seán.
  • Burke, Patrick.
  • Collins-O'Driscoll, Mrs. Margt.
  • Conlon, Martin.
  • Cosgrave, William T.
  • Craig, Sir James.
  • Davis, Michael.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar Seán.
  • Duggan, Edmund John.
  • Esmonde, Osmond Grattan.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Gorey, Denis John.
  • Hassett, John J.
  • Hayes, Michael.
  • Hennessy, Thomas.
  • Hennigan, John.
  • Hogan, Patrick (Galway).
  • Keating, John.
  • Kiersey, John.
  • Lynch, Finian.
  • McDonogh, Fred.
  • MacEoin, Seán.
  • McGilligan, Patrick.
  • Minch, Sydney B.
  • Murphy, James Edward.
  • Nally, Martin.
  • O'Brien, Eugene P.
  • O'Donovan, Timothy Joseph.
  • O'Higgins, Thomas Francis.
  • O'Leary, Daniel.
  • O'Mahoney, The.
  • O'Sullivan, John Marcus.
  • Reidy, James.
  • Roddy, Martin.
  • Thrift, William Edward.
Tellers:—Tá: Deputies G. Boland and Briscoe; Níl: Deputies Duggan and P.S. Doyle.
Question declared carried.
Amendment 2 not moved.
Section put and agreed to.
Section 2 put and agreed to.
SECTION 3.
(2) Sub-section (1) of Section 18 of the Finance Act, 1920, shall be construed and have effect as if the words "one hundred and twenty-five pounds" were substituted therein for the words "one hundred and thirty-five pounds."
(4) The following provision shall be substituted for Section 23 of the Finance Act, 1920, that is to say:—
"An individual who makes, in the manner prescribed by the Income Tax Acts, a claim in that behalf and makes a return in the prescribed form of his total income shall be entitled to be charged at half the standard rate of tax on the first one hundred pounds of his taxable income."
All references in the Finance Act, 1920, or any subsequent Act to the said Section 23 or to any sum mentioned in that section shall be construed and have effect subject and with due regard to the substitution effected by this sub-section.

I move amendment 3: "To delete sub-section (2)." I move the amendment in this simple form so as not to encounter the difficulties of drafting. As the Bill stands, as I understand it, the amount allowed to a widow with children or a widower with children is reduced to £125 in the same way as a bachelor. I move the amendment in the form in which it is restoring the £135 to all as a means of meeting that. If the Minister accepts the amendment, he can amend it, or if the amendment is passed, I presume he can further amend it, allowing bachelors only £125.

I will consider the point the Deputy made and see whether I can meet him on the Report Stage with regard to this. Of course, I cannot accept the amendment in its present form, and I am not prepared to say that I will accept it on the Report Stage, but I will seriously consider what the Deputy has said and see whether I can meet him. At the same time, I should like to point out that the changes in the allowances have to be taken and considered as a whole. Owing to the fact that there has been an increase in the earned income allowance, under our proposals a widow or widower, whose income is earned, will be in a better position, so long as the income does not exceed £450, than under the old scale of allowances. I take it the Deputy is not very greatly concerned with the widow or widower whose earned income does exceed £450.

The Minister in his Budget speech indicated that his object in reducing this was to increase the amount paid by bachelors, but this will also increase the payment by others.

Amendment, by leave, withdrawn.

I move amendment 4:—

To delete sub-section (4) and substitute therefor a new sub-section:—

The rate at which the first two hundred and twenty-five pounds of the taxable income of an individual shall be charged to income tax shall be half the standard rate of tax.

This amendment is designed to restore the same allowance that was made last year. While a good deal of play has been made in another place with regard to the difference between what is called earned and unearned income, it so happens that in the course of the last few years a person who is in an earning capacity is, I should say in the majority of cases, in a more advantageous position than a person who has been drawing dividends, which have been reduced very considerably, and in some cases have fallen away entirely. I need only instance one of the biggest industrial concerns in this country which was regarded as something very nearly approaching a gilt-edged security, and the reduced dividends from which have been a cause of very great hardship to a large number of people. The large sum of money involved in reducing the allowance to £100 is, in the case of persons such as these, a very real hardship and means that economies will have to be made in other directions, and that will result in a smaller circulation of money.

I am afraid I cannot accept this amendment. I give the usual reason, that we cannot afford it. It would cost £250,000 this year, and £400,000 in a full year.

What about all the economies which we were promised? I want again to refer to the advertisement which got Fianna Fáil into power in this country. The people of the country were asked at the elections to vote for Fianna Fáil. They were told a variety of things that this particular political Party if it became a Government proposed to do. Apart from all the wild and impossible things which were put down in regard to employment, tillage and everything else, a very definite thing was written about economy and lest the Minister may not have remembered what he did in his less sober moments in that particular matter, I propose to refresh his memory. The Minister in asking for subscriptions to the Fianna Fáil fund promised that economy was one of the matters which would be tackled by the Fianna Fáil Party if it became a Government. Certain phraseology was used in regard to economy which definitely was intended to delude the electors into the belief that the matter had been studied. It was not merely a vague, general promise of economy, something to say, that economy was the watchword and the slogan of the Party but phrases were used which were intended to give the impression that this question had been gone into in great detail and that certain conclusions were clear.

He even went further than that. There was not merely the promise of substantial savings which might have been made by any Party because economy is the watchword of every Party when it is in the wilderness. Phrases were used which were meant to indicate the directions in which economies were to be found and more particularly the directions in which economies were not to be found. May I take this first—Fianna Fáil were not going to reduce the social services, Fianna Fáil were not going to inflict any hardships on any class of Government servants, and Fianna Fáil did not intend to impair in the slightest degree the efficiency of the administrative machine. Yet, without doing any of these things, the advertisement was intended to give the impression that thought had been devoted to the matter and that certain conclusions had been arrived at which would be put into effect when Fianna Fáil came into office. "Economy means the elimination of waste." What does that mean, it not this, that Fianna Fáil had discovered that there was waste?

It went on to be more precise—"the getting of 20/- value for every £ of the taxpayers' money spent on the public service." That tied the Party to economy in the public service. Then after making the promises to which I have alluded, that there were three things not to be touched, namely, no reduction in social services, no infliction of hardships on Government servants or no impairing of the administrative machine, they went on to say that they were satisfied that substantial economies were feasible without doing any of these things. The words "substantial economies" might again be a phrase that could be used by any political Party struggling to get into power. It may mean something or nothing. It is a relative term. It is not very objective. A Government might come in and reduce taxation or reduce expenditure on public services by £50,000 or £100,000 and express itself as satisfied that substantial economies had been achieved, but this advertisement went further. The word "substantial" was not left in the air. Substantial economies were feasible and, we were told in the final sentence of the advertisement: "The burden of taxation can be lightened by not less than £2,000,000 per annum." Again, I say these phrases are precise and were meant to indicate that the conclusions were clear and obvious. There would be room for a Party to quibble in regard to the word "about" if it had been used. The word "about" would mean something approximate, but here we have the statement "not less than £2,000,000." That was certainly put forward to give the idea that something more would be done. That, at any rate, is how I analyse it.

Would the Deputy now bring his arguments into relation with the amendment?

I bring it in relation to the Minister's own answer to the amendment, namely, that he could not afford it. If that is his only answer I shall put this forward and wait for a further answer.

Read it again for then-th time.

It will be more than then-th time before the Finance Bill goes through if the Minister says he cannot afford it. On every occasion on which he says that he cannot afford it, this is the answer to that particular plea. The phrase was used that economies could be achieved, that the economies would be substantial, and that these substantial economies amounted to a figure of £2,000,000. The promise was held out to the people that something more than £2,000,000 per annum would be given to them. It is even more precise than that, because the advertisement runs: “It has examined the supply services”—suggesting that there had been detailed examination. It goes further and it says: “It has examined with minute care the estimates of supply services for the current year, and is convinced that a saving of many hundred thousand pounds can be made.” Then there is a certain other matter into which I will not go for the moment. The statement “a saving of many hundred thousand pounds” is a phrase in regard to which there might be room to quibble later on. I could see the Minister in other circumstances saying they could not save very much, but they could make a reduction of £100,000 or £200,000 here or there, and suggesting that represented a saving of many hundred thousand pounds, but the word “many” in front of that phrase is again brought out afterwards—“the burden of taxation can be lightened by £2,000,000.” The Minister says at this moment he cannot afford a certain remission which is estimated to cost about £250,000. It is time we should know whether or not there is to be any attempt at implementation of the promise that £2,000,000 economies were to be made this year.

I do not know whether it is necessary to answer the speech which Deputy McGilligan has delivered for then-th time in this House.

It should be answered some day.

I think the Deputy having such a very keen wit, and such a very keen sense of humour should now start laughing at himself. You can have too much of this thing. We had this speech with the advertisement read at length on the Budget statement. I think the Deputy must put it under his head at night so that he may have pleasant dreams. We had it again on the Report Stage of the Budget Resolutions. We had it on the Second Reading of the Finance Bill, and we have had it to-day. I think it would economise the time of the House if some arrangement were come to whereby this speech of Deputy McGilligan might be taken as read, and might be printed in the discussion on every amendment which is down in the name of the Opposition to this Bill. It is beneath the Deputy to make himself a sort of rhetorical jack-in-the-box in a discussion of this sort, that at every time when the catch is released on an amendment he gets up from his place with the self-same squawk.

The Deputy knows as well as I do the reason why we are compelled to ask the House to find additional money this year, and why we are unable at this stage to give a complete fulfilment of the promises we made to the electors. We promised we would save them £2,000,000 a year and we will yet save them that £2,000,000 a year. But the Deputy knows that we had to take over an administrative machine in which every anachronism inherent from British government is still enshrined. In order to administer the government of the country we had to keep that administrative machine going, and we had to feed it with the people's money, otherwise there might be dislocation of the administrative services of the country. But next year, and the year after, when we will have had time to make an examination, and to clear away the anomalies and simplify the machinery, and when, above everything else, we will have succeeded in keeping the people's money at home for the use of the people, then we will be able to fulfil the pledges we gave to the people and which we certainly will fulfil when we get the opportunity.

I would make an appeal to the Minister to consider this amendment a little more seriously. I am not going to remind him of election promises. I daresay the Cumann na nGaedheal Party made election promises. I think that the Minister does not realise altogether the burden of taxation which he is so lightly placing on the shoulders of the people least able to bear it. I tabled an amendment suggesting to the Minister a way in which the burden might not be passed on to people least able to bear it, but he chose to reject it. He did not accept that amendment although it was sympathetically supported by Deputies in different Parties in the House. I did not table that amendment again, because I did not want to hamper the Minister, or unnecessarily to prolong debate. But I have discovered that the Minister does not quite realise how heavily the burden will lie upon the shoulders of people who are least able to bear it.

The Minister's arithmetic was a little weak. I have sympathy with him because I am not very dexterous in arithmetic myself. But when he told us that a man with £2,000 a year income, of which £500 was derived from investments, would only have to pay £27 10/-, I must say a statement of that kind is simply absurd and, of course, so absurd that the Minister himself would be the first to laugh at it. He will realise that the sum will be considerably bigger and that the person who has to pay income tax on such an income will have to make economies. I know people who are making economies and making them in a way that the Minister would deprecate, and that I would deprecate, because they are making economies that will create unemployment. As he has not thought fit to accept the amendment I tabled, I wish he might consider this amendment now under discussion, which might in some way effect the object I had in view in tabling mine. I am asking him now to go back to the older concession of £225, otherwise the concessions he gives in sub-section (1) and sub-section (3) are more or less a mockery. He is giving, as it were, with one hand and taking more away with the other. In making this plea I have not much hope. The Minister will answer and say that he cannot get the money anywhere.

I do wish the Minister would choose his language more carefully than he does, even when replying on amendments of this kind. He talks about taking over machinery enshrining every anachronism. I wish he operated one of these things and we might almost put it in comparison with the Minister because he enshrines many anachronisms, and none more than this particular thing. The Minister is of opinion that this has been under my head for many weeks. It is not so much that I had it under my head as the Minister is trying to get it into the soul. My object was not to have it under my head so much as to get into the Minister's head what he promised. I am rather apprehensive, from the remarks he made, that he is not quite clear as to the full amount of his promises. The phrases he uses run counter to the election advertisement. He asks that we might take this as read. I want to take it as read and act upon it. What is the good in taking a thing as read if there is to be no performance? It was read thousands and thousands of times during the election. Does the Minister think that people would be content to read and ask for nothing else? He told us they would do these things. I wondered what were the words that were trembling on his lips. He said next year or the year after and so ad infinitum. He said when they got time they would do a lot of things. They would give a remission of £2,000,000 taxation when they had time to clear up the anomalies and to keep the people's money at home.

I knew the Minister did not read the advertisement. Here we have it that it was not next year, but the year before, that the promise was made. We are told in the advertisement that the Fianna Fáil Party having examined minutely the Estimates for the services for the current year—I emphasise that point and the second point, whether this was conditional upon certain moneys being retained at home—they were convinced that savings of many thousands of pounds could be made, not including such items as £1,152,000 paid to the British Government in respect of R.I.C. pensions and for similar payments not required by the Treaty, so that even though these moneys were going out of the country the burden of taxation was to be lightened by £2,000,000. We have an amendment now proposed here to give relief in regard to the personal allowance and the Minister's contention is that we cannot afford to do it. The only reply I make is that he should be able to afford it. The Party opposite said they could afford it and certain precise explanations were given by them and these explanations included the savings that were to be made this year. What was the good of seeing that the Estimates for the public services for the current year were examined, if not to give the impression that these services were extravagant? That was the keynote; and as a second contention they depended upon the retention at home of the people's money, which should be kept here. These sums of money could be saved and the burden of taxation could be lightened by £2,000,000 not including such items as the sum of £1,152,000 paid to the British in respect of R.I.C. pensions and similar payments not required by the Treaty. I think the Minister admitted that was his answer in reply to a previous contention I made, and I think it is still his answer to the people who asked why he cannot give this remission of taxation. Where is the sum of £2,000,000 gone which Fianna Fáil, after a precise examination of the Estimates for the current year, promised to have made, not including the payments which he now calls the people's money that should be retained at home? We still have to get the necessary £2,000,000. One way to stop these speeches being made, bringing him up against his election promises, with such wearisome reiteration from his point of view, would be to answer them and to say frankly that the £2,000,000 never was in sight and that there never was any examination or any supposition on the part of Fianna Fáil that they could really economise to the extent of £2,000,000 and that it was all a mere election sham and is now disclosed as such.

Mr. Hogan (Galway):

That is not the whole story. The Minister has said on the one hand that when he gets time and opportunity he will hold money in this country, and on the other that he had to maintain expenditure and services and to maintain our level of taxation. That is his main point. What has he done? Not only has he maintained our level of taxation in spite of all the promises, but he has increased it by £2,000,000 to £3,000,000. The Minister may think that this is all a joke, that no explanation of the performance is required for the country, but I can tell him that a time will come when he will have to make some explanation of it. There may be people through the country who will accept for the moment his excuse that he took over an extravagant tradition, extravagant services which he had to keep going for a year or two years, or, as Deputy McGilligan says, perhaps three years or perhaps until Tibb's Eve. But he has a good bit more to explain. In addition to keeping these extravagant services and extravagant level of taxation, what has he done? He has increased taxation by from £2,000,000 to £3,000,000. Was that for the purpose of keeping our services going? The fact of the matter is this: this Budget is just a shameless attempt not so much to take money from the rich—I will not put it that way; or from the poor—I will not put it that way either—but to take money from everybody who is working, whether he be rich or poor, and give it to everybody who is not. That is what this Budget comes to. And that is done quite coldly and calculatingly on the basis that he will get more votes by such a policy. You can deceive some of the people some of the time, but you cannot deceive all of the people all the time, and in a very short time the Minister and his Party will have to explain to the country why it is that in spite of all their promises of economy they have not only maintained the level which we maintained but have increased it by £2,000,000, and increased it at the expense of every honest man in the country who is trying to pay his way.

I do not know whether it is necessary to reply on every occasion to Deputy McGilligan. He is rapidly becoming the Uncle Dick of the Dáil, and that advertisement which he drags in on every possible occasion is going to be King Charles's head. Deputy Hogan, however, is not relying on the advertisement. He is relying on the usual misrepresentation and on his own personal experience— that you cannot fool all of the people all of the time. For ten years Deputy Hogan thought otherwise. The last General Election——

Mr. Hogan

What is the usual misrepresentation?

The last general election disillusioned him and he cannot fool the people by saying that we have increased the level of taxation. The amount of revenue which we anticipate we will derive from the taxation imposed by this Bill for the purposes of meeting the normal expenditure of the Government, and for making that additional provision for the old age pensions which this House accepted in principle against Deputy McGilligan and Deputy Hogan and Deputy Blythe when they were members of the last Government, is just exactly the same as was made by my predecessor. We are, it is true, taking some cognizance of the fact that outside of this House there are people who are workless, and who are starving, and we are making special provision to relieve them. We are providing over £2,000,000 to meet the present unemployment problem, but we are providing that money out of what I might call windfall taxation. To the extent of £600,000 we are providing it out of the Hospitals Sweepstake, and the balance by frankly anticipating revenue. From the excess profits duty which, in the normal way in which the last Government were collecting it with all the hardships and accompanying terrors of penalties, and a certain disregard for the individual, which characterised the last Government, would bring in in the space of three or four years £2,000,000. In addition we are borrowing on the security of the Road Fund £1,000,000, in order that we may do something for those who are hungry and workless in our midst to-day. We are not doing as Deputy Hogan did—trying to fool the people that there was a greater measure of prosperity here than was enjoyed elsewhere in the world. We are directing their attention to the fact that economic conditions here are just as bad as anywhere else in the world. We are letting them see, what Deputy McGilligan, when he was Minister for Industry and Commerce tried to conceal from them, that we have 80,000 people unemployed in this country, and in order that everyone may have the true picture of the real condition of affairs we are asking the unemployed to register at every labour exchange in the country, in order that everybody may know the situation that has to be met if stable conditions are to exist. We knew before the election what Deputy Hogan learned at the election, that, in his own words, you cannot fool all the people all the time. We know that it will entail sacrifices from everybody. We will not do what they did—use borrowed money to balance the Budget. We are meeting the people fairly and squarely, and letting them see what the true financial and economic position of the country is, what the condition of affairs as regards unemployment in this country is, and we are asking them to stand behind the Government in an earnest desire and effort to meet the situation.

Deputy Alton says that certain of these taxes have to be passed on. It is quite true that certain people are making it an excuse to reduce wages. It is equally true that it is a certain class, certain large landowners, who are taking the lead, who, possibly, as a class, would be less affected by this Budget than any other section in the community. They made this Budget the excuse for and took advantage of the present condition of affairs to reduce the wages of the workers. I hope the Minister for Lands and Fisheries will pay special attention to that fact, because these people have been allowed to remain in enjoyment of their lands on the excuse and for the reason that they said that if they were allowed to remain in possession they would give more employment at fair rates of wages than would be given if that land were divided amongst the small holders in their district. If they are going to take advantage of the present opportunity to reduce wages, I think it is time the small holders had an allotment of these lands.

Might I correct the Minister? I am not acquainted with any of these large landowners to whom he refers. The people to whom I refer are small people. They are just as good Irishmen as the Minister himself.

That would not be saying much.

They are anxious to keep people in employment even by denying themselves but the Minister is making it impossible for them to do so. They are not landowners. I have little to do with that class. I am dealing with the hard-working class who earn their money.

It is interesting to see that this rather foolish speech of mine brought the Minister to his feet to attempt an explanation of what happened. The statement he has made is full of the absurdities that one has come to expect from the Minister as his ordinary coinage in debate. He has seen that this statement must be explained. He says that he accepts Deputy Hogan's dictum that "you cannot fool the people all the time." I wonder will the people accept the dictum that they have been fooled this time by this advertisement.

That advertisement will be imprinted on the Deputy's heart.

It is going to be imprinted on other parts of the Minister's anatomy. The Minister helped to write the advertisement and it should be imprinted on his mind. If he were honest about his election promises, he would be making some attempt to prove that that advertisement is going to be implemented. He would put a date upon its implementation and he would state an amount. Otherwise, he should say quite honestly and openly that the advertisement was issued merely for the purpose of fooling the people at least once. He would say, "That was all we cared about previous to the election. There was no use in meeting difficulties half way." They are meeting the difficulties now, but they are not standing up to the difficulties. The Minister was one of the persons marked for office when this advertisement was issued. Here is the promise made to the people: "Here is what Fianna Fáil can and will do for you." Translated personally, that statement reads: "Here is what I, Deputy MacEntee, can and will do for you—two million pounds reduction of taxation——"

Almost equal to the Deputy's assertions about the Shannon Scheme and the Drumm battery.

I shall have to get the "Canadian Eagle" to talk to the Deputy.

The "Canadian Eagle" is well briefed by the Deputy. He has to go abroad to get that in.

A gentleman in a case here said he was made leave because he was not allowed to publish these things about the Deputy.

The Deputy thinks he was telling the truth.

The Deputy who gave that evidence on oath——

No Deputy stated that.

The gentleman who gave that evidence on oath believed he spoke the truth.

He did not believe it. He knows he did not.

That evidence was given on oath.

We are not concerned on this Bill with evidence given on oath.

We have been told that the Government are facing up to their responsibilities seriously and not as the late Government did. In one of the concluding paragraphs of his speech, we get this amazing statement from the Minister: the late Government had availed itself of windfalls; it had not met expenditure out of ordinary revenue. The Minister went on to state what he was doing. This is the admirable situation presented to us by him as his Government's record: they are going to anticipate certain revenue, frankly. Because you do "frankly" what was described as "dishonest" previously, does not make it any less dishonest. The Minister is going to take certain moneys that come in this year. That is a euphemism for saying that he is going to rob the hospitals this year. He is going to give certain reliefs this year— to the amount of £650,000, I think. That is the public charitable hospitals tax. Why not say so? Finally, the Minister is going to borrow on the credit of the Road Fund. Immediately afterwards, he says he is not going to do as the late Government did, to give relief out of borrowed moneys. He says in one breath he is not going to do as the late Government did, and in the next breath he describes his own programme in exactly the same terms in which he says we acted. The words did not apply to us, but they do apply to him. He is going to anticipate certain revenue. He is going to take advantage of the windfall from the hospitals—what I call robbing the poor. He is going to borrow on the credit of the Road Fund, and when he is going to borrow on the credit of the Road Fund I suggest that he should strike his breast and say "mea culpa." Instead, he says that he is not going to do what the late Government did, that he is not going to give relief out of borrowed moneys. Because he says he is going frankly to do a thing which he described as dishonest before, does not make it any less dishonest.

We are told that there are 80,000 unemployed in the country. That is an interesting point to have introduced dealing with the rate of income tax chargeable on certain incomes. There are not 80,000 unemployed so describing themselves. There is not any official publication which states that there is anything like that number. There was a census of population taken and a volume was devoted to the industrial status of the State. One of the questions asked was: "Are you or are you not working?" at a particular date. An analysis was given of the answers to that question. That analysis showed that although 80,000 had signed themselves as not working, about 10,000 or 12,000 of these were not working because they were in hospitals, whither they had gone from work sick and whence they were to return to work when better. There was, further, a very definite analysis given in that volume of the number of people who described themselves as "out of work" and who were found to be the possessors of small holdings. What "not working" there meant was that they were not working at the time when the census form came to be signed. They were people who had been in receipt of moneys for working on relief schemes on roads. When these relief schemes had finished, they went back to their farms. To say that these people are unemployed, in the sense that they are dependent for their livelihood on the wages they can get for work and that they cannot get work, is nonsense.

There are not 50,000 unemployed in this country, but that is incidental to this amendment. The Minister says that economic conditions in this country—contrary to what used to be said —are as bad as in any other country in the world. I do not think that that is even a correct statement of facts at the moment. It certainly was not up to the spring of this year, and although conditions may have worsened, and are likely to get very much worse in the near future—notwithstanding the fact that the Minister has had four months to blunder about—it cannot yet be said that conditions here are as bad as in any other country in the world.

I doubt even yet if there is any country in the world to compare with this in its economy. The fact that there are so few people dependent for a livelihood on work, which work they cannot get, makes its condition comparable with any country in the world. But that is not going to last long when the political antics the Minister is indulging in have had their proper results. It will then be time enough to make the statement that economic conditions here are the worst in the world. Perhaps the Minister will be able to go further and to say that they are the worst in the world and when he comes to that and says so he should say "And I did it. I helped to bring that about." What answer will he have in these days for the people who were promised the things mentioned in the advertisement, the economy which meant the elimination of waste, the tillage which was to meet our own requirements and 86,041 people who were to be given employment under the aeis of the Minister's Government? What is going to be said to these people when conditions get really bad? What will be said about the promises given when they ask why the promises were not fulfilled? He will have to have something more than the twaddle he talked a moment ago about what the late Government did, how they expended portion of the money on relief works, which they themselves are now going to take the advantage of doing to meet what might be met out of ordinary taxation. The minute that is said the answer will be that that is what the Minister proposes to do in the very speech in which he makes the accusation. He has not said anything about one thing—why we cannot get a saving of two million pounds, notwithstanding the fact that certain sums not warranted under the Treaty continued to be paid. That has to be explained by the Executive. There is no explanation yet.

Mr. Hogan (Galway):

I want to refer to another point. It was stated by a Deputy that he heard that big landlords had been dismissing and reducing the wages of their employees, and he protested against it. It is about time to stop the cant. Let us take the case of the small landowner. He must have his income lessened, and at the same time he must pay the same wages. Income tax has gone up from 3/6 to 5/- in the £. That has taken more from the income of the big landowners of whom there are very few. As they are mentioned let us deal with them. They are paying 5/- instead of 3/6 in the £. Did they lose the money? Are they short in the amount they have to spend? Take the case of a small farmer with 100 or 150 acres, which, I understand, is about the amount of land Deputy Corry holds. These people worked hard, and saved a bit of money for several years. They had it in securities of one kind or another. They may not be paying income tax on their land, but they paid on the little securities they had for the purpose of their business, or for paying wages. Instead of paying 3/6 in the £ they will now have to pay 5/- Are they at a loss? Have they money still? Can they afford to pay the same wages now? What is the use in talking nonsense? What is the use of threats, that unless they pay it means confiscation? Do not begin with threats. If there is confiscation it will not stop at the big landowners, nor with the small landowners. It may hit some of their own friends. If the Party opposite is open to reason, to justice, to equity and to fair play, let them remember that. Take the case of a farmer with 100 or 50 acres, with perhaps £200 in the bank or in some securities, on which he has to pay income tax. In addition what else has he to pay on now? He has to pay more for every suit of clothes and for every pair of boots. He is paying more as a result of this Budget for practically everything he buys in the shops. He is paying more for his agricultural machinery, he is paying more for his Indian meal. I will not examine the completely silly explanation that we got recently in connection with Indian meal, when we were told that the prices had fallen. It may be that prices fell, but the question is, whether they are higher than they would be without a tariff. That farmer has to pay more for everything he buys, fertilisers, feeding stuffs, and agricultural machinery. And this is the man who will have to pay the same wages. How is he going to do it? If he has to pay more for his wants how is he to get money for wages? At the same time the price of everything he sells has fallen. I admit that that is the result of general world conditions.

The present Government has created insecurity in this country and insecurity in regard to exports to another country. I believe that is what this Government has done since it came into office, and with that state of affairs, we have a Minister in Dublin, knowing nothing about conditions in the country, having the impudence to tell us that if we do not pay the same wages, after he has stripped us, our land will be confiscated. We are not going to be deterred by any threats. I suggest to Deputies opposite that if that is their intention they should say so like men. If there is to be confiscation let them go forward with that policy decently. Let them bring forward a Bill in the Dáil and debate it. Let them say: "We will make bankrupts of you; we will confiscate your land and your property because you are an enemy of the country." That point of view is beneath contempt. There is no doubt whatever that that is the real point of view behind the Party opposite and behind the Budget. We hear a lot of talk about a Christian social order to take the place of the present order. This heartbroken world is suffering from all sorts of evils, evils that statesmen all over the world are trying to solve and find it difficult to do so. Here we are told we have got a plan; something original. That makes me laugh. There is not a single idea in the Party on the opposite benches that is not at least 100 years stale. What does all this talk about a Christian order amount to? It means following the policy of Lang in Australia, clapping on high tariffs, having high wages and half enough to do. It will end in one way. That will not be in a Christian or in a new social order, but in the bankruptcy of the country, and the Labour Party, the members of which should be sitting on their benches, will in the long run suffer. That is the truth in spite of all the lip service——

You are imagining it.

Mr. Hogan

—to the poor that comes from the Labour Benches and from the benches opposite.

I felt rather surprised to see the gentleman who was responsible for what is known as the Hogan Act coming in here and talking about confiscation and land and what the small farmers have to pay in income tax. I cannot exactly call myself a small farmer. My valuation is £151 a year and the only time I ever paid income tax was when I paid the 1919 to 1920 portion. When I came back from jail in 1924, Deputy Cosgrave sent the bums down for it. That is the only time I ever paid income tax and I paid it for a year during which I did not own a sod of land.

Who made you pay your land annuities?

The jack snipe. Deputy Hogan has illuminated us to a great extent about these people. The Deputy talks of the manner in which the Minister for Finance has dealt with these large landholders who have dismissed their hands and reduced wages on account of income tax. I will give the Deputy an instance which should remain very well in his memory, because there is a piece of East Cork called after him on account of it. It is a little estate down near Deputy Broderick's place, on which the valuation is £26 and the annuity £42, under the Hogan Land Act. He is one of those farmers whom Deputy Hogan made prosperous and happy, and from whom we had to call off the sheriff the other day for five years' annuity, the farm being held for seven years. I can give Deputy Hogan a definite instance —the gentleman called Smith-Barry at Fota, whose estate comprises 1,700 acres, together with rack rents which he collected out of every county in the Free State, all lumped together, and, I expect, invested abroad where he thought it would be safe. His income tax was increased from 3/6 to 5/—a terrible injustice. He had 38 hands employed and he dismissed seven of those thirty-eight and reduced the wages of the rest by 4/- a week, because, as he said, some of them had voted Fianna Fáil. I hope that we will be able to deal with that gentleman and I promise him that he will not get as much out of his 1,700 acres as he got out of the estate in Watergrasshill under the Hogan Land Act. Deputy Roddy could tell something about that estate. We are about sick of this kind of nonsense from this gentleman who did everything for the farmers, and who talks about the prosperous condition in which he left the farmers, who confiscated the creameries and who now talks of confiscation. He confiscated the creameries and passed on £3 per cow to the farmers at 4d. a gallon.

Mr. Hogan (Galway):

That did not look much like confiscation.

It looks very much like confiscation to the unfortunate farmer who is paying it, and who is paying three annuities at the present day— the landlord's rent and the tenant's interest, and compensation for disturbance to them, and all three of them clapped on to the unfortunate farmer who came in. Undoubtedly they will be able to pay income tax. If we compel these landlords to disgorge a little of the loot by an income tax of 5/- in the £, and pass it back to relieve, in rates or otherwise, these unfortunate tenants, I think we are doing a good piece of work and a right piece of work for this country. If we take that 1,700 acres, and get rid of some of the compensation for disturbance clauses introduced for the protection of landlords here, under the late Government, and divide them amongst these thirty-eight dismissed employees who are slaves to this prince of the Masonic order, they will be able to get a livelihood out of it, and will not be the slaves they are at present. Let the Minister talk as much as he likes about confiscation after that, and remember one thing, that so far as Smith-Barry is concerned, he got his estate by confiscation, and the Minister paid him for it afterwards.

Mr. Hogan

The Deputy might lose a little of his own, and then he would squeal.

They would be welcome to it, but first they would take it from the Hogans of Galway. They would call that way first.

Mr. Hogan

I hope not. I would rather they would begin with the Deputy, strange to say.

I suppose the Deputy expected that when he brought in all these compensation for disturbance clauses. Deputy McGilligan spent half-an-hour telling us that we could not relieve unemployment, and of the position we would be in next year. I know the anxiety in the minds of members on the Front Benches opposite, at least. I will not accuse the others of having the same anxiety, but I can say that every single proposal brought in to provide employment was opposed by Deputies on the benches opposite, for some reason or another. On each occasion, some crank or other got up and spoke about it. Deputy Gorey had sheep dip, and we had them here complaining that there was something wrong with every tariff. We are going to provide work for our own people in our own country, and they are not going to be dependent on the figure laid down by the ex-Minister for Local Government, when he fixed the maximum amount of home assistance to be paid per child, after a certain number of children, at nine-pence per week, and, at the same time, laid down a contract which we find great difficulty now in getting rid of, with all those gentlemen who were clapped in at high salaries as permanent officials. When we come to consider that situation we hope that we will be able to provide employment for our own people in their own country, and we intend doing it. There is one thing that those gentlemen opposite who believe in trying to prevent us from carrying out that policy, and who even go so far as to assist the gentlemen on the other side of the water in fighting their case and acting as legal advisers to Mr. Thomas and Company, must realise. There is one place for those gentlemen, and if I can induce the Executive Council to do their duty, some of those gentlemen will be where they put better men, in Arbour Hill.

I feel tempted to say a few words. I heard Deputy Hogan delivering his usual harangue. We cannot blame Deputy Hogan for making the speech he made. He has not figured very much in the House since he was returned as a Deputy instead of a Minister. He remained away while many measures were being passed through the House which were in the interest of the farmers. He conveniently remained away while a measure was being considered which would bring a lot of grist to the farmers' mill by way of a butter bounty. Deputy Hogan was a cute man to remain away while that Bill was under discussion. He spoke to-day just as if an election were on; he made the same political harangue that he was accustomed to make during the election. He told us at that time about the bankruptcy that would stare the country in the face if Fianna Fáil were returned. He made almost the same kind of speech to-day and used many of the old stock phrases that I heard him use in Ballinrobe, Co. Mayo. He told us there would surely be bankruptcy if Fianna Fáil got into power.

We had quotations by Deputy McGilligan from an election circular issued by Fianna Fáil. The men who have spoken on behalf of the Opposition are the last men who should quote anything from election circulars. If we went to the trouble of producing election circulars we could quote some very effective and funny things from them and these same circulars were published over the names of the Deputies who have spoken. It was not merely bankruptcy that would face the people if Fianna Fáil were given power; they would also have to count upon highway robbery of the worst kind. A very prominent Minister in the last Government told the people that if Fianna Fáil took office a man could not go around with a shilling in his pocket; there would be no safety. Someone else said that the Eucharistic Congress could not be held in Dublin if Fianna Fáil got in; there would be chaos and Communists would be out in the open. We were told there would be gun bullies, blackguardism and starvation. The ex-President stated that a farmer's title to his land would go if Fianna Fáil got office.

Deputy Hogan has advanced quite a good deal since the election. His opinion of Fianna Fáil has improved quite a lot, since it is only bankruptcy that is staring us in the face. We have got over all the other things, such as highway robbery, Communistic outbursts and the breaking up and smashing of the country; the only thing that need worry us at the moment is bankruptcy. I am sure we are exceedingly grateful to the ex-Minister for Agriculture, the man who was once looked upon as the greatest Minister for Agriculture in the world. When we recollect his record as a Minister we can only come to the conclusion that even his opinion of Fianna Fáil and bankruptcy does not amount to very much. There has been talk about confiscation. That is not a new word, and it was not even a new word under the late administration.

Since the introduction of the Budget Deputy McGilligan has all along demanded some evidence of the Fianna Fáil policy of economy. When, he asked, were they going to save the two millions they promised to save? Deputy McGilligan and his colleagues took very good care to ensure that certain savings could not be made by Fianna Fáil. Certain officials of theirs were placed in very good jobs, secure positions, before Fianna Fáil had any chance to economise. Since Fianna Fáil did begin to economise Deputy McGilligan and his colleagues took very good care that the Press that boosts every lie they want boosted went out to create a scare about a mutiny in the Civil Service, in the Police force and in the Army. When Fianna Fáil indicated its intention to economise, those papers, prompted by some of the ex-Ministers, endeavoured to create a scare.

The same case is being put up to-day for the income tax payers as was put up a fortnight ago for the British millers. The Party opposite want the British millers to have control in Ireland of certain products. They want British importers still to import, and for that reason they opposed certain tariffs here that were submitted with the object of preventing importation and giving the foundation for industrial growth. Our memories are long enough to recognise why they put up that fight for the British millers. We are not surprised at their attitude because when they were in trouble financially they never lost an opportunity of sending circulars to English millers, signed either by Deputy Professor O'Sullivan or Deputy McGilligan, asking funds. They did that whenever they found themselves in financial trouble. It is not surprising, therefore, to find them putting up a fight for income tax payers now.

Of course the hospitals had to be dragged in. We were told the proposals made by the Government meant robbing money from the poor. There has been a lot of discussion about the proposal to take certain moneys from the proceeds of the Hospitals Sweepstakes. Do the ex-Ministers know the amount of employment that has been given by the hospitals since the sweepstakes were started? How many extra beds have been put aside by the hospitals for the benefit of the poor? What reduction has been made in the charges made for attendance in the case of patients in hospitals? I would like Deputies who talk so much about the present proposal to investigate the conditions of the hospitals, particularly those reported upon recently. They will find that not so very much benefit has been given to the poor people in the way of charges or attendance, notwithstanding all the assistance the hospitals have got since the sweepstakes were organised. I maintain that under the present proposal the greatest amount of good will accrue to the poor.

Deputy McGilligan was Minister for Industries and Commerce in the last Government. He allowed most industries and a lot of the country's commerce to die when he was in charge of the Department. He talked about the tillage policy of Fianna Fáil. He asked why we had not increased tillage. One does not start to plough in June or July; that is the wrong time of the year. Most of the ploughing was done and a lot of the seeds sown before Fianna Fáil got into office. I think the Deputy ought to have known that. I believe it is the intention of the present Government, when they get the opportunity, to settle that side of the problem too. The House has got that assurance and it will be carried out as effectively as all the other promises that were made by Fianna Fáil.

I am at a loss to know what all this has to do with the amendment that I moved. I would like to say, in reply to certain matters the Deputy mentioned, that no money was received from British millers or from any British sources by the Party which is represented on this side of the House.

They let you down.

I might add that no money was received from any outside sources. The sooner the Deputy is able to make that statement for his own Party the better. I would like to point out that it is possible to plough in March and the present Government came into power in March. Another point the Deputy made was in relation to the fright the Press gave his Party and the Government about the economies they were going to make. I did not know it was so easy to frighten them. I would like to say that we here are perfectly innocent of having suggested anything to the Press in that connection.

Question—"That the words proposed to be deleted stand part of the Bill"—put and agreed to.
Question—"That Section 3 stand part of the Bill"—agreed to.
SECTION 4.

On Section 4 I would like if the Minister would give us some information as to the necessity for sub-section (2), and for the inclusion in that section of the words "and be deemed always to have included respectively an annuity which is paid voluntarily" and so on. I would like to hear from the Minister if it is his intention that annuities or pensions that are payable voluntarily, and which until the inclusion of this section were not liable for income tax under Schedule E, are now to be assessed, and that the provision of the Bill will operate retrospectively, so as to make these liable for income tax? I can see no reason for his inclusion of the words "and be deemed always to have included respectively," unless he wants this provision to operate retrospectively. I would ask the Minister for some information on this point.

The point is that the sub-section merely declares the law to be what it has always been in the Saorstát. It is a declaratory section, and is intended to remove any doubts as to whether this is the case or not, and to prevent any claims being made in respect of income tax which has already been paid, that the section has been inserted. There is no purpose in the section but that. It will not enable us to make assessments retrospectively, nor is it the intention that it should.

The provision in sub-section (1) of Section 4 imposes the tax on annuities or pensions which are payable voluntarily. If the intention of the Minister is purely one that as from the date of this Bill pensions or annuities which are payable voluntarily should be liable to a tax, then Schedule (d) or Schedule (e) accomplishes everything he desires, that is if it is purely to remove the question of doubts. As I understand the position, if a tax were payable in the past in respect of annuities which were paid voluntarily, there is no purpose in this section unless it is that of empowering the Revenue Commissioners to impose, retrospectively, income tax in respect of these annuities and pensions. If it is the intention of the Minister that there should be no retrospective imposition of income tax in respect of these annuities, I would ask him to reconsider the matter on the Report Stage, and to bring in further provisions, then, so that no income tax would be charged on those voluntary annuities or pensions, or to remove all doubts of any such assessments being made hereafter.

I will consider the point that has been made by Deputy Finlay, but I do not think it will be necessary to bring in on the Report Stage any amendment of this section. This section does not give us any power to impose or collect income tax which has heretofore not been collected in this country. The trouble arose out of a decision given in a recent House of Lords case in which it was held that, contrary to what had been the usual practice in Great Britain, in cases where an annuity or a pension was paid entirely voluntarily by a previous employer that such pension or allowance, or annuity, was not liable to income tax. It was always held to be so liable up to that decision and it has always been held liable here. That has not been challenged in the Irish courts, but in order to ensure that if it were challenged in the Irish courts the decision would not go against us on the same basis as the decision in Great Britain, we have introduced this section so as to make clear what the intention of the Legislature is, and to confirm what has been the practice in this country. It will not, in any way, enable us to make retrospective assessments. It will not enable us to do anything that we are not at present doing, and I am advised that in order to make that clear this sub-section is necessary. I will look into it between now and the Report Stage and if it is necessary to meet the point of view put up by Deputy Finlay I will do so, provided it does not cut across the intentions of the Revenue Commissioners.

I am quite satisfied with the statement of the Minister, but let me say this that the effect of sub-section (2) is this: that the Income Tax Act of 1918 is deemed to have operated as if voluntary pensions or voluntary annuities were liable to income tax under the provisions of Schedule E. I quite appreciate the case which the Minister refers to in which the tax was assessed or levied on pensions or annuities payable voluntarily in the past. There may be a number of cases in which, say, next year or this year the Revenue Commissioners may ascertain that a particular pension, or a particular annuity, which had not come to their notice previous to this year, was payable voluntarily. The effect of sub-section (2) may be this: that such pensions or annuities may be included for purposes of income tax for six years and that income tax can be levied on the persons to whom the annuity or income tax was payable. It is only to clear up that matter that I am pressing the Minister to have it considered on Report Stage.

Possibly the Deputy may have overlooked the fact that the income tax under Schedule E is charged in respect of every public office and employment, and in respect of every annuity paid out of the public revenue of the Saorstát, otherwise than annuities. There is this theory, that pensions are payable voluntarily by the State and that is why it has been found necessary for us to bring in this particular sub-section because the House of Lords' decision as to pensions paid voluntarily might affect the pensions payable by the State. The theory is that pensions payable by the State are paid voluntarily, and it is for that reason that it was found necessary to bring in this safeguarding section.

How much money is there in this?

There will be quite a lot of money in it. I cannot say how much at the moment. The whole point is that this is not going to bring in any additional piece of revenue to the State, it is merely to regularise what has been done in the past.

The Minister is wasting time. We have heard that statement from him twice already.

When the Deputy asked how much money was in this I was trying to explain why this section has been put in.

The Minister has explained the whole thing three times already. I abhor those repetitions. I asked the Minister one question, how much money is in this, and he cannot tell how much. He cannot answer the question.

I can say this, at all events, there is no extra money in it.

I would like to ask the Minister—not in relation to the extra money at all—how much money is this designed to prevent the Minister losing?

Does the Deputy want a serious answer to that?

I should say about £50,000 or £60,000, or possibly more than that.

£50,000 or £60,000, or possibly more.

Is the Deputy going to raise the point about the two million pounds?

I shall omit the reference to it for the present, because the Minister has possibly not recovered from the impact of the argument on the last occasion. That is the answer he might have given to Deputy Cosgrave. It was the same question.

Deputy Cosgrave did not put in that way.

He asked how much money was in this, and the answer is £50,000 or £60,000, or possibly more.

He implied that I was going to get more money.

Certainly not.

Question put: "That Section 4 stand part of the Bill."
[An Ceann Comhairle resumed the Chair.]
The Committee divided: Tá, 63; Níl, 46.

  • Aiken, Frank.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Blaney, Neal.
  • Boland, Gerald.
  • Boland, Patrick.
  • Bourke, Daniel.
  • Brady, Bryan.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Browne, William Frazer.
  • Carney, Frank.
  • Carty, Frank.
  • Cleary, Micheál.
  • Colbert, James.
  • Corry, Martin John.
  • Crowley, Fred, Hugh.
  • Crowley, Tadhg.
  • Curran, Patrick Joseph.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Dillon, James M.
  • Flynn, John.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Gormley, Francis.
  • Gorry, Patrick Joseph.
  • Goulding, John.
  • Harris, Thomas.
  • Hogan, Patrick (Clare).
  • Humphreys, Francis.
  • Kelly, James Patrick.
  • Kennedy, Michael Joseph.
  • Keyes, Raphael Patrick.
  • Kilroy, Michael.
  • Lemass, Seán F.
  • Little, Patrick John.
  • Lynch, James B.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Maguire, Conor Alexander.
  • Moane, Edward.
  • Moore, Séamus.
  • Moylan, Seán.
  • Murphy, Patrick Stephen.
  • Norton, William.
  • O'Grady, Seán.
  • O'Kelly, Seán Thomas.
  • O'Rourke, Daniel.
  • Powell, Thomas P.
  • Rice, Edward.
  • Ruttledge, Patrick J.
  • Ryan, James.
  • Ryan, Robert.
  • Sexton, Martin.
  • Sheehy, Timothy.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Walsh, Richard.
  • Ward, Francis C. (Dr.).

Níl

  • Alton, Ernest Henry.
  • Anthony, Richard.
  • Beckett, James Walter.
  • Bennett, George Cecil.
  • Blythe, Ernest.
  • Brasier, Brooke.
  • Broderick, William Jos.
  • Brodrick, Seán.
  • Collins-O'Driscoll, Mrs. Margt.
  • Conlon, Martin.
  • Cosgrave, William T.
  • Craig, Sir James.
  • Davis, Michael.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar Seán.
  • Duggan, Edmund John.
  • Esmonde, Osmond Grattan.
  • Finlay, Thomas A.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Gorey, Denis John.
  • Hassett, John J.
  • Hayes, Michael.
  • Hennessy, Thomas.
  • Hennigan, John.
  • Hogan, Patrick (Galway).
  • Keating, John.
  • Keogh, Myles.
  • Kiersey, John.
  • Lynch, Finian.
  • McDonogh, Fred.
  • MacEoin, Seán.
  • McGilligan, Patrick.
  • Minch, Sydney B.
  • Murphy, James Edward.
  • Myles, James Sproule.
  • Nally, Martin.
  • O'Brien, Eugene P.
  • O'Donovan, Timothy Joseph.
  • O'Higgins, Thomas Francis.
  • O'Leary, Daniel.
  • O'Mahony, The.
  • O'Sullivan, John Marcus.
  • Reidy, James.
  • Roddy, Martin.
  • Thrift, William Edward.
Tellers:—Tá: Deputies G. Boland and Briscoe; Níl: Deputies Duggan and P.S. Doyle.
Question declared carried.
SECTION 5.
Question proposed: "That Section 5 stand part of the Bill."

I desire an explanation from the Minister in regard to what new additional imposts this section connotes. Does it mean in respect of the winding-up of estates that the period is to be extended from three years to six? If that be not so, what is the meaning of the statement in line 23 "an assessment or an additional first assessment (as the case may be) may be made for the year of assessment in which such person dies or for any one or more of the six years next preceding that year in respect of the profits or gain ..."?

There is no change in the period of assessment. There is absolutely no change in the period so far as the general run of people are concerned.

I do not know whether the Minister has read this section correctly or not. This section refers to deceased persons. As I understood the law it allowed a period of three years from the date of assessment. This is the first occasion in which a period of six years has been introduced.

I should like if the Deputy would give me some proof of the statement that this does alter the period in respect of such cases. I am advised by my adviser that it does not and as between the Deputy and my advisers I am disposed to take the advice of the advisers.

Would the Minister tell us what is in Rule 18?

The existing provisions of Rule 18 of the General Rules are:—

Where any person dies without having delivered a statement of all his profits and gains chargeable to tax with a view to an assessment thereon in due course, an assessment in respect of the profits or gains which arose or accrued to him before his death may be made at any time within the year of assessment or within three years after the expiration thereof, upon his executors or administrators and the amount of the tax thereon shall be a debt due from and payable out of the estate.

That has slightly contradicted what the Minister is after stating to me.

The Minister was only 100 per cent. wrong.

I want to put to the House—it is certainly no use putting it to the Minister or to the Government—that at the present moment as the law stands there is surely sufficient time to collect any debts due to the estate within a period of three years from the assessment period. Even that time is long enough for any creditor of the estate to be kept out of his money. As I am advised in these cases, an executor undertaking the onerous and responsible duties of that office is personally liable for any moneys due out of the estates. These are days in which people find it hard enough to live without taking up the responsible duty of winding up estates. Three years is a particularly long time for any ordinary person in business to be engaged in doing other people's business. Now, under the new dispensation which the Minister says he is advised is in no way different, and which he says is no extension of the existing laws until he is reminded to the contrary, an estate may be six years before it is wound up and creditors may be six years out of their money. People who may have delivered goods to the house of the deceased person just half an hour before he dies may have to wait six years before they are paid the money. What inducement is it going to be to any person to undertake the duties of executor under these circumstances? An executor is a philanthropist to a considerable extent. I do not believe any member of the Ministry would like to undertake this task. I certainly think the House is entitled to hear from the Minister what is the reason for this change in the period.

I think that Deputy Cosgrave's objection applies to sub-section (2) of the proposed Rule 18, in which the assessment on the income of deceased persons may be made not later than six years after the expiration of the year of assessment, nor in any case later than three years after the expiration of the year of assessment in which the person dies. I was interested to hear the Deputy's very stringent comment on this. I modestly raised this question at an earlier stage, and asked the Minister to look into it and to let us know at this stage what he proposed to do by this section. I did expect that when the section came along he might have something to say on it. I think Deputies might find suitable occasion on which to ascertain points like this. If they are to expect the Minister in charge of an Income Tax Bill to have the whole income tax code at his finger ends they will naturally be disappointed.

I think the proper way to ascertain information on points such as this is to set down an amendment to the section, so that the Minister may have time to consult his officials in regard to the effect of it. I feel satisfied that if the practice of the House is to be that any member can come along with a series of questions, and discharge them at the Minister in the course of the debate, a very great deal of information will be withheld from the House which might be forthcoming if Deputies put these points in the form of amendments, and gave the Minister time to examine them with his permanent officials outside, and gave him an opportunity afterwards to impart the information which Deputies seek in a judicial way to the House. I took that course. I raised this question at an earlier stage. I did not ask the Minister to deal with it there and then. I did ask him to go into the matter and to let us know if there was any alteration in revenue practice in this matter, and if there was a complete departure, why it was necessary to make it. Now I invite him again to give the information I asked for at an earlier stage of this Bill.

Would the Minister, also, say what his purpose is in introducing for the first time a provision that renders executors liable to penalty for not delivering a statement which in most cases would not be within their knowledge?

I did not know what exactly the keynote of the attack made upon this section was. When Deputy Cosgrave had put his first question I was rather at a loss to understand the amendment. I assumed that he had read the particular section. I assumed he must be familiar with the legislation passed by the late Government, and therefore that he would know why it was necessary to introduce this particular section into this Bill, and that he would realise it was to stop a loophole and to remedy a defect in previous legislation.

The Minister has just found that out.

Deputy McGilligan asked me a question which I answered. He asked what was the existing rule of the General Rules of Income Tax, 1918. I answered that question. If he wanted to get some information as to the period in which an estate might be wound up he ought to have asked me how far that particular rule was amended by Section 8 of the Finance Act of 1925. Even after the Finance Acts of 1918 and 1925 it was necessary that the late administration should mend their own hand and had to introduce a further amendment into the Finance Act of 1931. And again, he should have asked why it was necessary for us to introduce this amendment in 1932, and I would have been able to explain the reason to him. I would start off with this position by referring the Deputy again to the Rule 18 of the General Income Tax Act, 1918, which provides where any person dies without having delivered a statement of his profits or gains, an assessment in respect of such profits or gains may be made upon his executors. The point is quite fair and the principle is quite fair. It was always the intention that where a person died without having made a return for assessment his executors could be made liable for income tax in respect of the year in which he died on any income on which he might be liable or assessed.

A case recently arose in which a person having an income of over £2,000 a year made a complete return and died about a week before the assessment was signed. The Special Commissioners, on appeal, held that the existing rules did not enable assessment to be made on the executors. I take it that it was the intention of the late Government, when they made some of the amendments to Rule 18 of the General Rules of Income Tax, 1918, to ensure that the Revenue Commissioners would have power to make the assessment. Owing, however, to the loophole which the eagle eyes of Deputy Cosgrave and Deputy McGilligan were not able to detect when they sponsored legislation in this House, the Special Commissioners found that the law was defective and assessments could not be made in this particular case. Accordingly, sub-section (1) of this particular section is designed to remedy that defect in the law and to allow this assessment to be made on the executors where a return by the deceased person was not made.

The question was raised, I think, by Deputy Cosgrave that this will impose an additional charge upon the executors. It does not. It does, to the same extent as the rule stood before. If it was not for the fact that an obligation was imposed upon an executor to make a return he would not be able to recover his expenses against the estate. The clause here which imposes an obligation upon the executor to make a return means that whatever legitimate expenses he may incur for the making of that return for the purpose of complying with this section, he will be able to charge against the estate and to recover from the assets of the estate. It imposes no pecuniary disability or liability upon the executor that he cannot recoup himself for. It quite properly imposes an ultimate liability upon the estate of the deceased person who would be liable, if alive, for income tax in that particular year. I do not know whether there is any doubt yet in the mind of any Deputy that this does not in any way extend the period that would normally be required for winding-up a man's estate. I think, if I turn to Section 8 of the Finance Act of 1925, I can make that quite clear. First of all, the point was raised here about the six years' period. Sub-section (2) of Section 8 says: "Subject to the provisions of this section, a surcharge in respect of income tax chargeable for the year beginning on the 6th April, 1922, or any subsequent year may be made under Section 126 of the Income Tax Act, 1918, at any time not later than six years after the end of the year for which the person surcharged ought to have been charged." The six years' period is there "not later than six years" or so after the assessment.

Is the Minister not dealing with additional surcharge and additional assessment and not the first assessment such as he is dealing with here? And was not that opinion so held by Judge Shannon?

He is looking for more argument from his brief. That is what is delaying the business.

The Minister knows his work better than the Deputy could say he ever knew his.

Nonsense. The first part of his speech was an effort to get out of an impossible position.

The Deputy did not know what question he was asking.

Deal with the point at issue.

I am going to deal with the point raised by the Deputy. I might recall that when a Resolution dealing with cinema duties was going through this House dealing with the McKenna duties he raised the point as to whether certain cinema films——

That has nothing to do with this. Deal with the point before the Committee.

May I ask is the Deputy in order in interrupting in this manner? A point has been raised and I am endeavouring to deal with it.

The points raised have nothing to do with cinemas or films.

I only wanted to point out that after ten years' experience Deputy Cosgrave did not know what that section of his own Act contained. Now to come back, Deputy Finlay, I think, raised the point that Section 5 of the Act of 1925 does not apply to this case.

I did not. The Minister read Section 8.

I read Section 8 but I directed the Deputy's attention to Section 2 of the Act of 1931 that made an amendment in Rule 18 of the General Rules of 1918 and makes it applicable in this case. I started off with the Act of 1925 and I came to the Act of 1931 which made Section 8 of the Act of 1925 applicable to the particular case I have in my mind. I do not know whether it is necessary for me to go further except to point out that in addition sub-section (2) of Section 5 reads as follows: "No assessment under this rule shall be made later than six years after the expiration of the year of assessment nor, in any case, later than three years after the expiration of the year of assessment in which the deceased person died." That is the practice at present. There is no attempt to extend the period. The purpose of the section is to stop the loophole left in income tax legislation by the late Government.

Will the Minister answer this question: Does he impose for the first time upon executors penalties in respect of declarations and statements to be delivered by them and brought in through a roundabout way not contemplated by people at all? Sub-section (3) reads: ... "and the provisions of the Income Tax Acts relating to statements to be delivered by any person shall apply, with any necessary modifications, to statements to be delivered under this rule."

Of course. We are asking the executor to make the return.

And imposing penalties?

And imposing the obligation of making the returns. Most of them have made these returns before. Not necessarily for income tax, but I think for estate duty purposes and for other things. It does not mean any liability beyond this—that they shall make the returns to the best of their judgment and belief. Is there any hardship in that?

Is it the Minister's intention that penalties be imposed, in cases where penalties could be imposed on a living person, in respect of declarations to be delivered by an executor?

Take the case of an executor who has no means of ascertaining the income of the deceased person—how does he stand with regard to the State? The State can go back for five or six years in respect of tax or super-tax. Where does the executor stand then? He is not in a position normally to counteract or to contradict or to amend the assessment.

I should like to know whether Deputy Cosgrave has ever had experience of administering an estate as an executor. I have had such experience. I have been an executor for an estate for which no income tax had been returned for a number of years. Had I refused—or if Deputy Cosgrave had any experience himself of administering estates he would know that had he refused to make returns—I or he would have incurred the displeasure of the Revenue Commissioners, and they would have been entitled to take whatever action was necessary against him or me to the extent of penalising us for our neglect. There is nothing here to punish an executor for the faults of a deceased person. Deputy Finlay is trying to read into it that an executor would be made liable for the faults or neglect of a deceased person.

I am not.

If Deputy Cosgrave would throw his mind back he would realise that points such as these were raised by the Opposition.

I should like to know what was the amount of the estate which the Deputy wound up.

If the Deputy is interested I shall be glad to furnish them but I do not think it has anything to do with the case.

It has nothing to do with it.

My point is that the Deputy is standing up and speaking as if he knew all about it, and actually he has had absolutely no experience. All that is asked is that the executor should make returns of the estate to the best of his ability. He is not asked to perform impossibilities.

Is it the Minister's intention to impose upon executors, in respect of declarations to be made by them, the same penalties which are at the moment imposed by law on living persons in respect of statements made by them?

Any executor in complying with the requirements of the law will be treated exactly in the same manner as any other taxpayer, and if he does not comply with the requirements of the law he will be treated exactly as any other person would be treated who does not do his duty with regard to the revenue. The Deputy should direct his attention to sub-section (3) of the section, and say whether it is unreasonable to ask an executor to make a return to the best of his judgment and belief. That is the only thing—that he must make a bona fide return to the best of his judgment and belief as to the income enjoyed by the deceased for the years of the deceased's liability. Is there anything unreasonable in that?

Certainly. I put the case of an executor in the position of having to wind up an estate, say, a doctor's estate, or an architect's estate. How would an executor know what the deceased person had earned for the period in such cases? Supposing the deceased had not kept books, or his books were in some other place? The position is different from that of a business man who keeps books.

I assume from Deputy Cosgrave's statement that he is of opinion that architects and doctors do not keep books and that the Revenue Commissioners are so remiss that they do not compel them to keep books. I can assure the Deputy, from personal experience, that you have got to keep books and that you have to account for every penny that comes in, and it is very much easier to ascertain what their real earnings are than in the case of people in other businesses. But the point I am coming to is this: is there anything unreasonable in asking an executor to make a return to the best of his judgment and belief? Deputy Cosgrave assumes that practically every man who dies would be in the position he has outlined. He is making the exception the general case—that they do not keep books and that there is no means of ascertaining the income of such a person for the year in which he died or for any year for which the executor must be assessed under this section.

I understand now that he is not anxious to sustain that because that is not so—that we must legislate for the exception. In other words, to follow what Deputy Finlay says, make bad law. We are legislating for the general body of deceased persons and executors. Most people keep books, or if they are employed in the public service or in other positions in which they are remunerated by salaries their incomes are easily ascertainable. All the executor has to do is, on the knowledge which he has or can get, to furnish a return which is correct according to the best of his knowledge and belief. If he is not able to do that, and if the estate warrants it—and any estate of which the administrator under this rule would be liable to income tax would surely warrant it—the executor can secure the assistance of a professional accountant or skilled assistance of that nature which will enable him to give a return to the Revenue Commissioners which will be satisfactory for their purposes.

Because the obligation is put upon the executor of making that return, again to the best of his judgment and belief, the executor will be entitled under this section, as he would not be entitled hitherto, to charge the cost of making that return against the estate. As the law stands at present, many executors do make returns for this purpose. This case arose where a person did make a return. As the law stands, if executors have to secure professional assistance to enable them to make that return they cannot recoup themselves out of the estate. If they did recoup themselves and their action in that respect were challenged in the courts, they would be held to be liable personally for the expense of making that return. This section proposes to remove that injustice and to put the executors in a position in which, having taken the necessary steps to satisfy the law, they will be able to recoup themselves for any expense involved.

Would the Minister give me an answer in respect of this case: A person dies in May, 1932. We come on to April, 1932. To what date can the Revenue Commissioners go back in respect of the income tax and sur-tax payable by the deceased person?

What date in April?

Say, April 6.

A trap question.

The question is not a vexatious one by any means. I could go forward further. I am only going that distance at the moment.

If there is, in fact, such a case, if the Deputy will write to me, I shall give him exact information.

That is not fair.

The Deputy has stated that the case is not a vexatious one.

The Deputy, then, has an instance in mind?

I am not admitting that either. I want to get the real meaning of the section.

The dates have been carefully chosen to make the question a difficult one.

I quite understand that. I am prepared to wait for an answer.

If the Deputy is prepared to wait, I shall answer the question on Report.

I am not prepared to wait until Report for an answer.

So many feathers are flying about the Chamber that my modest inquiry seems to have been lost. I inquired on an earlier stage of this Bill if sub-section (2) of Rule 18, beginning line 31, made any change in Revenue Practice. The point I made to the Minister was this—that if an executor or personal representative is liable to receive an assessment within three years in respect of the last year of income tax, what remedy has he against a beneficiary under the testament who is free to sue him within twelve months of the grant of probate? If, on one side, the beneficiaries are suing him for the purpose of compelling him to pay out the proceeds of the deceased person's estate and, on the other side, the Revenue Commissioners are making an assessment on him for two years after he has become liable to the beneficiaries, what protection has he? There may be some other provision allowing him to plead that in any action brought against him by the beneficiaries. If that is so, I shall be quite satisfied. I put that question to the Minister on an earlier stage of the Bill. I thought the Minister took a note of it but he did not. I respectfully submit that I was entitled to expect that the Minister would take a note of the point and deal with it in the course of the observations he had to make to-day. If the Minister is in any difficulty on the matter, I am quite prepared that he should deal with the point on Report.

I shall deal with Deputy Dillon's point more carefully on the Report Stage. As the case has been put to me at the moment, it appears to me that an executor must not distribute until he is satisfied that all the claims of the Revenue Commissioners under this section and other provisions of the Laws of Property have been fully satisfied.

Until he has got a certificate?

I ask the Minister to look into the matter more closely and to mention it on the Report Stage.

If the Minister is looking into the point raised by Deputy Dillon, I want to put forward what, I think, is not an unreasonable suggestion. Take the ordinary case of the administration of an estate. There is the executors' year. The executors put in their notice to creditors and if creditors do not put in their claims the executors are free to distribute. I do not think it is unreasonable to ask the Revenue Authorities to formulate their claims like any other creditors after due notice to creditors has been given. The only claim against an estate which can hold up the distribution of it amongst the beneficiaries is a State claim. That is being extended somewhat by this section.

I want to bring the Minister back to sub-section (2). Before doing so, I should like to say that the discussion in the last few minutes has emphasised the point I made when these Financial Resolutions were before us—that it would be quite impossible, under this provision, to wind up an estate until three years after death. I do not see how the Revenue Commissioners will be able to give a clear certificate enabling the executors to wind up the estate within that time. What I got up principally for was to ask the Minister to explain the meaning of the first two lines of sub-section (2). The Minister read the sub-section but he gave us no explanation as to the distinction drawn there between that period of six years and the period of three years after the date of death. I think there has been a good deal of confusion in this discussion. The confusion has arisen, apparently, between two periods of six years. There is a period of six years preceding the year of assessment referred to in sub-section (1) and there is a period of six years referred to in sub-section (2). Presumably, the whole of this refers to estates of deceased persons, and the only meaning I can take out of the first two lines of sub-section (2) is that the Commissioners may go back six years prior to death if claims are put in immediately or within twelve months, but if things are held up for three years after the date of death, then the Commissioners cannot go back six years but only three years prior to date of death and three years subsequent to date of death. I am asking this question with a general desire for an explanation, because it seems to me there is distinct confusion between the statement and the discussion which followed.

Deputy Cosgrave asked if a person died in May, 1932, and if the assessment was made on the 6th April, 1935, how far back could the assessment be made for. Is that right?

If a person died in May, 1932, and if the Revenue Commissioners tabled an assessment in respect to the estate on April 6th, 1935, how far back can they go under this Bill when it is passed into law?

The Deputy asks if the Revenue Commissioners made an assessment in May, 1932?

The person died in May, 1932, and the estate goes on in the usual course. On the 6th April, 1935, the Revenue Commissioners make an assessment in respect to the estate. I want to know how far back they can go.

They can go back and include the year 1929-30.

Will the Minister explain what is the meaning of sub-section (1), Rule 18? It is obvious that no matter at what period a person dies he is going to be held under this Rule.

The Deputy is too old a hand to try to believe that he can read sub-section (1) without any relation to sub-section (2).

Rule 2 says "No assessment under this Rule shall be made later than six years after the expiration of the year of assessment." In other words that means not later than six years after the person dies.

What assessment?

The assessment of the last year the person was alive.

Supposing that in the year 1929-30 a person had not been assessed, owing to some oversight, and had not made a return then, if he died in May, 1932, he would be assessed for that year. Up to the 6th April, 1935, the Revenue Commissioners could assess in respect to the year 1929-30, if through some cause or another he was not assessed, although liable to assessment.

Before we leave that case, which illustrates my point, let us take another one. Supposing the Revenue Commissioners put in a claim earlier than 1935, say in the year 1932, could they not go back to 1926?

They could. They can go back six years. They always do. As a matter of fact what happens is that the Revenue Commissioners make a provisional assessment. They say that the income of a person was £500 in a year, and the executors, if they are doing their duty to the estate, have to prove to the Revenue that it was something less. The point now is that in order to relieve both the executors and the Revenue Commissioners, when getting at the income of the taxpayer in that round-about way, the obligation is not put upon the executors to make a return in the first instance. Let it be quite clear that except for the special case in which a complete return was made, and that the person died before the assessment was signed, which this new sub-section is intended to cover, the Revenue Commissioners can always assess the relatives for income tax.

We are dealing, as far as the main debate goes, with a proposal in Rule 18 and with the subsections. Up to date, we have not got to the point of being allowed to discuss whether the proposals are reasonable or not, because the Minister failed to tell us what the proposals are. So far all that has happened is that we attempted to extract information which, I think, the Minister did not give. I would like to have some questions answered. The main purpose of sub-section (1) and Rule 18 is to enable an assessment to be made upon executors, whether or not a return has been made. I think that is what the Minister bound himself to.

I explained that half an hour ago, but Deputy McGilligan was not able to understand it.

The Minister explained that the purpose of the new sub-section (1) and of the new Rule 18 is to enable an assessment to be made upon executors, whether or not a return has been made. Coming to sub-section (2), in so far as there is a time limitation it overrides sub-section (1). I take it that is correct.

Yes, I said that.

Does sub-section (2) introduce any change in the law? I have been told that it does not by the Minister.

Why is it there? What purpose does it serve? I am taking sub-section (2) in its interrelation with sub-section (1) and I am told that it makes no change.

When the Deputy concludes I will answer.

I am asking whether sub-section (2) makes any change in the law with regard to sub-section (1) and the new Rule. Coming to the third sub-section, the Minister told us to-day that it imposed upon the people concerned no new liability. I wonder does he still abide by that? Not merely did he say that, but in answer to Deputy Thrift on the 1st June, according to the Official Debates, col. 319, he stated:

There is no change in the law in that respect. As the law stands at present, the executor is bound to make a statement that he has furnished a true and correct return to the best of his knowledge and belief. That is the law. He has to continue to do that.

That is what the Minister said. He previously stated, peculiarly enough, and this is why I think the House is befogged with explanations that do not always agree, on the same date, also, when introducing it, in column 315: "There is no power to require an executor to make a return in respect of the income of the deceased person," and he then goes on to say: "As the sub-clause imposes a statutory liability on the executor, the executor will, in future, be entitled to have any expenses which he incurs borne by the estate." So that, in the same evening, he told us that this imposes no new liability, and, previous to that, he said it did impose a liability, and as it imposed a new statutory liability a certain counter was included in the section, that being, that expenses could be claimed. I would like to have this point cleared up. Is not this new? It quite clearly is new. Sub-section (3) quite clearly is new, although the Minister said previously that it was the law. I would like to emphasise sub-section (2) of the new Rule 18 more than any of the points in sub-section (1) which, I think, is easy enough to understand, or in sub-section (3) which, I think, has only been befogged because the Minister made two contrary explanations. Does it make any change in the present law, and, if not, why is it here?

Is that what the Deputy wants to concentrate on? I may say that I think I have been over-exaggerating the Deputy's powers of comprehension. He asked me at the beginning what was Rule 18 of the General Rules of the Income Tax Act, 1918. I have told him what it was. I have told him how, by a process of legislation, passing through the Finance Act of 1925 and Finance Act of 1931, the position was arrived at where a person, having been assessed and having made a complete return, died before the assessment was signed, the Special Commissioners decided that the Revenue Commissioners had no power to make an assessment on the executors. I would like to get back to show that the only change this does make is a change in the machinery of making the assessment, and not a change in the principle. I get the Deputy back to Rule 18 of the Income Tax Act, 1918, the Rule which he asked me to read at the commencement of the debate on this section, which says, and I presume the Deputy has made himself familiar with the Rule:

"Where any person dies without having delivered a statement of his profits or gains chargeable to tax with a view to assessment thereon in due course, an assessment in respect of the profits or gains which arose or accrued before his death may be made at any time within the year of assessment, or within three years after the expiration thereof upon his executors or administrators, and the amount of tax thereon shall be a debt due from and payable out of the estate."

And I went on to show how the Finance Act, 1925, and the Finance Act, 1931, brought us to the position that there was a time limit of three years from the year of death of the deceased, within which the assessment could be made and that the assessment could be made back for six years from the year in which the assessment was made. This does not change the principle—the estate of the deceased could always be assessed for income tax—but it simplifies the manner in which the assessment could be made. The preceding practice, as I have already explained to the House, and I am sorry the Deputy cannot understand it, but I am not responsible for the Deputy's deficiency in that respect, was that the Revenue Commissioners made an assessment— in many cases, made an assessment which was possibly far larger than the income of the deceased warranted—and then the onus was imposed on the executors, if they were to do their duty to the estate, of satisfying the Revenue Commissioners that the assessment was an exaggerated one and should be reduced. That was the position up to this. In order to do that the executor had, I assume, to present to the Revenue Commissioners returns which would satisfy them that the assessment was an excessive one, and that was the general procedure. It is quite obvious that it was a complicated one. It might have been, if the Revenue Commissioners were unreasonable, a very expensive one for the executors, and, in order to simplify the machinery, and, I believe, in order to reduce the cost to the estate, we are now imposing on the executors the obligation of making a return in the first instance, to the best of their judgment and belief. They have got to do, as a first step, what they would have to do, as the law stands at present, ultimately.

That is the change and to the extent that we are only seeking to have done in another way what the executors would have had to do ultimately, we are not imposing any fresh obligation on the executors vis-a-vis their estate. If it is held that we are imposing a fresh obligation, it can only be on this assumption, that, when the assessment is made by the Revenue Commissioners, whether it is excessive or not, and whether the estate is justly liable for it or not, they would accept that assessment, and, in default of their duty to the beneficiaries under the will, would have paid the Revenue Commissioners what the Revenue Commissioners claimed.

I do not think that Deputy Thrift, or any person, would get up and say that the majority of executors would do that, if they were chosen to be the executors of the will because they were friends of the family and of the deceased, whom the deceased could trust to see that justice was done, and that, therefore, ultimately, they would have had to do—and this is the point I want to emphasise—what we are asking them to do here in the first instance. From the executors' point of view, the present procedure has its advantages also. As I pointed out before, because the obligation did not seem to be imposed on them, because no legal obligation was imposed on them, though an honourable and a moral obligation to do their duty by the estate was imposed on them, they might easily find themselves responsible for the whole cost of satisfying the Revenue Commissioners as to what should be a true and proper assessment on the estate of the deceased. The fact that we now impose a legal obligation on the executors of making this return enables them to recoup themselves for any reasonable expenses they may incur in that regard, out of the estate of the deceased. To get back to Deputy McGilligan's question, I said no obligation, but, whether this section were introduced or not, an honourable obligation would still——

Might I read the Minister's words? It was not a question of obligation at all. Here is what the Minister said—and this is not morality—"As the law stands at present, an executor is bound to make a statement that he has furnished a true and correct return to the best of his judgment and belief."

Before he gets a discharge.

"...is bound to make a statement that he has furnished a true and correct return to the best of his knowledge and belief." I suggest that is wrong; it is an incorrect statement.

At any rate, the Deputy is getting the correct one now. The Deputy is reading one passage— that is quite a usual thing for him when he quotes. You must take the debate as a whole, and relate it to whatever question was put to me before that. We are not discussing now what I said a few weeks ago; we are discussing what is the real effect of the section, and I have told it to Deputy McGilligan. If Deputy McGilligan does not understand, I cannot help him.

I understood another statement and the Minister could not help, either.

What I am anxious to know is whether this is going to put an added responsibility on, or mean added risks for, an executor. The point I want to get at is this: Under the new law the executor has to make a statement to the best of his knowledge and belief. We will assume he does that and, in so far as he has knowledge and belief at the time, he makes the statement. Let us suppose that, on the strength of that statement, a discharge is obtained, and the estate is distributed to the beneficiaries. Further information comes to light later on showing that the information was really incorrect and the income tax had not, in fact, been paid on the complete profits. Will liability then lie against the executor of a two-fold nature, in the one case to prove that he was not wilfully misleading the Revenue Commissioners when he was making the statement to the best of his knowledge and belief—a very difficult thing to prove—and, in the second place, would he be personally liable for the additional assessment of income-tax on profits on which income tax had not been paid? There are two distinct points there about which the Minister ought to satisfy us.

At present they can always make an additional assessment; the Revenue Commissioners can always make an additional assessment irrespective of what has been done before. If the estate is being distributed a question arises as to whether it is distributed before the expiration of the three years' period within which an assessment may be made.

My point is that the executor is not safe unless he waits three years.

Or unless he makes an attempt to satisfy himself that the return he is making is an accurate one. Supposing he has distributed the estate and supposing an additional assessment is made on him in respect of the estate, what will his position be? Will he be any better off than he would be now?

Are we in this Bill imposing an unfair risk on executors? I do not care whether or not it is present law; I want to get the law right if it is wrong.

If the Deputy wanted to raise that specific question, I suggest the right way was, as Deputy Dillon suggested, to put down an amendment recommending the deletion of paragraph 3 of sub-section (1). There would have been some value in the debate then.

I did raise it. I was partially satisfied with the Minister's replies, but I am not now as satisfied as I was when we had a discussion on another occasion.

I indicated to Deputy Thrift that if he put the point to me later I would consider it and deal with it, but the Deputy has not done that. I asked the Deputy, if there was any doubt in his mind, to put down the specific point. Deputy McGilligan asked why it was necessary to put in paragraph 2. I might ask Deputy McGilligan why, in 1925, the Government, of which he was a member, found it necessary, after having proceeded more or less in the same manner as we have done, to put in Section 8 (1) of the Finance Act, 1925:—

Subject to the provisions of this section, an assessment or an additional first assessment in respect of income tax chargeable for the year beginning on the 6th day of April, 1922, or any subsequent year may be amended or made ... at any time not later than six years after the expiration of the year of assessment.

In sub-section (4) it is stated:—

...none of the several acts and things mentioned in the foregoing sub-sections of this section may be done later than the end of the third year after the year of assessment in which the deceased person died.

The drafting of this amendment is on all fours with the drafting of the amendment of the 1918 Act, which is embodied in the 1925 Act. We happen to be substituting a new rule here for the old one and we are following the form of the old rule.

As we have to deal with a time limit, we are dealing with it in this way and there is no change in the existing law in this regard. The existing law is that you cannot assess further back than the sixth year from the year of assessment. We are putting a limit on that. We are saying that if a person dies in 1932 you cannot assess that person's estate for income tax in the year 1938. The latest date within which the assessment can be made from the year of the death of the deceased is three years. We have the self-same provisions in Section 8 of the Act of 1925. Deputy McGilligan ought to ask Deputy Blythe why he put them in there.

I would like to be clear whether the effect of the phrase, "to the best of his judgment and belief," is to protect an executor from an involuntary error when making a declaration. Does it protect him definitely?

Yes. If the executor has made the return to the best of his judgment and belief he will not be liable for penalties.

The introduction of these words, I submit, leaves this liability on the executor, that if a return is wrong he may have to prove that it was made to the best of his knowledge and belief. Is not that therefore the point that arises under this section?

Is there any reason why he should not prove it?

I do not know. I think that is different from the position previously. Now he is obliged to make a return to the best of his knowledge and belief. The man may be acting quite honestly, but if he makes what is a wrong return has he not thereby incurred the necessity for proving that he did not make a wrong return?

Is it not rather for the State to prove that the case the man made was or was not made to the best of his knowledge and belief?

Is it to be the practice that for the future the onus will be on the taxpayer or executor?

I would say it will ultimately become a matter for the courts, but I think at present the onus would be on the taxpayer. He would be liable for the penalty if the return were not made to the best of his knowledge and belief. I think as a matter of abstract justice the onus would be upon the Revenue Commissioners to prove that it was not made to the best of his knowledge and belief.

I am glad that the Minister agrees that as a matter of abstract justice the onus should be on the Revenue Commissioners. Will the Minister introduce an amendment to that effect on the Report Stage? The Minister has talked about the principle of abstract justice and Deputy Moore thinks that on the principle of abstract justice it would be quite unreasonable to ask the taxpayer, that is, the executor in this case, to bear the onus of proof. I want Deputy Moore and the Minister to collaborate and to find out whether in fact the onus of proof is to be upon the executor, and will they make the far-reaching alteration in the income tax code embodying that change, one which they have characterised as a principle of abstract justice? I would have thought that this came under a completely different rule, where things are supposed to be within the knowledge of those who are supposed to sustain the burden of proof.

Does the Deputy want us to do that?

Let me leave that point, for it is one that we will have to raise on the Report Stage. I want to ask the Minister a simple question again. Section (2) of the new Rule 18 makes no change in the law—the Minister said that. Would he say that again?

It makes no change in the existing practice, that is that assessments are not made later than three years after the year of death.

That it makes no change in the existing practice, is what the Minister is taking refuge in now?

No change in the law as regards the time limit.

Sub-section (2) makes no change in the law in any other respect. Will the Minister say if he thinks it has had any other relation?

I cannot see what the Deputy is getting at.

I want to see if there is any change. I am told there is no change as regards the time limit. I was criticised for my lack of intelligence for not understanding the Minister's implications. Is there not something more than time in this? Surely there is a wider scope.

Show us what the wider scope is. The onus of proof is on the Deputy to show.

Has this any relation to No. 1 of the new Regulations? Clearly it has. It is clearly making no change in the law. Therefore the time relation is now extended to a new type of person. Is not that a fact?

I am sorry that has not been clear to the Deputy. I think it is clear to everybody else but to the Deputy.

Section 5 should be wiped out altogether.

Section put and agreed to.
SECTION 6.
(1) The following rule shall be added to the rules applicable to Case III of Schedule D of the Income Tax Act, 1918, that is to say:—
"5. Nothwithstanding anything in Schedule A or the rules applicable thereto or Section 187 of the Income Tax Act, 1918, in any case where the annual rent payable for any premises occupied for the purposes of any trade, profession or vocation is in excess of the annual value ascertained as prescribed by the said Section 187, it shall be lawful for the Revenue Commissioners to cause an assessment to be made upon the person receivingor entitled to such rent in respect of so much of the excess of such rent over the said annual value as will, together with the amount of the assessment under Schedule A, make up the full amount of the income arising from the letting of such premises.
Any assessment made under this rule shall be computed in accordance with rule 2 of the rules applicable to this Case.
Rent for the purpose of this rule shall be taken to be the full amount payable by the occupier, and in arriving at the amount chargeable under this rule a deduction shall be made for any sums which the person receiving or entitled to the rent is obliged, by agreement with the occupier, to pay or satisfy out of the rent in respect of any rates or assessments which by law are charged upon the occupier, and for the cost of maintenance, repairs, insurance, and management, ultimately paid or borne by the person receiving or entitled to such rent.
Where an assessment under Schedule D is made under this rule no allowance shall be granted under rules 7 and 8 of No. V of Schedule A or Section 203.
Where a rent in excess of the annual value ascertained as prescribed by the said Section 178 is payable by the person assessed then, in arriving at the amount of the assessment under this rule, no deduction shall be made in respect of such rent, but the person assessed shall on making payment thereof be entitled, in addition to the deduction of income tax which he is entitled to make under the rules of Schedule A, to deduct and retain thereout a sum representing the amount of the tax on the excess of the rent over such annual value at the rate or rates of tax in force during the period through which such payment was accruing due.
Amendments 5, 8, and 11.
In sub-section (1), line 16, to delete the word "payable" and substitute the word "paid." (Patrick McGilligan.)
In sub-section (1), line 21, to delete the words "or entitled to." (Patrick McGilligan.)
In sub-section (1), line 60, to delete the words "so payable" and substitute the words "actually paid." (Patrick McGilligan.)

I am asking permission of the House to move amendments 5, 8 and 11 together as they are on the very same point. The point is a simple one and I think it can be explained briefly. The matter was raised here at an early stage of this Bill as to what was going to happen to a person who was going to be assessed on the new basis with regard to rent from business premises, business premises being defined as in the section. A special point was made as to what alleviation of the hardship was going to be if hardship arises by reason of this fact that a man might be assessed for rent payable to him whereas he may not receive the rent for a variety of reasons (1) the person who was renting the premises from him might have fled, or might have departed before the rent was due, (2) the person who had rented the premises from the owner might have become defunct in a business sense before the rent accrued, or apart from business default of the average type a person may find himself unable to pay. There are a considerable number of situations clear to anybody who considers the vicissitudes of business life which might bring it about that the owner of the premises might not receive the rent payable and "payable" is the word used. I want to get that point raised and I want to see if some amendment cannot be phrased to meet the point.

An amendment has already been phrased to meet the point.

It is not sufficient at all. Amendment No. 9 is not sufficient but that can be discussed when the amendment is moved. I want the Bill to say precisely in all these cases not the rent payable but the rent paid. In other words where this new income tax has been put upon the owners of business premises I want to see that they should be assessed upon the actual money which they receive as rent for these premises and not upon what they might receive. It might be said that this might lead to fraud and that there would be collusion between the occupier and the owner and that something less than the rent fixed might be paid and that the owner would get off something; that there could be an arrangement between himself and the occupier which would make it profitable for both. The ordinary law would meet that situation. The question of fraud would clearly arise. In the two points referred to, I am moving that the word "payable" should be substituted by "paid" or "actually paid." Amendment No. 8 is where I want to get the phrase to read "the person receiving such rent." That is slightly a different point from the others, but it has afforded an apprehension of the same inadequate situation arising. The person actually in receipt of the rent may not be the person entitled to the rent. If there is going to be in the peculiar circumstances that might arise any differentiation then the assessment might be made upon the person actually entitled to receive the rent.

Will the Deputy who puts the amendment tell the House how he reconciles the principle which it proposes to introduce here with the general basis which has hitherto been adopted for income-tax purposes, which has always had regard to the income earned or receivable in a particular year, irrespective of whether it was received in that year or not? That is one of the problems which the Deputy's amendment raises. I should like him to state how he reconciles the new principle which he proposes to introduce in this amendment with the general basis upon which the Income Tax Acts and law has hitherto rested.

I would answer, if I had the quotation handy, by referring to what the Minister said was the revenue practice. The revenue practice departed from what was the actual rigid terminology used in the Act and, in fact, where rent was not received because of default of a business type that was taken into consideration. If that is the practice I do not see where we are departing from it very much in making the law fit the practice which has grown up contrary to the law because of the very inequities which have occurred.

The Deputy said that amendment 9, which was proposed to meet the particular case to which he has referred, did not satisfy him, that he is casting his net wider. I should like him to say how wide he is casting it, and how the attitude which he takes up in that regard can be reconciled with the existing practice, which was always the practice under his Government.

I have been asked how I reconcile this with a certain principle. My reconciliation is that the principle was not observed in practice; that my amendment is nearer the practice than the law. I want to bring them into consonance. The Minister refers me to his amendment. All I can say about his amendment is that it clearly shows that he is not disposed to stick to the principle he has attempted to put me up against. He is going to make certain exceptions. Why? Because the practice has shown that the rigidity of the law was impossible. The Minister is, to a certain extent, proposing to make the law fit the practice. I object that it does not go far enough.

Possibly Deputy Thrift might have something to say in support of Deputy McGilligan in the matter.

Really, I would prefer to accept the Minister's suggestion. I should like Deputy McGilligan to show his reason for not thinking amendment 9 is acceptable. I drafted an amendment on the same lines from a totally different angle. It was to enable the recovery of tax which failed under the previous Act, because the collection of this was passed from Schedule A to Schedule D. I am inclined to think that the amendment I have drafted is the best way of meeting the situation, but I am not going to move it in view of the Minister's amendment.

My amendment has been drafted to meet the point raised by Deputy Thrift—to make it quite clear, so that there will be no doubt in the matter.

I think it is up to Deputy McGilligan to show us why he thinks this amendment goes further than the amendment suggested by the Minister?

I want to be clear-cut and definite on this. We were told by the Minister who left the principle in the early stages that, in fact, the points made from this side of the House, and by some Independent Deputies, were to a certain extent covered by the practice.

We are discussing Deputy McGilligan's amendment and not what I said; at least, I hope we are.

I can discuss whatever I please as long as it is relevant, and I am not going to have the Minister as the ruler of order in the House, by any means. The Minister has himself asked me to say why his amendment is insufficient. I thought that was the point. Now he asks me to discuss my own amendment. If the Minister has to carry on on certain financial injections from time to time he ought to get them more frequently in order not to have confusion of thought. If the dope does not carry him far enough, let him get them stronger, or take them more frequently. I said previously that the Minister answered certain points made by saying that the principles upon which we were founding certain objections were being observed in practice by the Revenue Commissioners.

To this extent, that if the debt were a bad debt, and the rents were not collectable, of course the Revenue Commissioners would make the usual allowance for bad debts, as they do in all businesses.

We were told the Commissioners have a certain practice, but just how far it went was not explained by the Minister for a very obvious reason, because he did not know. I decided to put down an amendment which would make it clear in one respect that there could be no attempt to get from a man payments in regard to rent except in regard to rent which he actually received, and, as I said, if there were a more satisfactory way of meeting that case—there might be collusion, and that argument might be made against it—I am prepared to get phraseology for it. We were told that the practice was in accordance with the law. I want to have the law changed so that people will not be depending upon the practice of the Revenue Commissioners, but will have legal rights to assert embodied in certain phraseology. The Minister proposed to add certain exceptions, to add at a particular point that deductions shall be made "for any portion of such rent wholly and irrecoverably lost, for any portion of such rent voluntarily forgone by agreement with the occupier,"—and then the thing follows as before. I think there is still a certain amount of leaning against the man being assessed. We are going to have the assessment made. The procedure under the Minister's amendment will be that there is a rent payable out of business premises as defined and an assessment will be made. Certain correspondence or an interview will take place after that, and then the Revenue Commissioners may make deductions or make allowances in respect of certain things. I think it is a more clear-cut thing to have the word "paid" used. Let it be the word "paid" or the word suggested in the course of the debate previously, "received." I should say that nine-tenths of the annoyance caused, particularly by income tax collections, arises not so much in the end from the amount collected as from the annoyance, trouble, correspondence and interviews that have to be gone through to get to the point of what truly has to be paid.

Anything that is going to alleviate the lot of the taxpayer in getting something clearly before him as to what he is to pay in the end is a thing that ought to be sympathetically considered. When you say "rent paid" it seems to me that the evidence that a man has to produce on that is an easily produced thing. There is a receipt for rent; there is clear evidence to be given of moneys received. I want to found the whole thing on that. My intention was, not so much to get reduced payments, although that is at the back of the amendment, as to get rid of all this terrific trouble that one has to go through with regard to proof of evidence and all the rest in connection with payments of this type. Again to get back to what the Minister said: Why introduce a new item away from the principle of the income-tax code? The Minister himself is going away from it.

The practice has gone away from it and the amendment that has been suggested shows the inclination to go away from it. I think it is quite right to go away from it when you are putting on a new tax. If this were simply continuing the old system which people had got inured to by years of experience, then a case might be made against it. I think that the equities of the situation, with this new tax, a thing not previously considered, are that the man will pay and should only be asked to pay upon the rent paid to him, the rent received by him. We can leave out the smaller points at the moment as to whether he is the person entitled to receive or the person actually in receipt of the money. The point is that we should get him to pay on the money received.

My sole objection to the Minister's amendment is connected with the use of the words "wholly or irrecoverably lost." I can envisage a taxpayer upon whom an assessment is made and who has received no rent at all in that year. The rent is not coming in. He has got nothing from it at all, but still it might be quite in the air as to whether he might be able to recover some portion of the rent in future or not. He would be undoubtedly liable under the Minister's amendment for tax and he would have to pay it. Events might prove that the rent was completely lost and I do not see how he could recover from the income tax authorities the income tax he had to pay. In principle I would accept the Minister's amendment, though as I said I do not think it is the right way of going about it. I do see that difficulty of working it, that at the time of making the assessment on the taxpayer it might be impossible to say whether the rent is wholly or irrecoverably lost or to what extent it is wholly or irrecoverably lost.

I regret that Deputy McGilligan was not more precise. I do wish he had told us what gap was left uncovered by the amendment down in my name. The amendment provides that no assessment will be made "for any portion of such rent wholly and irrecoverably lost, for any portion of such rent voluntarily forgone by agreement with the occupier." I am sorry that Deputy McGilligan did not state explicitly what was the gap left uncovered by that. I am sorry that he did not address himself in greater detail to the matter and state how he reconciled the new principle that his amendment would introduce into the income tax law and the existing practice. The existing practice and the general principles adopted for income tax purposes is to take the income receivable in a particular year irrespective of whether the income is actually received in that year or not. It is the only fair way, because if we were to take into consideration the actual income received in a year, we might find that, owing to the fact that debtors delay in settling their accounts, whereas in one year a person might possibly pay income tax at a low rate, in the next year when trade was good and times were better and the debtors floated in to settle, the taxpayer might possibly be assessed for surtax. It is that principle which Deputy McGilligan proposes to introduce in this amendment.

It is because in certain circumstances Deputy McGilligan's amendment might make an income tax payer be assessed at a greater rate of tax than is provided that I am going to suggest to you, a Leas-Chinn Comhairle, that the amendment is out of order. We will take the case of a taxpayer who enjoys a rental of £1,200 a year from business premises and £200 per annum from other sources, his total income being £1,400 per annum. Under Deputy McGilligan's amendment it might possibly happen that a taxpayer who hitherto had promptly received his rents quarterly in advance, in a certain year would only receive £900 per annum. The taxpayer continued to enjoy the £200 which he had from other sources. In that particular year that taxpayer would be assessed under Deputy McGilligan's amendment on an income of £1,100, but his tenant was an honest tenant and in the succeeding year he paid up his five quarters' rent. He paid up the quarter which was in arrears and paid the other four quarters in advance. That is to say he paid in that year £1,500 and the taxpayer still continued to enjoy his £200 per annum from other sources. He is in that year assessed not merely for income tax, but under Sections 1 and 2 of the Bill which have been adopted by the House he is liable, as his income is over £1,500, for surtax. Therefore this amendment of Deputy McGilligan, prepared with so much care and with so much consideration, would impose an additional burden upon that taxpayer and can therefore only be moved from the Government Benches. I suggest, a Leas-Chinn Comhairle, that that is out of order.

Is the Minister putting forward that suggestion seriously at this stage of the discussion after the House has been discussing the amendment for something like 20 minutes?

Even so I am entitled to make the point that in certain circumstances, in the circumstances which I have outlined, the amendment imposes an additional burden on the taxpayer and is therefore out of order.

Surely the Minister should have made the point before the amendment was moved?

I was hoping that Deputy McGilligan would accept amendment No. 9. I asked him to state precisely what was uncovered by amendment Number 9. If he had shown that there was any reasonable way to meet him in regard to the difficulties which he alleged were present in amendment No. 9 I would have endeavoured to meet him but he did not do that. I was anxious to give him that opportunity.

Although Deputy McGilligan did what he did in regard to amendment 9 it would not affect the amendment being moved.

Whether I raised my objection at the beginning, or now, I contend I am entitled, at any stage of the debate, to make the point that the amendment is out of order. I do make it in view of the fact that no additional burden such as the amendment imposes can be imposed upon the people except moved by a member of the Government.

On the point of its imposing an additional burden we have no definite proof. The Minister used the word "may." He was very explicit. I took a note of the figures and I say we have no definite proof that it would raise the burden.

May I say I gave notice to the Ceann Comhairle that I would raise this point?

I understand that. But there is no proof before the House that it will increase the burden and the Minister has said definitely that it may.

It would in certain circumstances.

Is the Minister to be allowed to pile up one ludicrous hypothesis upon another and deduce from that that the tax may increase the burden upon the taxpayer?

It is no ludicrous hypothesis. It would, and must increase the burden.

The ingenuity of the Minister is naturally directed to weaving these impossible hypotheses so that he can come along and ask to have matters ruled out of order.

I have no option whatever but to rule the amendment in order. It is merely hypothesis that the Minister has put forward. This matter should have been raised before the amendment came on for discussion. The point is pure hypothesis and nothing further. I rule the amendment in order.

I suggest I am in order in contending that the amendment would, in certain circumstances, impose a tax upon the people.

The Minister's proof is not satisfactory. He said he might.

I said I would in certain circumstances.

That is not sufficient for me and I rule the amendment is in order.

I want to ask the Minister if he would refer to the point about the words "irrecoverably lost." At the time when the tax is levied it might be impossible to say that.

I do not know what exactly the Deputy is getting at. If it seems clear to the Revenue Commissioners that the money is lost beyond reasonable hope of recovery the tax will be allowed to stand over in that case, but there would be no question of remitting the tax. In the circumstances I have related to the House, the better thing would be that the tax should be allowed to stand over rather than that a new assessment should be made, when the taxpayer would recover money that seemed irrecoverable.

Supposing for the sake of argument the matter was dependent upon the result of an action at law. The owner of the property may say: "I have no hope of winning this action; I may lose it." Would the Revenue Commissioners have power in that case?

They could allow the tax to stand over. They would not attempt to collect. They always have power to afford time where the collection would impose hardship.

I am prepared to accept the Minister's amendment No. 9 and not move mine.

With regard to amendment 5 does Deputy McGilligan propose to move it?

: No. Once it has been ruled in order I am satisfied.

Amendment, by leave, withdrawn.
The following amendments were on the Paper:
6. In lines 17 and 53, to insert after the word "trade" the words "or solely for the purpose of any."
7. In sub-section (1), lines 17 and 53, to delete the words "profession or vocation."

We had a discussion upon the matter raised in my amendment in the Financial Resolutions that were before us. Clearly it is a difficult matter to settle, in the case of a premises partially used for professional purposes, such as the consulting room for a doctor or a barrister, what value should be put on the part of the house used for that purpose, as distinct from the dwelling-house. It seems to me the best plan would be to insert the words "or solely for the purpose." That is to say you would avoid having to decide what valuation should be put upon one room if that room is used for a professional purpose as against the rest of the premises used as a dwelling house.

I am afraid I could not accept this amendment. I think it is of much wider implication than the Deputy has in mind. It would, for instance, have the effect of taking outside the operation of the section each office building, a small portion of which is sublet and used residentially, and it would naturally encourage such sub-letting because it would have that effect——

I do not think so.

There is the fear. Also, as the amendment is phrased, the courts would hold that the section did not operate in the case of office buildings or blocks of offices occupied by several professional men, on the ground that the section as amended applied only to premises used solely for the purpose of one profession or vocation. Apart altogether from that, the adoption of the amendment in my opinion would lead to a considerable loss of duty proportionately. Any office building of which any portion was sublet for residential purposes, so far as I can see, would come under the terms of this amendment, and would be exempt from the operations of the section, and the courts might conceivably hold that even if there were no sub-letting for residential purposes the office should be used solely for one profession or vocation.

I think the Minister has misunderstood my suggestion because my words do not touch trade at all. Office buildings would be in exactly the same position as in the Bill if my amendment were accepted. I think any premises let for trade purposes as premises would still be liable. The words I propose to introduce are "solely for the purpose of any profession or vocation." I do not think there is much revenue involved at all, but the difficulty is very real. Take the case of a house in which one room is let as a doctor's consulting room. The doctor is interested as to the amount of the estimated value of the room, the landlord is interested, and the Revenue Commissioners are concerned because of the revenue. I do not see how you can at all get an agreement between these two parties as to what value should be put upon that particular room. There certainly will be a great deal of inconvenience, discussion and correspondence in arriving at the value. That seems to be the end to which the section leads. I do not think it is worth while, for the sake of the small amount of revenue that would arise, to introduce that very complicated matter to arrive at the valuation.

Would it be possible to have amendment 7 discussed at the same time? They are very much the same. I think it would shorten the whole procedure.

I take objection to the amendment moved by Deputy Thrift because of the answer he has given to the Minister, who misunderstood the object of his amendment. This whole thing would be very much more easily debated if we understood what is in the mind of the Minister on the scope of this. What does he intend to catch? Further we have the answer that he made, in rather a hesitating way, on a previous day. In answer to Deputy Good he said he understood there was a provision under the valuation law to assess the valuation of a shop separately from the residential portion of a premises and he said that might come into force here. If there was an assurance that it would come into force here a lot of this objection might be met.

In one of the Greater Dublin Bills there is a proviso whereby offices were separately valued for the purpose of the franchise.

I am only quoting the Minister—that there is a provision under the valuation law which may come into force here to assess the shops separately from the residential portion of premises. If that was meant to be established somewhere or other under this Bill as the practice and procedure, then the matter is very simple, but the matter is only simple if we get an answer from the Minister previously as to what he intends to catch. He founded his arguments almost entirely on premises used for the purpose of trade, and on the contention that in the case of premises used for trade purposes a man should pay not upon valuation, but upon the actual amount received. There would be considerable agreement as to that, but when he goes into the wider field of profession or vocation, the Minister takes as an objection to Deputy Thrift's amendment, that if you imagine a big building used for offices, and if one portion were sub-let for residential purposes, then the whole building might be deemed to be excluded for this tax. Surely that does not arise under Deputy Thrift's amendment because he leaves out the phrase "occupied for the purpose of any trade." Whatever was the force originally intended Deputy Thrift's amendment does not interfere with it.

What about a block of buildings?

Yes, for professional purposes. So far as the trade side is concerned Deputy Thrift's point has no interaction on the particular point of view. Surely that must be agreed to? So far as the use of buildings for the purpose of trade is concerned the full meaning is still there, and is not affected by Deputy Thrift's amendment. He has proposed to put in these phrases after the word "trade," and he does not say "a profession or trade" but "any profession or trade." Take a suite of offices and say that one is let for the purpose of a profession, and that that might get the whole premises excluded. I do not know that it would. I do not know what he is founding his argument upon when the phrase used by the Deputy is "solely for the purpose of any" profession or vocation. Surely, if you had a different number of businesses of the trade type in an office, the trade phase would override every other phase, and the building still stands for tax as long as there is a trade being carried on in it. If not, then we are getting back to the business of different valuations for different portions of premises and, of course, if so, it is very equitable—it is very definitely to be regarded as equitable in that case. I never proposed to remove the provision that a building occupied for the purpose of any trade, or profession, should be liable, but we should clearly understand what is meant. I do not know what the definition of "profession" or "vocation" is likely to be extended to cover. "Profession" may have a fairly well defined meaning as far as law is concerned, but with regard to "vocation" I doubt very much, and I do not know if there is anywhere in the income tax code any real definition of these two words. I think in the end it comes to whatever the Commissioners like.

That is my first difficulty. The second difficulty I have in the matter is with regard to the mixed premises. It is becoming the practice in this town that, instead of as under the old custom both medical men and lawyers lived near the centre of the city, nowadays they have a room, or rooms, in premises in or near the heart of the city, and they live somewhat more often than previously outside the city boundary. I want to know whether if a doctor has a room in a house in one of the main centres of the city, and the remainder of the house is being used for a residence,—I want to know whether the fact that a couple of rooms are being used for a profession overrides the general quality of the house, and whether the whole house will be assessed. Supposing a doctor rents a whole house, as he may have to in some cases, and pays the rent on the whole house to the owner, and uses a room or two rooms for consulting purposes, is the owner going to be made pay on the whole rent received or is there going to be a division or an apportionment as between the rooms used for the purpose of a profession and the upstairs portion which may be regarded as residential? I think it is quite a common feature at present that the upper rooms in such cases are let in flats, and that the rest of the premises, the two rooms on the ground floor, are used for consulting purposes. Supposing the house is in possession of one man and the doctor is paying rent for the whole premises, is he going to be assessed on the whole lot? If not, I would find it easy enough to accept the phrase, if we could have the word "vocation" defined. The scope should not be too far flung. The Minister, during the early stage, said that he did not think that any of these peculiar cases would arise in the course of the present year, because he said there would be practical difficulty in getting the new proposals into operation. I suggest that it would be a good thing to leave the simple form for this year to premises used for the purpose of any trade, and if he can see arising out of the experience of the operation of this tax this year, any easy way of extending it to the mixed premises, then it might be made a proposal next year. But particularly as he says there are practical difficulties in the way will it not be much simpler to have the tax simplified—to have it applied only to trade and let the other things arise later?

If the Deputy will, at this stage, accept No. 9, I shall consider what he and Deputy Thrift have said in relation to amendments 6 and 7.

Amendment 9 is entirely different.

If he will agree to withdraw these amendments now, he can put them down for Report Stage if he is not satisfied with the amendment which I shall consider, but which I am not promising to introduce.

I believe that Deputy McGilligan's suggestion is better than my own. I was specially concerned with those premises used for mixed purposes—mainly as a private residence but partially for professional purposes by a doctor or somebody else.

Amendments 6 and 7, by leave, withdrawn.
Amendment 8 not moved.

I move amendment 9:—

9. In sub-section (1), line 30, after the word "made" to insert the words "for any portion of such rent wholly and irrecoverably lost, for any portion of such rent voluntarily forgone by agreement with the occupier, and"

Amendment agreed to.

I move amendment 10:—

In sub-section (1), line 37, after the word "rent" to add the words "For the purposes of this rule the term ‘maintenance' shall include replacement of the whole or any part of the premises where the replacement is reasonably necessary to maintain the existing rent or letting value of the premises; and shall also include additions or improvements to the premises if no increased rent is payable in respect of the additions and improvements; and shall also include all additions and improvements made in order to comply with the provisions of any statute or the regulations, byelaws or requirements of a local or sanitary authority.

For the purposes of this rule the term ‘insurance' shall include in addition to insurance against fire, insurance against storm, tempest, riot and civil commotion and insurance of any life or lives upon the duration of which the tenure of the premises by or the estate or interest therein of the person chargeable depends."

We had some discussion about this matter before. It may be quite true that the term "maintenance" is pretty well understood by the Revenue Commissioners, but I have been making inquiries and I find that there is a good deal of diversity of opinion amongst inspectors as to what is covered by it. I have, therefore, proposed an amendment which embodies several things about which there might be doubt as to whether they should be regarded as ordinary repairs, deductions being allowed in respect of them. The amendment covers, for instance, the replacement of whole or part of premises where the replacement is reasonably necessary to maintain the existing rent or letting value of the premises. That does not mean that any extension or capital outlay will be covered but merely outlay which is necessary to maintain the property at its present value. It is, I think, reasonable to contend that that should be allowed as a maintenance expense. The amendment also includes "additions or improvements to the premises if no increased rent is payable in respect of the additions or improvements." Again, the same point arises. This does not cover capital outlay which will enhance the value of the property. The amendment also covers "all additions and improvements made in order to comply with the provisions of any statute or the regulations, byelaws or requirements of a local or sanitary authority." If a property-owner has to expend money to meet statutory requirements, I think he ought to be allowed to deduct the amount of his outlay from his receipts from the property before he is assessed to income tax on the property. Finally, the amendment provides that "for the purpose of this rule the term ‘insurance' shall include, in addition to insurance against fire, insurance against storm, tempest, riot and civil commotion, and insurance of any life or lives upon the duration of which the tenure of the premises by or the estate or interest therein of the person chargeable depends." I think all the items I have mentioned represent reasonable deductions before the actual income-producing value of the property is arrived at. If they are agreed upon as reasonable deductions, it is much better to have them set out as such in our law than rely on individual interpretation as to what the term "maintenance and repair" means.

I am unable to accept this amendment. The words "maintenance, repair, insurance and management" have a perfectly well understood significance in connection with the assessment of property and provision is made for such an allowance as the Deputy seeks in the case of ordinary Schedule A assessments in rule 8 (5) under the Income Tax Act, of 1918, and other enactments. The allowance there is a fairly generous one. I cannot see how, in this particular case, there is any justification for interpreting the words "maintenance, repair, insurance and management" in a different way from the manner in which they are at present interpreted or how the proposition, that persons in receipt of a particular kind of income which this section seeks to charge, should be given the benefit of a new principle, can be defended. I cannot see that there is, in all the circumstances, a good case made for this amendment, particularly in view of the rule I referred to, which states that if the owner of any land or house to which the rule applies shows that the cost to him of maintenance, repair, insurance and management, according to the average of the preceding five years, has exceeded in the case of a house, one-sixth part of the valuation, he shall be entitled, in addition to any reduction of the assessment for the purpose of the collection, to the repayment of the amount of the tax in excess.

Does the Minister object to the amendment because it claims that certain things ought reasonably to be regarded as repairs or maintenance or because it is unnecessary to specify these things?

I think the existing allowance made is, in the circumstances, reasonable.

Surely the whole basis has been changed and it is not fair to quote what has been done in the past when you are changing the basis and making it dependent on actual profits.

Owing to the fact that in this country the valuation, in a great mass of cases, is lower than it is elsewhere and owing to the fact that the same system does not exist here that exists elsewhere, whereby the valuation is determined at five-year intervals by the actual letting value of the premises, a large number of people have been escaping tax here in respect of income derived from property which they would have had to pay if that income had been derived from any other source. This allowance was considered to be reasonable when income tax came to be imposed and it is a reasonable allowance now. If the owner shows that the cost of maintenance, repairs, insurance and management exceeded in the case of a house one-sixth part of the valuation, he is entitled, in addition to any reduction of the assessment for the purpose of the collection, on making a claim, to a repayment of the amount of the tax in excess. If he shows that the actual amount which he expends exceeds one-sixth of the rateable value of the property, he can come forward and claim the excess. In fact, in present circumstances he has got an allowance for the actual amount he expended on maintenance, repairs, insurance and management. There is not from that point of view very much purpose in the amendment. I think there is not, in any event, any justification for the particular purpose of this amendment, in giving a quite different interpretation to the words "maintenance, repairs, insurance and management" than has been generally adopted hitherto in relation to this question.

One would think from what the Minister has said that I was proposing by the amendment that the property owner should be allowed to deduct the cost of maintenance. That is not so. It is the Minister who is proposing that in the Bill. He proposes that the property owner shall be allowed to deduct the actual cost of maintenance. All I am trying is to show in law what we mean by "maintenance," and to make the meaning in the Minister's Bill clear to the ordinary person, so as to enable him to put in a proper legal claim for such expenditure. I am taking the Minister's own section and explaining what I would regard as a fair interpretation of the word "maintenance." If the Minister suggests any of the things I quoted are not reasonably entitled to be considered "maintenance and repairs" let him argue that, but let him not say that I propose to change the basis.

If the Minister had any experience of maintenance he would know that the claim is always put up.

Amendment put and declared lost.
Amendment 12 not moved.
Question—"That Section 6, as amended, stand part of the Bill"—put and agreed to.
SECTION 7.
(1) Where an individual who is resident in Saorstát Eireann and is not resident elsewhere claims and proves to the satisfaction of the Special Commissioners that he is entitled to the beneficial ownership of any stock, shares, or security to which this section applies, the following provisions shall have effect, that is to say:—
(a) such individual shall be entitled to repayment of twenty per cent. of the income tax applicable to any dividend or interest received by him in respect of such stock, shares, or security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of the Income Tax Acts;
(b) in estimating the total income from all sources of such individual for the purposes of income tax and sur-tax the amount of any dividend or interest in respect of such stock, shares, or security shall be deemed to be diminished by twenty per cent.
(2) This section shall apply to all stocks, shares, and securities issued for public subscription after the passing of this Act in respect of which the Minister for Finance certifies that he is satisfied, after consultation with the Minister for Industry and Commerce, that all the following conditions are complied with in relation to such stock, share or security, that is to say:—
(a) such stock, share, or security is or was issued by a company which complies with the following provisions, that is to say, such company—
(i) is incorporated by or under the laws of Saorstát Eireann, and
(ii) is a company limited by shares within the meaning of the Companies (Consolidation) Act, 1908, and
(iii) is managed and controlled in Saorstát Eireann, and
(iv) carries on or (in the case of a company which has not commenced to carry on business) intends to carry on its business wholly or mainly in Saorstát Eireann; and
(b) the capital raised by the issue of such stock, share, or security is or is intended to be or has been devoted to the establishment or extension in Saorstát Eireann of one or more industries as defined by this section; and
(c) no part of the said capital so raised is intended to be or is being or has been used for the purpose of acquiring (directly or indirectly) an existing business or any share or interest in an existing business or of purchasing investments, or of paying off existing loans or debentures; and
(d) such issue of stock, shares, or security is so described and designated that it is readily distinguishable from all other (if any) issues of such company.
(3) Every warrant, cheque, or order drawn or made for the payment of any dividend or interest in respect of any stock, share, or security to which this section applies shall indicate clearly either (as the case may require)—
(a) that the whole of the sum for which such warrant, cheque, or order is drawn or made is a payment of or on account of dividend or interest in respect of such stock, share, or security; or
(b) that a part (the amount of which is separately stated) of such sum is a payment of or on account of such dividend or interest.
(4) Any stock, share, or security to which this section applies shall cease to be a stock, share, or security (as the case may be) to which this section applies if and when the Minister for Finance certifies in relation to such stock, share, or security that he is satisfied, after consultation with the Minister for Industry and Commerce, either—
(a) that the company by which such stock, share, or security was issued has ceased to comply with the provisions set forth in paragraph (a) of sub-section (2) of this section; or
(b) that the capital raised by the issue of such stock, share, or security has been or is being devoted wholly or partly to purposes other than the establishment or extension in Saorstát Eireann of one or more industries as defined by this section; or
(c) that such capital is being used wholly or partly in contravention of paragraph (c) of sub-section (2) of this section; or
(d) that such issue of stock, shares, or security has ceased to be described and designated in accordance with paragraph (d) of sub-section (2) of this section; or
(e) that sub-section (3) of this section is not being complied with in relation to such stock, share, or security.
(5) In this section the word "industry" means any trade or business whatsoever save and except the purchase and sale of imported coal, the manufacture or distribution of gas for lighting, heating, or power, the carrying on, organisation, or conduct of inland transport, the provision of amusement or entertainment of any kind, the holding (otherwise than by way of investment of reserve or subsidiary funds) of or dealing in stocks, shares, or securities, whether of all kinds or of any particular class or classes or of one or more particular companies.

I move: In sub-section (2), line 25, to delete the words "after the passing of this Act." This amendment introduces a new principle. The object of the amendment is to make the section apply to all stocks and shares that otherwise fall within the conditions set out in the Bill. It seems to me, if we are going to introduce this principle of differentiation in favour of investment in business and in industry in Saorstát Eireann, there is no reason at all for confining the concession to business started, or to investments made after the passing of this Bill. In fact there is a much better case if we are going to differentiate between two classes of investments by reference to time, for giving the concession to investments made before the introduction of the Bill, because in investments made before the introduction of this and other Bills coming before the House people had to take risks that they are not obviously going to take now. I cannot imagine any justification for the section as it stands, in the circumstances in which we find ourselves. We have high tariffs, in fact, prohibitive tariffs, imposed, and we have proposals in the Control of Manufactures Bill which are so extensive in industries that could not be called manufactures, that they are going to cut out competition. Therefore, the person investing hereafter, so far as the Government can do it, invests with the certainty of being able to make exorbitant profits from the consumer, and on these exorbitant profits he is going to pay less income tax than the man who invested money when the risks were greater, and who was not in the same position to fleece the taxpayer. If the principle is introduced at all it should be introduced in a general way. It should be possible for residents here, not residents elsewhere, who have incomes from investments in a business carried on only or mainly in the Saorstát, to have this particular relief. I can see no argument that the Minister could possibly put up against that. The argument that he mentioned in certain other cases was that of the cost. I do not know what the cost would be, but I am satisfied, without quoting the document that has been quoted already, that it would be possible in some way to make good the loss occasioned by the adoption of the amendment. In any case the loss in the present year, whatever it would be in subsequent years, would be by no means the loss of the full revenue. I hope the Minister will meet it. It is an unfair provision. I think the passage of the proposal in its present form would have a deleterious effect in certain directions. It is poor recompense to those who took risks. It will possibly lead to a further demand. It may even lead to people in certain directions making claims for greater concessions. I can quite well imagine people in certain cases holding off from investing in the hope that agitation for bigger concessions will be successful.

Is it permissible to refer to the general principle of the section on this amendment?

When the amendment has been disposed of.

I join with Deputy Blythe in asking the Minister to consider the amendment, and I would like to draw his attention to one aspect that has not been presented. This section proposes to give preference to persons who invest in certain Irish securities. I suggest to the Minister that that exclusive benefit to enterprise floated after the passing of this Budget will have this effect. There will be a great many people—Nationals of this State— who, in the ordinary course of commercial affairs, will feel a certain reluctance to holding themselves out before the public as looking for favours of this character. The average man who is going to stake his capital in Ireland in business enterprise is not going to be greatly influenced by this concession. If a man is going to run a successful business he is not going to be induced to do so by the concessions that are offered but, to the fraud, and to the fellow who is a failure, this is the very kind of inducement that will draw him into the promotion market. I think the only result of this preference will be to induce persons, who, in their very nature have not got the material for success, into commercial ventures. I think the Minister should reconsider the matter. Already I know of certain persons actually engaged in making preparations for the floating of a company, and far from being encouraged to do so by this section, they find themselves in a certain predicament, because, regarding their proposition as commercially sound, they feel that they require no inducement of this character.

I do ask the Minister to consider whether he does not think that this kind of concession will be more a temptation to a company promoter than it will to the businessman who really means business and who has confidence in his ability to carry on successfully. The other matter has been mentioned, and I think it should not be lost sight of, that it does seem rather odd that companies which have overcome the various difficulties that they encountered when the State was being founded and set on its way should now be penalised in favour of those who were not prepared to take the risks they did. I do not want to labour that question. It has been already dwelt on in the early stages of the Bill and Deputy Blythe has referred to it now, but we cannot shut our eyes to the fact that this section calls on those who staked their money on the success of this State to shoulder a burden in order to relieve others who preferred to wait and who required inducements to come into the commercial life of this country, and, without which inducements, they preferred to keep their money invested abroad when they knew perfectly well that the State was badly in need of its assistance. I think that is a regrettable procedure altogether, but if that does not affect the Minister, I do seriously ask him to consider whether he believes that this procedure will influence anybody whom he would wish to see in the commercial life of this country into making a venture he would not otherwise make.

I will support this amendment. To a large extent, the original intention behind this concession was to encourage and to invite capital into this country. I presume that those who are in the position to make use of this concession or who would be influenced to bring money into the Free State by reason of this concession are, at this time, watching very carefully the industrial conditions in the countries in which they have their money invested, and when their investments to a very large extent have sunk so low, this concession in itself would be very little attraction indeed. What the majority of these investors are waiting for is a revival in the shares in which they have their money, a revival which they are hoping will come about sooner or later. Hence, if capital is not only to be retained but attracted here, it would seem to me that Deputy Blythe's amendment is one which should receive consideration, as obviously, if a revival does take place in shares or investments outside this country, people who have stood by and are willing to stand by the State will take advantage of that revival, if they have not got some good counter investment to interest them at home.

The acceptance of this amendment is impossible. It would cost us in its present form £500,000 per annum.

Not this year, surely?

The greater part of this year. It would cost a very large sum and, taking that in conjunction with the amendment which Deputy Mulcahy has down, it would cost us a very large sum and a sum much larger than we could contemplate. I am not going to say that the Government are forever ruling out the possibility of giving effect to the principle contained in Deputy Blythe's amendment, but we are making a start, because our purpose is, so far as we can, to make new Irish investments more attractive than they have hitherto been. Deputy Blythe is aware that, on former occasions, perfectly sound propositions were put before the Irish public and they could not attract the necessary capital. We are hoping that sound propositions will be put before them in the near future by men of business initiative, of capacity and enthusiasm. Because it happens to be the case in this country that the man without capital will have to raise capital from the public, we have introduced this amendment with the idea of making these new capital issues more attractive. It does not represent the ultimate aim of the Government in any way. The aim of this Government will be to make Irish investments henceforward, as soon as resources permit, definitely more attractive from the investor's point of view. We can only make a beginning and we are making it in this way, the most economical way possible and the way in which the cost to the Exchequer will be measured by the success of the inducements which are offered. If we were to try any other way, we would find it, at the present stage, much too expensive, and, as I have said, we feel in addition to the other inducements we are giving to Irish manufacturers now, we must also make it easier for them to secure the capital necessary to finance new undertakings. The history of the country has been hitherto that quite a number of what were sound undertakings were not financed by our own people, and the only reason is that they did not think the returns likely to be offered were sufficient. We are putting in this inducement—it may not be very much, but it is, at any rate, something and it is the best the Government in its present circumstances can do.

The Minister has just said that he is making a start. I would like to point out that what he is making a start at doing is to help one set of business men at the expense of another set of business men. There is a man in business for a number of years which could legitimately be described by the Minister as one of these sound propositions put before the public, for which money was not refused, but in which money was invested. That business has been in operation for a number of years, and now a rival business may be set up and the existing business in that way damaged. That is the encouragement that is given, or, at least, that is an example of governmental action, so far as business in this country is concerned. There has been in the course of these debates a great deal of talk about competition, and we have been told that the imposition of tariffs and the various measures taken by the Government will not diminish healthy competition within the country, but here we have the Government stepping in and deliberately loading the dice, so to speak, in favour of one set of competitors and against another set of competitors. That is really what the Government is making a beginning at doing—damaging firms already in existence, firms that were, as the Minister might describe them, sound propositions and into which Irish money has been put. These are to be put at a disadvantage so far as their Irish competitors are concerned. That may, with some other inducement— whether it will or not remains to be seen—induce people to invest capital, but there is involved in that a lightheartedness in dealing with investments and making discrimination between different people, even in the same industry, that will probably frighten more people off than the concession itself will induce to come in and put money into enterprise of this kind. For that reason, the Minister has it open to him either to drop the section or accept an amendment of this kind. I suggest it is not merely almost immoral, but it is certainly economically unsound in principle, to make discrimination of this kind between competitors in the same market, all of them Irish competitors.

There has been no reasoned answer given to this amendment. I want to get this thrown into a slightly different setting from that in which it has been presented up to date. The whole aim of Section 7 is to give relief to investors in Saorstát Eireann securities. In a sense this is a complement to the Control of Manufactures Bill. I suggest it should entirely take the place of that Bill. When we were discussing that piece of legislation I asked the Minister if he had any examples of legislation successfully operating in any country under which the discretion as to whether a business firm should be allowed to come into a country or not is left entirely with one Minister. I got no answer to that. I did get a reference in a rather offhand and diffident way to countries where certain other types of legislation prevail. I suggested that the Minister would find in other countries, particularly in Europe, that there was a certain discrimination made by way of taxes; that certain foreign companies had to buy their admission—that there was something in the way of an admission fee, so to speak—and quite a number of countries had adopted the scheme of a tax on sales or turnover.

Having heard the few vague examples the Minister was able to indicate to us as analogous to his proposals, I can say without hesitation that where there has been discrimination against any foreigners it was made by way of increased taxation on the dividends arising from foreign-owned businesses in any country. This is something of an equivalent. If you remit taxation on home-owned securities, clearly it is the same as if the other thing were done. The section introduces a very vicious principle of discrimination which does not pay attention to the conditions under which any man opened a business. The point that is emphasised is the time after the passing of this Act. What renders the investment of securities in this country more virtuous after the passing of the Act than before the passing of the Act? Does the Minister apprehend any great danger in the future that he seeks to counter by this proposal? Does he feel that the tariffs are not sufficient and that he has to hold out some assurance to investors after the passing of this Act?

Let us take the case Deputy Professor O'Sullivan hinted at. Let us say there are two people in the same line of business. One man has been running the business for many years. It was founded in the 'eighties, and it has been carried on, creating an industrial tradition at a time when it was very much harder to create that tradition than even at the moment. Let us assume that man gave employment right up to date and has complied with all the conditions laid down here. To my mind that man is a much more virtuous business man than the man who has waited to invest until he has got all this supposed security by way of tariffs and remissions. I feel that point of security can be overdone and that this may be regarded as a moral from another angle. It is seeking to draw into this country people whom one expects it would be impossible to draw into the country if they had a realisation of the true conditions or the conditions that are likely to operate here before the autumn is over.

What is the point of making this discrimination with regard to the matter of time? The assumption is that before the passing of the Act a business is to be regarded in one way and after the passing of the Act it will be regarded in quite another light. What happens during the period prior to and after the passing of the Act that makes the difference worth a remission of 20 per cent. in the dividends payable? I cannot see it and no point has been made of it. If there is to be any discrimination as between a foreigner and a national in this country the only proper way is by way of taxation. It is the only way in regard to which any number of examples will be found in the countries of the world. It is an easily worked type of discrimination. It is not subject to the whims or fancies of a particular Minister or Government. It is there and the remission is for all to see. They can avail of it if they please or stay away. It is not subject to conditions that the Minister may put in, such as in the matter of controlling manufacturers' licences. It is a thing that advertises itself and cannot be used in a partial way. People come in under it or they do not. Those conditions and terms are open to all comers. If there is to be any inducement to Irish people to invest in Irish businesses or companies it ought to be by way of remission, and it ought to apply to all Irish business no matter when founded.

There is one subsidiary point. The inducement for the future is going to be very strong upon existing companies to close down in order to reopen after a year or two. There is a clause which is supposed to prevent that and to prevent the ordinary buying over of an existing business. A business may go out of operation. It may be worth a big firm's while to close down for a year or two, to save wages and bank moneys in order to restart under new auspices. Quite a number of firms have come to the point where they must readjust their machinery and get in better plant; where they may have to get additions to their buildings. This offers a very definite inducement to them to close down, to come in again with additional plant and to claim the 20 per cent. remission. There is no reason why that dislocation of business should be caused.

This is the only amendment that operates equally as between national and national and as between national and non-citizen. We have had the usual argument that it cannot be afforded. I promised every time that argument was raised I would have to counter it in a particular way. The Minister sits where he is because he promised to reduce taxation here by two millions. That fact cannot be denied. The Minister was a party to the slogan upon which his Party's enthusiasm was raised: "Here is what a Fianna Fáil Government can and will do for you." Two million pounds were to be saved. I am glad that the Minister for Industry and Commerce is here because he was not content with the £2,000,000. He said that £3,000,000 could be saved. Give us the extra million that the Minister for Industry and Commerce is able to get over and beyond what the advertisement was able to do.

How does this arise?

It has been said that it cannot be afforded. It can surely be afforded out of the £3,000,000.

How does it arise?

It arises on the Minister's statement.

It was going to cost half a million, so there is only half a million asked from the people who told us they could save £3,000,000. The matter is relevant for Deputy Little, because he was one of the enthusiasts who believed that £2,000,000 could be saved. He was one of the people who were fooled. He sits there a fooled and deluded man, who backed the Front Bench because they were giving a £2,000,000 reduction in taxation for his people.

There is the point of time. The Government must be given time.

I am glad the point of time was raised by Deputy Little, because the point of time was not raised in the advertisement.

If they made that sort of promise in business they would be "doing time" now.

I was often wondering what was going to be the answer made on the point about this promised reduction. Was it to be a matter of time because the matter of time was ruled out altogether? "The Estimates for the current year have been examined." That is not referring to next year or the year after. "The Estimates for the current year have been examined and the Fianna Fáil Party was satisfied that economies were feasible to the extent of many hundreds of thousands of pounds," and then went up to £2,000,000. That £2,000,000 did not satisfy the Minister for Industry and Commerce. When he went to Baltinglass he added a million extra. That was promised on the Estimates for the current year and it was promised "without involving hardship upon certain people," and "without taking into account payments that were made and that should not be made under the Treaty." Let the Minister get one-quarter of those economies that were promised and we can get permissions for Irish industries, which are not of the type of discrimination which the Minister has been proposing for them.

I would like to describe, if I could, the pleasure which I feel in listening to Deputy McGilligan explaining why his Party lost the election. For ten years I had the obligation of explaining why the Party to which I belong lost the election and I know how the Deputy feels about it. I hope the Deputy feels——

I hope the Minister feels gracious about this concession. This concession will not cost the Government £500 this year and nobody knows that better than the Minister for Industry and Commerce.

Question:—"That the words proposed to be deleted stand part of the Bill"—put.
The Committee divided: Tá, 60; Níl, 44.

  • Aiken, Frank.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Blaney, Neal.
  • Boland, Gerald.
  • Boland, Patrick.
  • Bourke, Daniel.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Browne, William Frazer.
  • Carty, Frank.
  • Colbert, James.
  • Corish, Richard.
  • Corry, Martin John.
  • Crowley, Fred. Hugh.
  • Crowley, Tadhg.
  • Curran, Patrick Joseph.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Flynn, John.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Gibbons, Seán.
  • Gormley, Francis.
  • Gorry, Patrick Joseph.
  • Goulding, John.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Harris, Thomas.
  • Hogan, Patrick (Clare).
  • Humphreys, Francis.
  • Kelly, James Patrick.
  • Kennedy, Michael Joseph.
  • Keyes, Raphael Patrick.
  • Kilroy, Michael.
  • Lemass, Seán F.
  • Little, Patrick John.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Maguire, Conor Alexander.
  • Moore, Séamus.
  • Moylan, Seán.
  • Murphy, Patrick Stephen.
  • Norton, William.
  • O'Grady, Seán.
  • O'Kelly, Seán Thomas.
  • O'Reilly, Matthew.
  • O'Rourke, Daniel.
  • Powell, Thomas P.
  • Rice, Edward.
  • Ruttledge, Patrick J.
  • Ryan, James.
  • Ryan, Robert.
  • Sexton, Martin.
  • Sheehy, Timothy.
  • Walsh, Richard.
  • Ward, Francis C. (Dr.).

Níl

  • Anthony, Richard.
  • Blythe, Ernest.
  • Broderick, William Jos.
  • Brodrick, Seán.
  • Burke, Patrick.
  • Byrne, Alfred.
  • Byrne, John Joseph.
  • Coburn, James.
  • Collins-O'Driscoll, Mrs. Margaret.
  • Conlon, Martin.
  • Cosgrave, William T.
  • Craig, Sir James.
  • Davis, Michael.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar Seán.
  • Duggan, Edmund John.
  • Finlay, Thomas A.
  • Fitzgerald, Desmond.
  • Gorey, Denis John.
  • Hassett, John J.
  • Hennessey, Thomas.
  • Hennigan, John.
  • Hogan, Patrick (Galway)
  • Keating, John.
  • Keogh, Myles.
  • Kiersey, John.
  • Lynch, Finian.
  • McDonogh, Fred.
  • MacEoin, Seán.
  • McGilligan, Patrick.
  • Minch, Sydney B.
  • Murphy, James Edward.
  • Myles, James Sproule.
  • Nally, Martin.
  • O'Brien, Eugene P.
  • O'Donovan, Timothy Joseph.
  • O'Higgins, Thomas Francis.
  • O'Leary, Daniel.
  • O'Mahony, The.
  • O'Shaughnessy, John Joseph.
  • O'Sullivan, John Marcus.
  • Reidy, James.
  • Roddy, Martin.
  • Thrift, William Edward.
Tellers:—Tá: Deputies G. Boland and Briscoe; Níl: Deputies Duggan and Doyle.
Question declared carried.
The following amendments appeared on the Paper:
14. In sub-section (2) lines 26-28 to delete all words from the word "the" line 26, to the word "that" line 28 inclusive.—Risteárd Ua Maolchatha.
15. In sub-section (2) (a) (iv) lines 38-40 to delete all words from the word “or” line 38 to the word “on” line 40 inclusive.—Risteárd Ua Maolchatha.
16. In sub-section (2) (b) line 43, to delete the words “is intended to be or.”—Risteárd Ua Maolchatha.
17. In sub-section (2) (c), line 46, to delete the words “is intended to be or.”—Risteárd Ua Maolchatha.
18. In sub-section (4) to delete all words from the word "the" line 6, to the word "Commerce" line 9, and to delete the word "that" where it occurs at the beginning of paragraphs (a), (b), (c), (d) and (e). —Risteárd Ua Maolchatha.

On behalf of Deputy Mulcahy I move amendment 14. Amendments 14 to 18 are nearly all covering one point. The point that these amendments are directed to is found clearly set out in sub-section (2) where it says that the remission which is proposed by the section shall only apply to stocks and shares in respect of which the Minister for Finance certifies that he is satisfied, after consultation with the Minister for Industry and Commerce, that the conditions are complied with. There is really no reason why a Minister should be brought into this matter at all, except the reasons that are to be found in paragraphs (a), (b), (c) where it states that “the capital raised by the issue of such stock, share or security is or is intended to be.” Every other condition that is mentioned in the section can easily be decided by the Revenue Commissioners or by the Special Commissioners in the ordinary way by methods in which such matters have to be decided even already. For instance, there is no reason why the Minister should be required to certify that the company “is incorporated by or under the laws of Saorstát Eireann,” or “is a company limited by shares within the meaning of the Companies (Consolidation) Act, 1908,” or “is managed and controlled in Saorstát Eireann.” For other purposes in connection with income tax the Revenue authorities have to decide in many cases. For instance, for the purpose of determining the residence of a company they have to determine where it is managed and controlled. It seems to me that the Revenue authorities are the proper authorities to determine that. The Revenue authorities can determine it by the examination of books and the Minister should not be brought into the examination of these books. The Revenue authorities could determine whether a business is wholly or mainly carried on in Saorstát Eireann. The Revenue authorities could determine whether the capital raised by the issue of the stock “was devoted to the establishment or extension in Saorstát Eireann of one or more industries as defined by this section” and that it was not used for the purpose of an existing business.

First there is the question of political disagreement between the Ministers and the people who might be carrying on business. There is the fact that a Minister is not permanently in office and cannot be bound by any oath of secrecy, as the Revenue authorities are bound. For these reasons, it is undesirable, where it is avoidable, that any Minister should be brought into an examination of the books and the affairs of a particular firm. I admit it may be difficult for the Revenue authorities, and outside the ordinary scope of their work, to determine what is intended to be done with capital, but there seems to me to be no reason for giving a concession to a company that has not started business, that perhaps has raised capital and has capital invested in some way, or on deposit on some special terms in the bank, or something like that. There is no reason in that case why any concession should be given. There is no reason, therefore, why we should give a concession to any capital that is merely intended to be used in a particular sort of business. This series of amendments proposes to strike out any concession in respect of capital that is intended to be used in Irish industry, and that having been done, to strike out the Ministers in sub-section (2), and allow these allowances to be determined the same as any other allowances in the income tax code by the Revenue authorities in the ordinary way of administration.

The point raised in amendment 14 was discussed at considerable length on the Second Reading and it is not necessary to repeat the arguments which were then advanced. It is thought that there is good reason for the inclusion of the provision contained in the sub-section at present and the amendment could not be accepted on that account. On the other point made by the Deputy concerning the giving of a concession to a company which intends to start or carry on business in the Saorstát, the purpose behind that provision is to facilitate a company proposing to engage in business here in getting capital subscribed. I think the Minister should have power to give a certificate in such a case. If, in fact, the required conditions are not complied with, the certificate can be withdrawn again under sub-section (4) and that I think is adequate safeguard against any evasion.

The Minister has entirely declined to reply to the point raised. There is good reason for not enabling a politician to poke his nose into the affairs of any business carried on in this country. The giving of that power to a politician leaves the way open to corruption and political blackmail of various sorts. There may be cases in which the business that is required to be done cannot be done without the intervention of the Minister but there is this factor to be taken into account that if the work can well be done with the existing machinery, such as the Revenue machinery, which deals with that sort of thing there is every reason why the Minister should be excluded. If you once take the question of intention out of this section, there is nothing at all that will create any difficulty for the Revenue Commissioners in administering the whole scheme.

The whole excuse for bringing in the Minister is that it is proposed in this section to deal with intention. Surely in connection with the whole scheme of relief here the question of the capital intended to be used is a very small thing. I cannot imagine that a case would arise where there would be any greater ease in getting capital for the carrying on of some sort of business by reason merely of the fact that there was going to be any relief earned on that capital before the business was started. Surely everybody who subscribes capital will look to the business and the carrying on of the business. They will know that no income can be earned pending the start of the business. It is quite an uncommon thing for a company to make calls on its shares before it has any intention of placing its contract or doing whatever may be necessary for the start of the business. That particular provision will be practically of no use. It will have practically no effect. It is unnecessary because after all there is no need at all to deal with the small interval that sometimes may elapse between the raising of the capital and the starting of the business. You could put the argument that way. You could argue that nothing can be done until the business is actually started and that no relief should be given, or with something like equal force you could argue that it is reasonable that if capital is raised for this specific purpose it should be used for this purpose. It is certainly a line ball case. That being so it seems to me absolutely clear that we should take intention out of the section and having done that and having removed the only reason for bringing in Ministerial intervention in a business concern, in a matter of income tax administration, I think interference by the Minister should be removed.

I shall put the amendment.

I do not want to delay the House but I think that this is a matter of some importance. I think it is a matter in which some reason should be given by the Minister for Ministerial intervention.

The Deputy knows quite well that in practice neither Minister will positively interfere at all, that the matters will be brought to the final stage by the officers of the Department. The Deputy knows that after his ten years' experience.

That is in the normal course.

If there is abuse there is always an opportunity for any member of the Dáil to have the matter ventilated by Parliamentary question, by a question on the adjournment, or by motion in Private Members' time. It is desirable that the powers to certify in respect of a company formed with the intention of carrying on business should be preserved in order to facilitate the company in raising capital for that particular concern.

It is obvious, whether the Minister understands it or does not understand it, that there is no force in his argument. It is perfectly clear that that sort of certificate would be of no value whatever in raising capital. It will all depend on the permanent certificate, the permanent relief that is going to be obtained in using capital in this way for the carrying on of the business. It is true that a thing like this would have to be investigated by officials of the Department of Finance and the Department of Industry and Commerce. The Minister concerned could not afford the time, if nothing else was involved, to investigate each case. There is a great difference, however, in having a matter investigated by the Revenue officers and having the matter investigated by officials of the Department of Finance or of the Department of Industry and Commerce. If it is investigated by the Revenue authorities it is investigated by a body which has semi-judicial functions, which operates under the law and which does not report to the Minister. From their decision an appeal can be taken to the Special Commissioners and from the Special Commissioners to the Circuit Judge, and if there is a question of law involved, to the High Court and Supreme Court.

Where, however, it is investigated by an official of the Department of Finance it comes up before the Minister. He may look at the file or he may put his initials to the certificate without looking at the file at all.

It is open to him to examine the file and it is open to him to disregard the advice on the file. As a matter of fact every Minister from time to time does for reasons of his own take a line that is counter to the advice given to him. In many cases the Minister may not decide but there will be some cases in which the Minister will decide. There is no reason why this matter like all questions of relief in income tax, should not be decided by the Inspector of Taxes with appeal to the Special Commissioners and so on. It is a question of law. There are certain conditions which are set down for relief, apart from the question of intention, and there should be no difficulty in coming to a decision. There is no reason why the inspectors of taxes or the Special Commissioners should not decide and why the privacy that prevails in regard to income tax matters should not exist. The Revenue official is bound not to make any disclosure to the Minister and there is privacy in regard to the business of any firm whose affairs he investigates. An official of the Department of Finance on the other hand is not bound to privacy. In fact he is bound to make a report to the Minister. The Revenue practice of privacy in dealing with the ordinary business of firms should not be departed from without some reasons being adduced. The Minister has failed to adduce any reason because it must be obvious to him that the question of a certificate dealing with money before it is applied to a business would have no effect on the raising of capital.

Question: "That the words proposed to be deleted stand."
The Committee divided: Tá, 58; Níl, 43.

  • Aiken, Frank.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Blaney, Neal.
  • Boland, Gerald.
  • Boland, Patrick.
  • Bourke, Daniel.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Browne, William Frazer.
  • Colbert, James.
  • Corish, Richard.
  • Corry, Martin John.
  • Crowley, Fred Hugh.
  • Crowley, Tadhg.
  • Curran, Patrick Joseph.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Flynn, John.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Gibbons, Seán.
  • Gormley, Francis.
  • Gorry, Patrick Joseph.
  • Goulding, John.
  • Harris, Thomas.
  • Hogan, Patrick (Clare)
  • Humphreys, Francis.
  • Kelly, James Patrick.
  • Kennedy, Michael Joseph.
  • Keyes, Raphael Patrick.
  • Kilroy, Michael.
  • Lemass, Seán F.
  • Little, Patrick John.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Maguire, Conor Alexander.
  • Moore Séamus.
  • Moylan, Seán.
  • Murphy, Patrick Stephen.
  • Norton, William.
  • O'Grady, Seán.
  • O'Kelly, Seán Thomas.
  • O'Reilly Matthew.
  • O'Rourke, Daniel.
  • Powell, Thomas P.
  • Rice, Edward.
  • Ruttledge, Patrick J.
  • Ryan, James.
  • Ryan, Robert.
  • Sexton, Martin.
  • Sheehy, Timothy.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Ward, Francis C. (Dr.).

Níl

  • Bennett, George Cecil.
  • Blythe, Ernest.
  • Broderick, William Jos.
  • Brodrick, Seán.
  • Burke, Patrick.
  • Byrne, John Joseph.
  • Coburn, James.
  • Collins-O'Driscoll, Mrs. Margaret.
  • Cosgrave, William T.
  • Craig, Sir James.
  • Davis, Michael.
  • Keogh, Myles.
  • Kiersey, John.
  • Lynch, Finian.
  • McDonogh, Fred.
  • MacEoin, Seán.
  • McGilligan, Patrick.
  • Minch, Sydney B.
  • Murphy, James Edward.
  • Myles, James Sproule.
  • Nally, Martin.
  • O'Brien, Eugene P.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar Seán.
  • Duggan, Edmund John.
  • Finlay, Thomas A.
  • Fitzgerald, Desmond.
  • Gorey, Denis John.
  • Hassett, John J.
  • Hennessy, Thomas.
  • Hennigan, John.
  • Hogan, Patrick (Galway).
  • Keating, John.
  • O'Donovan, Timothy Joseph.
  • O'Hanlon, John F.
  • O'Higgins, Thomas Francis.
  • O'Leary, Daniel.
  • O'Mahony, The.
  • O'Shaughnessy, John Joseph.
  • O'Sullivan, John Marcus.
  • Reidy, James.
  • Roddy, Martin.
  • Thrift, William Edward.
Tellers:—Tá: Deputies G. Boland and Briscoe; Níl: Deputies Duggan and P. S. Doyle.
Question declared carried.
Amendments 15, 16, 17 and 18 negatived.

I move amendment 19: Before sub-section (5) to insert a new sub-section, as follows:

"(5) Where an individual who is resident in Saorstát Eireann and is not resident elsewhere claims and proves to the satisfaction of the Special Commissioners that—

(a) he is carrying on either alone or in partnership with any other person or persons a trade or business wholly or mainly in Saorstát Eireann, and

(b) he is beneficially entitled to or to a share in the profits of such trade or business, and

(c) such trade or business is managed and controlled in Saorstát Eireann, and

(d) the capital of such trade or business is or has been devoted to the establishment or extension in Saorstát Eireann of one or more industries as defined by this section, and

(e) no part of the capital of such trade or business has subsequent to the passing of this Act been used for the purpose of acquiring (directly or indirectly) an existing business or any share or interest in an existing business or of purchasing investments, or of paying off existing loans or debentures,

the following provisions shall have effect, that is to say:—

(i) such individual shall be entitled to repayment of twenty per cent. of the income tax applicable to any profits received by him in respect of such trade or business save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of the Income Tax Acts;

(ii) in estimating the total income from all sources of such individual for the purposes of income tax and sur-tax the amount of any profits in respect of such trade or business shall be deemed to be diminished by twenty per cent."

This amendment if adopted might be found reasonably to require some drafting in view of the fate of amendment No. 13. The purpose of the amendment is to give the same advantage to private persons carrying on their extended business as to a firm. It is difficult to see on what principle the Government resolved to give a concession in respect to business carried on by a limited liability company and refuse to give any concession in respect to business carried on by a family or a partnership of individual industrialists.

A good case might be made for the amendment, and in other circumstances it might be quite possible to consider it, but it is quite obvious that the cost would be very considerable and that must be taken into account. Deputy O'Sullivan can now, if he likes, make Deputy McGilligan's speech as the subject of cost is mentioned. It is obvious if this concession were given it could not be confined to a business income alone. It would have to be extended to professional incomes and to incomes from other employment. The Deputy is aware that a business man trading upon his own account, or as one of a partnership, gets earned income relief upon his business income. I do not want to convey the impression that the Government would not be glad to try and do something on the lines suggested by this amendment, but it is not possible.

Amendment, by leave, withdrawn.
Amendment 20. In sub-section (5) to delete all from and including the word "save," line 28, to the end of the sub-section.
Amendment 21. In sub-section (5) to delete all from and including the word "trade," line 27, to the end of the sub-section, and substitute therefor the following: "business in which a person by way of trade or for the purposes of gain does or causes to be done any of the following things in the course or as part of such business, that is to say, so to make, alter, repair, ornament, finish or to adapt for sale any article, material or substance or any part of any article, material, or substance as materially to alter the nature or character thereof and substantially to add to the value thereof."

Amendment 21 refers to line 27; amendment 20 refers to line 28. Perhaps the Deputy would move both together?

There are contrary principles in the amendment.

Amendment 21 should really be taken first, as it refers to line 27.

I move amendment 21. The object is to confine the concession to manufacturers. I think that that is possibly what the Government most desires by this—the encouragement of manufacture— and there is certainly, in view of the undeveloped state of manufacture, less force, for instance, if this amendment 21 is adopted, in the argument used earlier by Deputy Dillon. We have plenty of distributors in the country, and it seems to me to be unfair to give a concession to somebody who starts a new distributing business, whereas, as there is not a sufficiency of manufacturing businesses, there is not that argument at all against them. There would not be the same argument against the scheme of the section if this amendment were adopted. I do not know whether the Government in proposing this scheme is anxious that new money should be put into distribution, and that we should try to encourage a host of new distributive enterprises to start. I would have thought that the object of the section was to encourage investment in manufacturing industry, and the amendment in the name of Deputy Mulcahy is to put that in the section.

There is a strong case for confining the section to firms engaged in manufacturing enterprises, but it is practically impossible to do so. To limit it to manufacturing enterprises only would involve very elaborate administrative procedure which would be very difficult of administration. If these amendments were carried, a firm employing one hundred hands in, say, a drapery store engaged purely in the retail trade need only employ one girl sewing on buttons or, say, darning stockings, in order to comply with the conditions required for the concession. To be logical we would have to differentiate, in the case of a firm engaged partly in manufacturing enterprise and partly in retailing, between that portion of its income which came from the manufacturing end and that which came from the retailing enterprise. Taking all things into account it is well that the concession should be given in the form here proposed.

That there would be, if the amendment were accepted and incorporated in the Bill necessarily as set down here, difficulties arising, I can quite see. But if the Minister feels any sympathy with the principle, would he not consider introducing in the next stage an amendment himself along somewhat different lines confining the concession to firms whose main business was, shall we say, manufacturing and the alteration of an article in such a way—that is, to confine it to firms whose business was mainly manufacture rather than distribution?

The Deputy may take it that that was considered, but very elaborate provisions would have to be made to carry out the intention and avoid evasion. If on reconsideration a simpler method could have been devised, it would have been employed, but it did not seem possible when exemption was being given in the first instance.

Amendment 21, by leave, withdrawn.
Amendment 20 not moved.

I move amendment 22:

In sub-section (5), lines 28 and 29, to delete the words "the purchase and sale of imported coal."

I would ask the Minister if he would give us some explanation of the reasons for excepting certain of these businesses set out here. For instance, as the section is very wide already, as the term "industry" in the section includes nearly every sort of business— as the Minister has admitted—why is, say, the business of the purchase and sale of coal excepted and the business of the purchase and sale of imported drapery, for instance, not excepted?

I do not think there are any companies formed for the purchase and sale of imported drapery, only, but on the other hand, companies are formed in this country particularly for the purpose of importing and selling coal, and in view of the special circumstances existing now in the coal business here, we thought that this concession should not be extended to firms engaged in it. These exceptions were considered in detail and in each case some justification arose to justify the extension of the concession to certain types of firm. It may be argued that certain other firms should be included but we tried to keep the limit as narrow as possible, and not give a concession where there was not some clearly defined reason for giving it.

I do not want to press the coal matter particularly, which I think is the weakest place, but there is a logical line which could be drawn demonstratively between the distributing and the manufacturing business. It is difficult to see why one particular distributing business—because that is what it amounts to— a particular business which happens to deal mainly in imported goods—should be shut out, and all other businesses—and there are many other businesses that deal entirely with imported goods, such as tea (that is an imported commodity just as much as coal is)—included in the relief. And while, as I say, I do not think that the coal item is the strongest of these series of amendments and I do not want to take too much time on it, I suggest that it is not a desirable thing more or less arbitrarily to exclude one particular sort of business from the relief that is being given generally and to refuse to include it.

The Deputy said that firms engaged in the importation of coal were being treated exceptionally. Those are there in pursuance of a sort of general principle. The other exclusions are public utility companies, such as companies engaged in the sale of gas for lighting, heating, or power, transport organisations of various kinds and companies engaged in dealing with stocks and shares. These classes are excluded. In addition, those engaged in the business of selling imported coal are also excluded because of the special conditions that exist in the coal trade, of which the Deputy is aware, as they were discussed in the Dáil from time to time during the last three years.

Amendment, by leave, withdrawn.
Amendments 23 and 24 not moved.

I move amendment 25: In sub-section (5), line 31, to delete the word "inland" and substitute the word "road."

If this amendment were accepted, I do not know to what extent it would operate in practice. Since amendment 13 was rejected and since we are confined to capital raised subsequent to the passing of this Act, I do not think that the practical effect of this amendment will be very great. If it be effective at all, I think it is completely defensible. We know that the railways are experiencing great difficulties. Their very continuance is, perhaps, imperilled. I do not know that they are likely to close down, because the economic circumstances of the country require their continuance. I suppose some means will have to be found to enable the railways to continue. If special steps are not taken, the difficulties of the railways seem to be destined to increase. In these circumstances, if a concession is given to any sort of enterprise, it should, above all, be given to the railways. It is possible to argue that the road policy which has been pursued and the new road policy which is going to be pursued by the Government have tended and will tend to increase the difficulties of the railways, to draw traffic away from them, to make it difficult for them to meet their overheads and keep going, not to speak of providing the modest dividend which, if the service is to continue to be made use of by the public, ought to be paid to those whose enterprise initiated the undertaking and carried it on so far. I think there is a case for giving this concession to a railway company if it is possible to give it to any company. It is possible that the development of the Drumm battery may make it necessary and possible for the railway companies to raise new capital. They might, if permitted, qualify for the advantage proposed by this section. If that should happen, the railway companies' enterprise ought to get the benefit of this section. If it is not going to be necessary for the railways to raise new capital for any purpose, then there will be no harm done. The Exchequer will lose nothing. I would urge the Minister strongly, at least to indicate his willingness to allow the railway companies to benefit under this section if circumstances should arise which would enable them to fulfil the conditions set out.

I gathered from the Deputy's remarks that this amendment is another solution of the railway problem.

Not quite.

If it is put forward in that spirit, I am afraid it is not acceptable as such. The question of transport services generally is under consideration and definite proposals will have to be submitted to the Dáil at some date in the near future. I think we can leave the question of what action is to be taken in relation to the railways over until then and the putting in of an amendment of this kind at this stage is of no value whatsoever. It is unlikely that there will be any new issue of stock or shares by the railway companies between now and the date on which some positive decision as to railway policy will be made by this House. The amendment should not be pressed at this stage as a solution of that problem.

It is obvious that nobody suggested this as a solution of the problem. We do not know what steps are going to be taken and we do not know how adequate any steps it is possible to take will be. Everybody recognises that the problem is one of very great difficulty and that even, with the greatest enthusiasm in the world, the Government might have quite enough trouble in devising measures that would be adequate and that would make the situation of the railways at all easy. I do not profess to be able to foresee circumstances in which the railway companies would issue new capital but, if anything makes capital expenditure necessary, the funds will surely have to be got by new issues. They are not going to be got out of earnings, in the present circumstances, or in any circumstances likely to arise. The Minister mentioned that certain things were excluded because they were public utility companies. There is nothing particularly evil in an enterprise being a public utility. The Minister simply said that they were not including public utility societies in the section. He did not elaborate that or state any grounds for so doing. I do not see what grounds he could have other than wanting to narrow the section somewhat or being unwilling to give a concession to a gas company which might be held to be competing with the Shannon Scheme or something of that kind. This is a permanent provision and circumstances may arise—though I do not profess to foresee them—in which railway companies will have to raise new capital. We do not know to what extent the Drumm battery will be used. If it were widely used by the railway companies, it would involve a considerable amount of capital expenditure. That capital would have to be raised by a public issue. I think the amendment ought to be accepted. The Minister did not put forward any arguments which were very convincing against it. He talked about a solution of the railway problem. That is quite another matter. Is the Minister sure that the railway companies will be placed in a position of affluence by the new measure? I do not think he can be. If he is not, why should he decline to encourage investment in railway companies in any new circumstances which may arise and thus ease their position under this section whatever may happen otherwise?

I have discussed the matter with the Minister for Finance. We are impressed by the Deputy's arguments and we agree to accept the amendment.

The Bill is immensely improved.

Amendment put and agreed to.
Question proposed: "That Section 7, as amended, stand part of the Bill."

Whatever may be the purposes of the section, and however much it is likely to achieve its purpose as it stands, I think those who have listened to the debate, and in view of the refusal of the Government to put up any arguments against some rather important amendments that were suggested from this side of the House, will agree that the section enshrines some very vicious principles. In the course of the debates efforts were made to get rid of these principles and in answer to arguments put forward from this side, and from other quarters in the House, we were met with silence, practically, from the Government Benches, and on other occasions with the non possumus attitude that they could not afford it. Leaving out of account the statement that they could not afford it, with the immense taxation it will put on, and which, to a large extent is due to the extravagant policy the Government is adopting, what they do not seem to realise is that they aimed at one particular thing in the section apparently, namely, the setting up of new businesses and new industries, but at the same time as the section now stands, there are in it certain principles which must have the opposite effect. We had an example in connection with the Control of Manufactures Bill which shows an extraordinarynaive view of what can be done with business; that it can be juggled with, and that there is no delicacy about business organisation because you are laying down certain principles and violating other long-established principles. A Government prepared to violate them unnecessarily I suggest is damaging the sense of security that any investor must feel.

No real argument was put up, and no attempt was made to answer Deputy Blythe when he was arguing against the substitution of the Revenue Commissioners for the Minister in connection with one particular section. He pointed out the danger involved in bringing in the political head to make a decision. He is there not merely as a matter of principle, and sometimes undoubtedly will be there as a matter of practice. That which many people regard as one of the few attractions in connection with the income tax raising is its secrecy, and that is now to go unnecessarily. No argument was put forward to show why that work could not be carried out by those accustomed to look after the ordinary income tax affairs of the people. What is disturbing is that here is the beginning of a tendency to throw aside long-established principles; principles in which confidence is based. No arguments were put forward and no reasons adduced for that. That is one reason why we must object to this section. With the intention, if I may say so, on the part of the Government to pry into the private affairs of individuals, which could be done as Deputy Blythe pointed out probably better by the Revenue Commissioners, to set aside the veil of secrecy, to violate a principle long established, that will probably do a great deal more to make people uneasy about investments than the section itself will do to induce people to invest in this country. In the same way with the discrimination to which I have referred owing to the failure to accept amendment 19 in the name of Deputy Mulcahy, there is further discrimination between a private company and a private individual, between a family and a company which issues shares. There is discrimination between men long established in business, men who had to struggle to keep the business in existence. They see business established in competition getting favours from the Government and having more money to put into business owing to the fact that they are charged less income tax. A business man sees himself discriminated against in that way. If all these principles are taken into account I think they violate the ordinary canons for the carrying on of business. There is Government interference with business to such an extent that the section will do a great deal more damage than any real positive good in the way of inducing people to put their money into investments in this country. Not merely for what the section indicates, but for the evidence of light-heartedness that it displays because the Government without any sufficient reason will violate longstanding fundamental principles, and because it is vicious and contains principles distinctly bad, principles which the House ought to consider carefully, I hope the House will object to this section as it stands.

The Minister was not present when I was arguing that this section ought to be amended by removing the Minister for Finance and the Minister for Industry and Commerce out of the scope of the section dealing with investments which had not yet been applied to the carrying on of business in the Saorstát. I do not know whether or not the Minister for Industry and Commerce had given any consideration to the section before he came into the House to take the place of the Minister for Finance during his temporary absence this evening. Certainly he adduced no argument that could have any force for maintaining the section as it stands. Every regulation to determine whether or not a company should be eligible for the relief given in the section could be made by the Revenue officials if we are to confine it to the relief of companies and businesses actually in operation. I think the Minister for Finance should further consider the matter, that income tax relief should be administered as every other income tax is administered by the Revenue staffs and that the Minister for Finance should not be required to go into details of particular businesses in connection with income tax, and that the officials of the Department of Finance who are under no seal of secrecy, but on the contrary are pledged to disclose the results of inquiries to the political head, should not deal with this matter.

The objects can be achieved quite well if the section is altered as I suggest it should be altered, and there certainly would be no good done, in the way of raising capital, by making provision to relieve any earnings that may be made by that capital before it is applied to the business for which it has been raised. The cases in which that particular provision in the section could apply will be very few, and, even if they were numerous, they will not influence the subscriptions to the stock being issued. What will influence them is the prospects of the business and the possible prospect of tax relief when the business is in operation and dividends are being paid.

While this section is vicious in the way described by Deputy O'Sullivan, I would like to deal also, and, perhaps, at a little more length, with the point raised by Deputy Blythe.

I think that the taking of power by the Minister to impose liability on particular citizens in the State is a power which should be very slowly given. I know under existing legislation very few examples of the head of a Government Department determining the actual liability on particular individuals. The only one which comes to my mind at the moment is the power given to the Minister for Local Government with regard to surcharges on members of local authorities, but I do not think that any analogy whatever can be drawn between that power and the power which this section purports to give the Minister for Finance and the Minister for Industry and Commerce. This section as it stands undoubtedly gives them power to impose liability for income tax on particular people. A power with regard to income tax generally under the income tax code is given to the Revenue Commissioners, and, as has been pointed out here, there is nothing whatever in the section, save the particular question of the intention to expend moneys on industries in this country, which could not very well be determined by the Revenue Commissioners, and, in fact, I think that even the question of intention could be quite as well determined by the Revenue Commissioners as by the Minister for Finance or the Minister for Industry and Commerce. Presumably, if the Minister for Industry and Commerce is to give any certificate as to intention, some form of evidence or declaration by the persons interested must be placed before them of intention to expend the capital of the company in this particular way, and, if it is thought necessary to retain this exemption in this section where any intention exists to expend money, the same evidence could be placed before the Revenue Commissioners and would satisfy them just in the same way as it might satisfy the Minister for Finance or the Minister for Industry and Commerce, but, in any event, the question of intention can be a mere temporary matter.

No certificate given in respect of intention can be any way permanent and the Minister for Industry and Commerce, in the few remarks he did make on the section, pointed out that it would be a mere temporary measure, and that if a person who displayed at one moment an intention to expend moneys in this particular way did not carry out his intention, under sub-section (4) of the section power was given to remove the certificate that had already been given. I have not heard in this House yet any case made for an inroad on the general finance code in respect of this matter, but the Revenue Commissioners are quite competent to determine any question that arises under the section. What case can be made, or has been made, to the House for depriving the ordinary taxpayer in this particular matter of the ordinary remedy, the ordinary relief he has against any particular decision which is adverse to him? If this matter were determined by the Revenue Commissioners, the taxpayer has his appeal to the Circuit Judge, and if a question of law is involved, he can go either to the High Court or the Supreme Court, but he has no remedy whatever, and no right of appeal when this matter is to be determined by the Minister for Finance and the Minister for Industry and Commerce. The Minister for Industry and Commerce says that grievances, if any, can be ventilated in this House, but that is very little good to the taxpayer, if there is a cut and dried machine to vote him out of any grievance he may want ventilated. Furthermore, I do certainly think that if the only remedy open to the taxpayer is to have his grievances ventilated in the House, it is not in the interest of industry or of people engaged in industry in this country, if, in any particular respects, they have to come and bring before the whole country, through this House, particular matters dealing with their business before they can get relief from any grievance, and I would press on the Minister that no justification exists, and no justification can be made for taking this matter outside the scope of the general income tax code, and for making the Minister for Finance and the Minister for Industry and Commerce the final arbiters in the matter, rather than letting it go through the ordinary channel of the Revenue Commissioners and to the courts, if necessary.

This section has been described as an example of the vicious principle which permeates the whole of this Bill. What is the vicious principle? Deputy J.M. O'Sullivan knows what words mean and can use them more precisely than I can, but what is the vicious principle? I will assume that he had carefully considered the matter and that before he used such language, he had weighed up what it meant and what the section proposed to do. What does it propose to do? It proposes, in this period, when every effort must be made to establish new industries in order to absorb our unemployed, to provide livelihood and bread——

I made it quite clear that whatever might be said about the general aim of the section, namely, to promote industries, it contained vicious principles, and these I mentioned—discrimination and violation of secrecy. That is all.

It aims, he said, at setting up new business in this country. That is the aim of the general section.

And I said the aim might be good.

The Deputy admits the aim is good?

And the way, then, is good also.

Not necessarily.

For this reason, that it is going to make that aim easier of accomplishment. It is going to make new ventures more attractive.

And going to give a better prospect of success.

On the contrary.

And yet, because we are trying to do that, Deputy O'Sullivan says that we are giving effect to vicious principles. I am glad that he is ashamed of the words he has used. And it is just what I would expect from Deputy O'Sullivan in his better moments, that he should be ashamed of his words. We are told that we are violating long-established principles. Quite obviously, there is confusion of thought in this matter. That is quite clear. What the Minister for Finance, in consultation with the Minister for Industry and Commerce, has to determine is something that the Revenue Commissioners have never had to determine before. There can be no long-established principle in this matter, because the case never arose before, but it arises now on the simple determination of certain facts, first of all, as to whether a company is or is not a public company. Whether it is or is not a public company is a fact which can be quite easily ascertained by any member of the public if he goes to the trouble of doing it—

Why bring the Minister into it?

And with regard to that, there can be no violation of any secrecy. The whole of Deputy Blythe's speech was based on this fact, that it would be necessary for the Minister to probe into the intimate affairs of any particular undertaking which came before him. It is not necessary for the Minister to do more than look at the style and title of a company and look at the company's register in order to assure himself that it is a public company, incorporated under the laws of Saorstát Eireann.

The next provision in the section is that it is a company limited by shares within the meaning of the Companies (Consolidation) Act, 1908, and that it is managed and controlled in Saorstát Eireann. It is not necessary for the Revenue Commissioners to be brought in to determine any one of these facts. Any one of these facts can be ascertained by any member of the general public. The section further provides that the company carries on its business wholly or mainly in Saorstát Eireann. Who is more competent to determine that fact than the Minister for Industry and Commerce, whose business it is, within certain limits, to keep all industries under survey, to be aware of what they are doing? I submit the Minister for Industry and Commerce is more competent to do that, and will do it in the ordinary everyday discharge of his functions, than the Revenue Commissioners could do it, because he has the machinery and the information at his hands.

Again, the section sets out: "The capital raised by the issue of such stock, share or security is or is intended to be or has been devoted to the establishment or extension in Saorstát Eireann of one or more industries as defined by this section." The person most appropriate to do that is the Minister for Industry and Commerce. Paragraph (c) of sub-section (2) states: "No part of the said capital so raised is intended or is being or has been used for the purpose of acquiring... an existing business or any share or interest in an existing business or of purchasing investments or of paying off existing loans or debentures." If any man goes for a loan under the Trade Loans (Guarantee) Act, before that loan will be granted has he not, in certain circumstances, to furnish to the Minister exactly the same information as is asked for here?

We are told we are violating long-established principles. Paragraph (d) says: "Such issue of stock, shares or security is so described and designated that it is readily distinguishable from all other (if any) issues of such company." What harm could there possibly be in the Minister for Industry and Commerce ascertaining that fact for himself? The manner in which the capital of any company is obtained is perfectly well known to the Minister and all he has to satisfy himself upon is that the new issue will be readily distinguishable from existing issues. I put it to Deputy Blythe, where is there any probing into the intimate affairs of any concern which seeks to benefit under this section? I think that what I have said applies equally to what Deputy Finlay said. There is no possibility of the confidence of any firm being violated, no possibility of any information of their affairs being conveyed to any competitor. I repudiate the suggestion made here in relation to the Civil Service. I am ashamed that the Deputy who was the former Minister for Finance, who was responsible for the Civil Service and who defended the honour and probity of the Civil Service in this House, just as I am doing now, would listen to any suggestion that one branch of the Civil Service any more than another would be guilty of any violation of secrecy in a matter of this sort.

The Minister is deliberately misrepresenting me. What I pointed out was that it was the civil servant's duty to report to his Minister, who was not a civil servant but a political head. The Minister is deliberately misrepresenting me.

The statement was made that the Revenue Commissioners and their staff are used to keeping confidences.

Even from the Minister.

Yes; but there is no reason why anything should be withheld from the Minister in this particular matter, nor is there any reason for it to be withheld in most other matters unless, as I said on the Second Reading debate, the Minister is unfit to sit on the Government Benches and unless he and his Party—the whole Government—are corrupt and that he could possibly, for some political reasons or under political pressure, divulge any information or do anything that would prejudice the interests of any commercial concern in this country. The Deputy cannot get away from that. He has either got to accept it that those charged with the Government of the country are honest men or else he has to say in certain circumstances that the people of the Free State are so demoralised that they would elect to be governed by dishonest persons.

The Minister obviously has nothing to say in defence of the section. He delivered to us a farrago of nonsense.

He was wasting time.

Let us take one of the earlier paragraphs. Is it not utterly ridiculous to require a Minister to certify a company is incorporated by or under the laws of Saorstát Eireann? Is it not utterly ridiculous to certify that a company is limited by shares within the meaning of the Companies (Consolidation) Act? Should not the section be so drawn that companies complying with those regulations will get the benefits of the section? Why should a company go to the Minister to get a certificate that these things are so? So far as other matters are concerned, there must be probing into a company's affairs. In many cases there would have to be quite an amount of probing in order to determine whether a company was managed and controlled in accordance with the law here, and the Minister should know that quite well. There are cases in which there would be no difficulty, but there are other cases in which there would be considerable difficulty in determining where a company was managed or controlled from. It would be necessary to know a good deal about a company in order to determine that with certainty.

It would be necessary to know a lot about a company and to have the figures which would indicate the extent of its business in order to determine whether it is wholly or mainly in Saorstát Eireann. It would be necessary, for instance, to determine whether capital was being used for the establishment of a business in Saorstát Eireann and to make sure it was not being used to purchase existing businesses. The Minister would have to probe deeply into the affairs of the company. There has not been the slightest argument advanced to show why the Minister should make these inquiries and come to conclusions in regard to them. There has been no such relief as this in the income tax code heretofore, but there have been other reliefs and charges. The matters to be determined here are precisely the kind of matters the Revenue Commissioners are continually determining. There is no reason why, in relation to this particular relief, the Minister should be brought in when he is not brought into other reliefs.

It is most undesireable that a Minister should be allowed unnecessarily to probe into the private affairs of a business firm. It is quite conceivable that a Minister who is in business might have the affairs of a trade rival coming before him; he might have their books and accounts exposed to him—they might have to be exposed to him—and I think that is a most undesirable course. The Minister will himself realise that the ordinary law in regard to income tax and the secrecy in regard to income tax is thoroughly sound and thoroughly desirable, and that it would be a most disagreeable thing both to the Minister and to those in business if the matters that come before the Revenue Commissioners were such as would have to be reported to the Minister. The same thing applies with regard to the particulars mentioned in the Schedule. There is no reason why the Minister should come into them or that one set of civil servants should come into them when another set of civil servants should have to come into them. I am not going to suggest that there are frequently going to be Ministers who would abuse their knowledge or disclose in any way the information that would come to their disposal. It is quite possible that the firm concerned may be political enemies of the Minister and there would be in the minds of such a firm if the matter were done by the Minister a suspicion much more so than if the thing were done by officials who have been trained in the Revenue Service. That is a factor that possibly would not be absent from the mind of the citizen if the citizen is a political opponent of the Minister. It is unfair that such man should be asked to give private details of his business to any Department if that is at all avoidable. There may be cases where it is unavoidable that this information should be given and we have to bear with such cases. But when there is another, a better and more efficient way, a way that will prevent duplication of work, then we should not force a business man or firm to show his books to a politician who for the time being occupies a ministerial position.

It is a most extraordinary thing that the Deputy should in any way desire not to make obligatory the authority of this House. What is proposed is the only way in which this House maintains its authority. The Deputy would by his suggestion make it impossible for the Minister to answer to this House in any matter.

So that the full secrecy of the citizen's business can be fully discussed in this House?

Only if the citizen himself should choose.

I am with Deputy Blythe in this amendment. I think the principle enunciated by the Deputy is entirely a sound one. I do not think that the Minister can in justice take the other way. All sides in this House have the gratification of being proud of our civil servants and I do not think that there is any section in this House who would suggest that we should wish anything off them that they do not already give. As Deputy Blythe has said, it is entirely unfair that a person who is possibly violently politically opposed to the Minister in charge should be obliged to lay open his private confidential affairs before that Minister. Consequently it is the least desirable thing that could possibly be allowed. Deputy Little has suggested that the matter should be raised in this House. The most vital element in this House is publicity. That would be a most unsatisfactory proposition to formulate—that the confidential affairs of a firm could be discussed here by a Minister with cross-examination into certain matters connected with the firm.

I would remind the Minister for Finance that his colleague the Minister for Industry and Commerce employed the same language a few nights ago on another subject when that Minister struck the desk, as he often does, and told us that the very best check we could have was reference to Dáil Eireann and the accounting of the Minister to Dáil Eireann. But to-day the Minister told us that he had to refuse certain licences and when we asked him to render this account to Dáil Eireann he said certainly not, that it was not in the public interest to do it and that he was not prepared to do it. Then it occurs to me that this very important check on his operations about which we heard so much previously was not functioning. I hold it would be very unfortunate if the check did function in this connection because it would be an intolerable imposition on business firms. On this question as to whether this check by Dáil Eireann calling on the Minister to account for what he does is a desirable or effective check, I venture to suggest that it is open to the Minister always to say that it is contrary to public policy and injurious to the persons whose affairs are concerned to have such matters raised in the House. But leaving that out of the question it is obviously clear (1) that a matter of this kind should not come up before Dáil Eireann except of course in case of grave national emergency as Dáil Eireann is not the public forum in which to discuss such questions; (2) as Deputy Blythe has said where you have trustworthy civil servants habitually handling matters of this kind, having the requisite information, ready to undertake the work, and the individual citizen has a well-established right of appeal from their decision to the courts, you have obviously there a more desirable machine available. Why the Minister should try to burden himself and his Department with this work is more than I can understand. They have already quite enough to do without adding on functions of this kind. I cannot imagine why the Minister should want to add these functions to his Department or that it should be necessary to add them instead of allowing these matters to fall on the longsuffering shoulders of the Revenue officials.

There was one argument which the Minister adduced in favour of this section. He apparently admitted, not expressly, that there was something in the nature of recognition of the principle in dealing with the income tax code. He said we should not employ that existing principle because new facts arose. I think that is a weak argument now. It could be pleaded when the excess profit duties were imposed. It is an argument that could be pleaded when the corporation profits tax was imposed, and it could be pleaded when the super-tax was imposed. These were not new sets of facts, but the general principle of the income tax was recognised, and the Minister and the Treasury did not take upon themselves the assessment of corporation tax or super-tax. They allowed these matters to go through the ordinary channels. I have not heard from the Minister yet any sufficient reason why the ordinary channels should not be pursued in this respect, and why what are admittedly new facts should not be allowed to go to the Revenue Commissioners for their determination in the ordinary course.

I will deal with a couple of points which have emerged, and will not deal with the others. It seems to me that if the Opposition are in good faith, and I am accepting that the Opposition are in good faith, they completely misunderstand this matter. We have been talking about probing into the private affairs of individual concerns, and the affairs of private individuals—persons who might be compelled to lay open all their business affairs. But there is nothing new involved in this. At least nothing is involved so far as the Minister for Finance or the Minister for Industry and Commerce is concerned. Where the personal element and the individual enters he is able to show to the Special Commissioners that he is in financial ownership of certain stocks and shares. That is provided for in Section 1, and it is only there that any probing into private affairs would be undertaken. Section 2 applies only to public companies, and there can be no fresh probing into the affairs of public companies; there can be no imposition to ascertain from them any more information than they are compelled by the existing law to disclose in their balance sheets.

To say that their business is wholly or mainly in the Saorstát?

Mainly. That would be a known fact within the ordinary everyday knowledge of most people in the business, or at any rate the information would be within the knowledge of the Minister for Industry and Commerce.

Is the Minister going to go on common repute? There you have the question where abuse would arise, and a firm that would be politically acceptable would have a better chance. It is not on common repute, but by an examination of the books.

We can have these books examined if one likes by the Revenue Commissioners. That is a particular aspect. Is there any other? Every public company in its balance sheet discloses whether it is or is not incorporated under the laws of Saorstát Eireann. I come back to the whole point again. Where is there any violation of the intimate and confidential affairs of a public company? Of course, if the Deputy and the Opposition generally have misunderstood the section and if, notwithstanding everything that has been said, they believe that it is concerns in the ownership of private individuals that are going to benefit, then I think that they certainly ought to make amends and allow this to go through without further discussion.

Why does the Minister object to having it done by the Revenue Commissioners?

For two reasons. We heard from Deputy Finlay that if the Revenue Commissioners were to have access, and if this were carried on under the ordinary income tax law, there would be an appeal from the Revenue Commissioners to the Special Commissioners and probably from the Special Commissioners to the courts on points of law and fact. The whole case against this section has been that there might be publication of the intimate concerns of a company. Is there any better way to secure that publication than by a process of law which will mean that the affairs of that company——

The Minister is apparently unaware that income tax appeals are heard in private by the Circuit Court Judge.

Only in the Circuit Court; not in the High Court.

The facts do not come before the High Court.

It is only a question of law comes before the High Court. No facts come before the High Court.

The law would not be dissociated from the facts in these cases. You could not possibly discuss whether under the law a company was entitled to this without having advertence to the facts, and the facts will be found to be divulged in the High Court. Suppose a company went to the High Court and lost its case there, even though the case were held in camera, that very fact would be an intimation to the public that they were not entitled——

What will it be when they come to the Dáil, as Deputy Little suggests?

I am perfectly certain that no case will arise which will have to come to the Dáil, that the companies that are refused a licence will be quite clearly companies which have absolutely no chance of securing a licence on any view of the facts. There is no possibility of any violation of secrecy. Most of the relevant facts will be disclosed by the company in its own balance sheet. If the question is as to whether a company carries on business wholly or partly in Saorstát Eireann, I say that that fact will already be within the knowledge of the Minister for Industry and Commerce.

In relation to the facts that could possibly require certification and they really fall under (a), (b) and (c) there will, in many cases, if not in all cases, be a need for examination and for probing into the affairs of the company. The Minister opened up a new line of horror in connection with the matter when he indicated that the thing was going to be done on common repute, on a sort of general notion that the Minister for Industry and Commerce would already have about the business of a firm. Nothing could be worse than doing it in that way, because if things are to be done along that line you cannot avoid favouritism and abuse. The particular privileges given under this section should only be given to a firm which certainly is entitled to them, and should not be given on the basis of common repute.

Section 7, as amended, put and agreed to.

I move amendment 25a:—

Before Section 8 to insert a new section as follows:—

(1) Every allowance granted under Section 8 of the Army Pensions Act, 1923 (No. 26 of 1923), as amended by the Army Pensions Act, 1927 (No. 12 of 1927), to the widow or to any child or dependent of a person who was killed during the rising of April and May, 1916, shall be exempt from income tax (including super-tax and surtax), and shall not be reckoned in computing income for the purposes of the Income Tax Acts.

(2) In this section, the word "killed" has the same meaning as it has in the said Section 8 of the Army Pensions Act, 1923.

The purpose of this amendment is to enable the pensions payable to widows or children of persons killed during the rising in April and May, 1916, to be paid clear of income-tax and surtax. In the amendment, as printed, there is a slight misprint and I move the amendment with the omission of the words "super-tax and."

Amendment, as amended, put and agreed to.
New section ordered to be inserted.
Sections 8 and 9 put and agreed to.
SECTION 10.
(8) Where the Revenue Commissioners are satisfied, in respect of any article liable to duty imposed by this section, that—
(a) the importer of such article resides or intends to reside permanently in Saorstát Eireann; and
(b) such article had been previously used by the importer or his family or household or had been previously used by the importer for the purposes of his trade or business; and
(c) such article is being imported into Saorstát Eireann for the use of the importer or his family or household or for the use of the importer for the purpose of his trade or business,
the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, permit such article to be imported without payment of any duty imposed by this section.
(9) Where an article could be regarded as chargeable with two or more of the duties imposed by this section, such article shall be deemed to be liable only to that one of those duties in respect of which the greatest amount of duty would be payable, and such article shall accordingly be chargeable only with such duty.

I move amendment 26: "To delete sub-section (8)." This amendment is merely consequential upon the introduction of a new section under amendment 73, which confers the same power in a separate section.

Is that limiting in any way the concession?

It puts it in more general terms. We can debate the principle, if you like, on amendment 73.

Amendment put and agreed to.
Progress reported; Committee to sit again to-morrow.
The Dáil adjourned at 10.30 p.m. until 10.30 a.m. Friday, July 1st.