With regard to the Resolution and the Schedule I should like to ask the Minister if he would give us some idea of what is contemplated under sub-section (7) of this Resolution whereby power is taken to authorise by licence any particular person, subject to compliance with certain conditions, to import without payment of the duty mentioned in the Resolution any of the fruits mentioned in the Schedule. I should like the Minister to give us some idea of what is contemplated in this, particularly in view of the fact that the Minister applies the tariff on cherries, strawberries and raspberries for a very limited period, and applies it over the whole year, apparently, on apples, pears, plums, currants and gooseberries. What is the particular reason for applying the tariff during a restricted period in the cases of numbers 4, 5 and 6 of the Schedule and leaving the period unrestricted in the cases of, say, 7 and 8, not to speak of numbers 1, 2 and 3? I should like to know what is the general policy enshrined in sub-section (7), because if there is no policy enshrined in sub-section (7) then there is, apparently, an all-the-year-round tariff to be put upon apples, pears, plums, currants and gooseberries. I should like to know if that is so.
Resolution No. 3.
Nos. 7 and 8—currants and gooseberries —are grown in sufficient quantity to supply our demands for the whole year. If the Deputy would look up the figures he would find that, as a matter of fact, there is a small export trade in these fruits.
Does that include the demands of the jam manufacturers?
Yes; it applies certainly in the case of gooseberries. I am not quite sure with regard to black currants, but it is admitted that there are more gooseberries than we require for our own use. As soon as we get the full figures from the jam manufacturers—which we have asked for—we will be in a position to give definite information. There is no intention to issue a licence with regard to cherries, strawberries and raspberries, within the dates mentioned, as dessert fruits; but so far as the jam makers are concerned, as soon as we get the returns we have asked for, consideration will be given to the issuing of a licence for a certain percentage of what they have been importing up to this.
The case of apples, pears and plums is different. The crop in regard to these fruits is rather variable. It is not like strawberries and raspberries which are fairly regular from year to year. The crop in the case of apples, pears and plums depends on the season and on the sort of weather that obtains, particularly in the month of May. Because of this we cannot foretell with any degree of accuracy at all for how many months our home supply of these particular fruits would last. As a matter of fact, we have issued licences freely for the importation of apples up to 31st July. From that date up to, say, the last day in August we intend to issue licences with regard to the quantity so that there would not be an over supply of apples when our own supply comes in. As soon as we are satisfied that all the apples in the country are used up we would issue licences freely again. I think that, as far as dessert fruits are concerned, apples are the only exception that will be made with regard to the issuing of a licence. With regard to jam making, it is uncertain for the last few years and I cannot reply on that for the moment because the returns from the jam manufacturers have not yet come in in detail.
If the prices go up substantially in the case of these dessert fruits, would not licences be issued then?
If there was a substantial increase in prices and a great scarcity in the country it would be different; but I think that, as far as we can judge from the figures of the acreage under raspberries and strawberries, and the demand from the Dublin market—we have not got the others— we can come to the conclusion that no licence will be necessary within the dates specified.
The Minister has been kinder to the jam manufacturers than to the ordinary consumer of fruit.
I should like to know does the term "currants" cover what the grocer ordinarily means by that term?
No, it only applies to fresh currants.
Should not that be expressed in the Bill? The customs officers are very nice people, I know, but if you give them an inch they are inclined to take an ell.
I should like to say a word in defence of the humble prune.
Only fresh prunes are intended, of course.
That is a new one on me. I have never met a fresh prune. Has anybody in the House ever met a fresh prune? I understood that it was a dried commodity.
Possibly, but we do not know what may be grown in this country yet.
I should think that a fresh prune would be beyond the persuasive powers even of President de Valera.
Prunes are being grown in this country.
I submit that it is a commodity very largely used on the tables of the poor. The tariff proposed to be imposed is not a very heavy one, I admit—a penny in the pound—but I should be surprised if the bulk of the prunes consumed is produced in this country, and I doubt if there are facilities for producing them in this country. I think that the Minister should examine the matter, and, if it is not practical to produce them here, that the tariff should be removed in the case of prunes.
Imported dried prunes are exempted, of course.
I think that a Minister for Agriculture ought to be able to define what are fresh prunes and whether the prune grows on a bush or a tree, or is a root.
It grows on a variety of plum tree.
But not as a prune!
We will have mock turtles next.
In view of the fact that there has been an over-abundant supply of apples in the country for a great many years, and a very poor demand for them, I should like to know why does the Minister intend to remove the tariff as regards apples.
The tariff will be removed as soon as all the apples in the country have been used. I am at a loss to know whether the Deputy is for or against the tariff on apples.
I am in favour of the tariff.
The apples would last the whole year round if imported apples were coming in at the same time, but we hope that, by keeping the foreign apples out for a certain period of the year, the home-grown apples will be used up.
As far as I can see, two or three months will not be sufficient to do that.
If it is not we can go further.
Would the Minister say to what class of person licences for the import of apples will be issued before the apple season this year and after the apple season this year?
As a matter of fact, they are being issued at present to any person who applies.
Will there be any change in that policy afterwards?
I move: "That the Dáil agree with the Committee in Resolution No. 4."
This Resolution does not impose any new duty. The duty on mineral hydrocarbon white oil imposed last year was evaded by certain importers adding a colouring matter to the oil. We have got here in this Resolution a new definition which will prevent that system of evasion. Chemists have been working on this for some months and have produced this definition. We think that even it is not quite watertight, and that it will be necessary to have some slight modification of it later on. The duty position is not altered at all. This is merely a device to prevent the system of evasion which grew up during the year.
Would the Minister say if the Revenue Commissioners are now letting motor oils come through? I think they were being held up for a considerable time at the ports.
This Resolution does not deal with motor oils. If motor oils were held up. I do not know what the reason was.
The Revenue Commissioners, apparently, were not satisfied that motor oils were outside the definition.
On examination, I think the Deputy will find that occasionally a consignment of motor oils may have been held up for test, but there has been no hold up of motor oils as such.
I move: "That the Dáil agree with the Committee in Resolution No. 5."
I move:—"That the Dáil agree with the Committee in Resolution No. 6."
Would the Minister say where felt hats are being produced in the Free State?
They are at present being produced by one firm in Cork. I am not quite sure to what extent, or if they have all their machinery installed. I have one of their hats myself, and I find it a very excellent article. They anticipated that at about the present time they would be able to supply about 25 per cent. of the requirements of the country. There are two other firms also in touch with the Department. They propose to establish factories for the manufacture of these hats within the present year. I anticipate that by this time next year we shall have 100 per cent. of the requirements of the country being produced by the factories established here if existing plans work out as anticipated. One firm has definitely gone ahead by having the necessary machinery installed, and the other firms are prepared to go ahead as quickly as possible.
Can the Minister say what is the price of these hats, or was the one he got himself a presentation copy?
No. I paid for it.
Would the Minister say what is the effect of paragraph (a) of sub-section (1)?
The effect of it is to change the emergency duty into a permanent duty. The duty on cloths was increased very largely in consequence of the lowering of prices and of attempts to produce cloths at uneconomic prices. The increase in the duty on cloth necessitated a corresponding increase in the duty on articles made from the cloth. The duty on wearing apparel, men's and women's, "made wholly or mainly from woven tissues wholly or partly of wool or worsted" was increased by an emergency order. It is being made a permanent duty in this Resolution.
Is the Minister aware that the operation of the duty on woollen cloths and readymade clothing definitely resulted in the public being unable to get the cheaper ends of women's outer wearing apparel at the price they used to be able to get them at? It is now virtually impossible to buy here a woman's coat under about 25/- or 30/- which used to be available at £1. I think if the Minister looks into the matter he will find that the manufacturers of women's outer wearing garments have practically given up the attempt to produce a woman's coat under 22/6.
I cannot say at the moment at what price these are being produced—I mean the cheaper grade of women's outer garments. There is a substantial leeway to be made up in that industry because nothing had been done in consequence of the low rate of duty that prevailed until this time last year. During the past year substantial advances were made, but still we have a long way to go before we can hope to be self-sufficient in the matter of factory-made women's outer garments. At the moment a certain amount of leeway is being made up by the home manufacturer: by dressmakers and others as well as those who intend wearing the coats and dresses and things of that kind which they make themselves. I am not at all sure that it is not just as desirable to have production in that form as in the factory form. The information at the disposal of my Department would indicate that there has been a very substantial increase in the number of persons engaged in the dressmaking business in their own homes and in the output of those so engaged.
I find it difficult to follow the Minister's explanation: whether it is that in fact coats are being produced and that there is no scarcity, or whether, on the other hand, there are no factories producing cheap women's outer garments, but that the trade has passed into the hands of home dressmakers operating on their own.
The position is that up to this time last year we had practically no factory production of women's outer garments at all. Now we have. There are a number of firms engaged in the factory production of women's outer garments. These firms are not sufficient to supply what would be regarded as the ordinary demand for factory produced articles. This deficiency is made up in two ways: by continuing imports on the one hand, mainly of high-class goods in respect of which the import duty does not make much difference, and by the output of the home dressmaker. Ordimarily speaking, if this situation did not exist there would be a larger consumption of the factory produced article as against the dressmaker produced article. At the present time you have a larger production of the dressmaker produced article than of the factory produced article.
The people who will have to pay this duty are the poor. They are the principal purchasers of these cheap outer garments for women. They will suffer most under this. The country dressmaker will charge from 10/- to 12/- for making a coat. About three yards of material are required for the making of a coat. If 12/- is charged for the making of a coat, the total cost of which is £1, there is only 8/- left for the purchase of the material and trimmings. My experience has been that the Irish manufacturers are avoiding the cheap end of the trade in women's outer wearing garments.
On the contrary, so far as there is factory production of women's outer garments at all it is the cheaper class of garments that is being produced.
I put it to the Minister that if such representations have been made to his Department they do not give the position correctly. There are, so to speak, three classes of trade. First, the highly expensive class—those who send to London or Paris for their clothes; then there is the middle trade of good quality; and thirdly, there is definitely the cheap trade which caters principally for the poorer classes in Dublin and the rural areas. I quite agree that the middle trade is being surprisingly well done in Irish factories, but I think that, if the Minister examines the lower end of the trade, that is, the garments which will not retail at a price higher than 25/-, he will find that these are practically unprocurable from Irish manufacturers and he will find that no dressmaker, working at home, could by handwork, produce it. It is purely a factory product and Irish manufacturers are not trying to produce it. They are avoiding it and trying to take all the middle-class trade, on which they can make a fair profit by getting a price from 35/- to 75/-.
I move: "That the Dáil agree with the Committee in Resolution No. 7."
This is a remission of duty.
I move: "That the Dáil agree with the Committee in Resolution No. 8."
What is the effect of this Resolution? Does it remove mops from the operation of the tariff?
It brings mops under the definition.
I move: "That the Dáil agree with the Committee in Resolution No. 9."
I move: "That the Dáil agree with the Committee in Resolution No. 10."
I am surprised to find that, in regard to these excise duties on moneylenders, there is no differentiation between Irish-speaking and non-Irish-speaking moneylenders.
The Moneylenders Bill, lately under consideration, definitely introduced a policy of Gaelicising moneylenders and these excise duties offer an opportunity of giving that policy some assistance.
If the Deputy had really seriously considered this matter, he would have realised that a duty on Irish-speaking moneylenders would be an anomaly. The Irish speaker would not lend money; he would give it to you.
Under present circumstances, he has not got it to give.
I move: "That the Dáil agree with the Committee in Resolution No. 11."
Reference No. 1 brings component parts of umbrellas other than those specified subject to duty. Reference No. 2 makes permanent a duty at present in force under an emergency order. With regard to Reference No. 3 it will be remembered that the duty on woollen cloth was 20 per cent. on cloth under 2/- per yard, and 30 per cent. on cloth over 2/- per yard. The point of difference is being brought down from 2/- to 1/3, so that the duty is now 30 per cent. on cloth over 1/3 per yard, and 20 per cent. on cloth under 1/3.
Might I remind the Minister that that touches on exactly the same problem that I mentioned a few moments ago? These cloths are used in the manufacture of the cheap type of women's underwear, and the Minister is now bringing these cloths under a duty of 30 per cent.
Cloth subject to duty and of a kind not produced within the country, required by the manufacturers of women's garments only, is permitted in free of duty under licence. We gave that concession to that particular trade as a means of fostering its growth here. The same concession is not given in respect of men's garments or other classes of garments, but, in respect of women's outer garments, cloth of that particular kind which is not produced in the country—cotton cloths—is imported free of duty. The change does not affect them.
Perhaps the Minister would now explain to the House how he reconciles that with the policy of the Executive Council to decentralise industry? The factories are to get this cloth free of duty, but the rural dressmaker, who represents the most perfect form of decentralised industry, has to pay 30 per cent.
I think the Deputy misunderstands me. A great deal of the cloth used in women's garments is woollen cloth in respect of which there is no concession given at all. There is, however, in the manufacture of the other cheap garments, a cloth which is mostly cotton but which is subject to duty because it has some wool mixed through it. That cloth which is very cheap—it is sometimes 9d and 10d a yard—is allowed in free of duty. That cloth, I think, is not used and would scarcely be used by the home dressmaker. It is suitable only for factory production of very low-grade cloths.
The Minister may rest assured that no cloth coming into this country under 2/- per square yard was pure wool cloth. They were all adulterated more or less by cotton. They were mixed cloths known in the trade as woollen cloths and I think that, if the factor is to get the concession the Minister indicates he is to get, the Minister ought to consider the claims of the country dressmaker. It simply means that he is taking the business away from the country dressmaker. His eventual objective will be to wipe the country dressmaker altogether out of the cheaper end.
The class of goods I am referring to are not, and could not, be made by a dressmaker at all. They are a type of goods that can only be sold at the prices at which they are sold because of the fact that they are produced in huge quantities. They can cut out one hundred garments on one machine at the same time and sew them on the one machine in half-an-hour. It is that type of goods, which can be sold at that price because of mass production methods, that I am referring to but the type of garment that has to be made individually is the type that requires a somewhat different kind of cloth and in respect of which no concession is given.
With regard to Reference No. 4 which deals with saddlery and harness, these materials were excluded last year, under Section 9, from the tax in respect of woven tissues or blanketing for use in saddlery or harness work but saddlery and harness materials are now introduced in one or two sections in the Schedule to Resolution No. 11 and in the following Resolution 12. It is introduced there in sub-section (3) and I think I saw it somewhere else. The Minister probably knows that saddlery is a very important matter for horses. If the quality of the material be not up to the mark, they may possibly get sores. There must have been a reason for excluding it. Can the Minister tell us if there has been any expert examination of the quality of the material which shows it to be suitable? I do not remember that there is any tax on saddlery coming in here.
This is not saddlery.
I know it is not, but it refers to woven tissues for use in saddlery and harness and, while there is no tax in respect of saddlery coming in here, if you are going to tax the material coming in or the local material is not suitable, it is a disadvantage to the harness makers here. The harness makers here are very expert. They make excellent saddles and other equipment for horses, and it would be a great pity to interrupt their business. Is the Minister satisfied, from any examination he has made, that the quality and price of this material are as good as that in use at present? I do not know but that they are using local material, but as it was excluded last year it must have been excluded for some reason. I have not heard that there has been any production of this particular quality of material that would be suitable for this trade.
In fact the exclusion was made in 1928 or 1929, when the duty on woven tissues was first imposed. Harness cloth was excluded at that time because the Irish woollen mills were not producing it at that time, but since then they have been producing it in first rate quality and in adequate quantity, so that the exclusion, which was agreed to in 1929, has now been removed and the duty on woven tissues has been applied to these cloths. The Deputy can be satisfied that there will be an adequate supply of them in first rate qualities.
When did the supply commence?
Some time ago.
How long ago?
One mill started and then another. I could not say when the first mill started, but there are a number of mills making it now.
It was excluded in last year's Finance Bill.
The only change made in last year's Finance Bill was to increase the duty upon woollen cloth. The original woollen cloth duty was imposed in 1929, following a report from the Tariff Commission. Subsequently, a motion was brought forward excluding this cloth because, at that time, it was not being supplied by the existing mills. It is now being supplied by them.
Is the Minister satisfied that the cloth being produced is suitable?
Yes. We are hoping to export some of it. As regards Reference 5, these items are being removed from the furniture duty because they are already dutiable under other headings. Reference 6 provides for the granting of licences in the case of certain horse-drawn vehicles. During last year, some extraordinary types of horse-drawn vehicles were presented to the Revenue Commissioners. These vehicles were of a type that could never be made here and were for exceptional purposes. We have decided to introduce a licensing system in case there are any more of these unique vehicles offered.
Would the Minister describe one of these vehicles?
One of them was a peculiar sort of watering cart. Reference 7 imposes on plough parts a duty which is already in existence under Emergency Order. Last year, we exempted plough parts from the duty then imposed. That led to wholesale evasion of the duty. There is now production here of plough parts for all makes of ploughs.
"Not exceeding 5/- in value?"
That relates to agricultural machinery—a different duty.
What does Reference No. 8 mean?
That repairs a drafting mistake in one of the Finance Acts of last year which left shaped parts of uppers free of duty although it was intended that they should be dutiable, as are other parts of shoes. Shaped parts of uppers were really duty free during the year. We kept that fact dark lest anybody should attempt to import them. They cannot do so now because the mistake has been rectified.
I move: "That the Dáil agree with the Committee in Resolution 12." Reference 12 makes fish paste and similar pastes subject to package duty.
Is there anybody manufacturing fish paste in this country?
A number of firms are manufacturing it. Reference 2 is consequential. As regards Reference 3, we have been giving to cap manufacturers free importation of cap cloth. We have decided to withdraw that concession. We find that some of the manufacturers are using imported cloth exclusively, while some are using as high as 50 per cent. of home-produced cloth. We have decided to withdraw the concession and to impose the woollen duty upon cap cloth, as upon other cloths, and thus encourage the use of Irish cloth. The duty payable is, in any event, trivial—20 per cent. On a yard of cloth costing 10d., only 2d. would be payable and out of that they would be able to make a dozen caps. As regards Reference 4, we exempted from duty last year, at the request of some Deputies, steel frames used for stained glass. These are now being produced here and, with the agreement of everybody concerned, the exemption is being withdrawn. Reference No. 5 is largely consequential on the withdrawal of the exemption from duty of saddlery and other cloths. In effect, it increases the duty on blankets and rugs from 20 per cent. to 30 per cent. Reference No. 6 doubles the duty on down quilts. Reference No. 7 has two effects. It makes greeting cards—Christmas cards and the like—subject to the stationery duty. It exempts from duty printed wax paper. We kept that duty on during the year and approached some firms with a view to having the work done within the country. No firm has yet started to do it. We have, therefore, taken off the duty, but we shall continue our efforts to get some firm to undertake the work, in which case the duty would be re-imposed.
How much is the duty on Christmas cards?
Fifty per cent. full, with ten per cent. preferential rate. The first portion of Reference No. 8 is merely a matter of drafting. It exempts the articles set out from the cast iron duty because they are dutiable under another Reference. Paragraph (b) has the effect of making certain classes of pipes subject to duty. These articles can be made here although this change is mainly being made because of the evasion of duty on rain-water pipes. These were being imported as smoke pipes and ventilation pipes and were thus escaping duty. To bring that evasion to an end, it is necessary to make all these classes of pipes subject to duty. They are all being made here.
I move: "That the Dáil agree with the Committee in Resolution 13." Reference 1 imposes a duty on rear half-axles. Deputies will remember the discussion which took place in December last when the duty on motor chassis parts was removed. We kept the duty on certain assemblies of parts—work which was then being undertaken in the country. We have been looking into the matter since, and we have decided to keep the duty on rear half-axles which are also being manufactured here. This will not interfere with the policy enshrined in the Finance No. 4 Act, under which the duty on other chassis parts was removed.
With regard to the manufacture of rear half-axles, the people who will be making these axles will be the same people who are making the axles for ordinary carts.
No. This is a different class of article.
It is a different class of article, but the same people will be making both.
No. The people who make these axles are engineering firms who grind cylinder blocks and do gear-transmission work. They are different from the coachbuilders who go in for cart axles.
The people who turn out cart axles are not coachbuilders, but foundry men. Representations were made that if a tariff were put upon axles and cart boxes, into which the axles fits, they could be made in this country. The result is that cart boxes are being manufactured here which are not up to specification. My experience is that it is impossible to get cart boxes which correspond with the specification. Anyone familiar with the trade knows that the difference of a fifteenth of an inch makes a cart box perfectly worthless. Has the Minister satisfied himself that the firms who will manufacture rear half-axles will be able to do so with that degree of accuracy which is necessary in an engineering job of that kind?
I am satisfied that the work is being done with reasonable accuracy, expedition and efficiency.
Is the trade within the Free State being supplied from Free State sources?
No. 3 refers to certain additions to the duty on brass goods. There are a number of changes in No. 4. The component parts of window shutters are being made subject to the same duty as window blinds. Deputies will remember that in the autumn of last year, after a great deal of persuasion, I removed the duty on extension ladders. I had hardly done so when two firms started to make them here. After leaving the Dáil on a Friday evening, having removed the duty, I found representatives of two firms in my office who proposed to make ladders here. There are two firms making ladders now and we are imposing the duty again.
Is Slingsby's one of them?
Yes. The idea in imposing a duty on shaped flooring is to that such items are brought in as being subject to the duty on articles of wood. As we found it inconvenient to administer we repealed it. We then imposed a duty on specific wooden commodities. The list was not exhaustive. We tried to make it exhaustive and, in the period that has elapsed, we have had an opportunity of examining the matter further, and I am glad to say we are able to extend the list fairly considerably.
Would the Minister look at 34 and 45? For instance, take No. 34. May there not be serious difficulty about the definition of flooring?
All parts of machinery are exempt from this duty.
Still, this would be deemed to be machinery.
I presume so.
Would the Minister define No. 45?
I would not.
Does the reference here mean a stretcher to carry a prostrate corpse or a stretcher to make shoes fit?
This question of a stretcher is going to present some difficulty.
It is mainly intended for a stretcher for carrying bodies.
Could the Minister give some information about No. 30?
That is intended to cover box-boards. The duty which was imposed on parts of wooden boxes has been evaded by the importation of the wood roughly prepared, but cut to certain lengths, so that it has only to be sawn in two to become parts of a box. We are meeting that by imposing a duty on the boards. This catches box-boards.
It may have a wider application. That is what I am afraid of.
I do not think so. We have gone into the matter. We do not catch any boards that we do not want to catch.
Would not flooring come in?
That is the difficulty. We may find subsequently that the Commissioners will apply this otherwise.
There is, in relation to this, a licensing clause, and if it is found that there is something we did not foresee—although we had an examination into it—the licensing provision would operate to deal with the difficulty.
What is the amount of duty imposed here?
Fifty per cent.
Surely the Minister will not contend that the words are not open to question: "Boards and planks of soft wood, the minimum thickness of which does not exceed one inch"? These boards are generally 12x9x3. Are they not liable to duty?
Surely, as Deputy Good contends, that consists of 30 per cent. of the timber that comes in. I am referring to ordinary scantlings which are used by builders, 30 per cent. of which, at a conservative estimate, will be affected by this proposal. Does the Minister deem it prudent to do that in existing circumstances, in order to prevent the introduction of parts of boxes?
Yes. The wood to which Deputy Good refers has always been dutiable. It was made dutiable under the Act of last year as builder's woodwork.
I am talking of ordinary scantlings, 12 x 9 x 3 and sawn here. There are certain other classes of timber, some of which comes in as scantlings of less than one inch thick.
I have looked into the question. There is no reason why these should not be sawn here.
Is the Minister satisfied that this proposal is not going to create considerable confusion regarding timber supplies?
The Minister pointed out last year, when we had flooring under consideration, that he was prepared to allow rough boards in free, but that the preparation should be done here. In order to ensure that he put a heavy penalty on machine flooring. It strikes me now that a duty of 50 per cent. will be put on a commodity that was free last year, thus killing the other proposal.
I would like the Minister to clear up the situation, because it appears to be full of difficulties.
As I explained to the Deputy, the duty he has been talking of, that on parts, has been evaded by importers bringing in prepared wood, cut to lengths. It is necessary to prevent that type of evasion by imposing this duty. After examination and consultation we have satisfied ourselves that we have caught nothing we do not want to catch. Any wood subject to this duty should be subject to duty in order to get the work of preparation performed here.
But the Minister, in order to catch other people, may catch those it is not intended to catch. It was clearly expressed in this House, when the proposal was under consideration some months ago, that it was the intention to admit rough material free so that it could be prepared for the saw mills here. In order to catch box-makers the Minister may now tax the rough material. In his attempt to get the box-maker he is going to catch the rough commodity from which flooring is manufactured.
That is not less than an inch in thickness.
It may be much less. You can get three-quarter inch flooring and half-inch sheeting. They are all under an inch, and are imported in the breadth with the intention of getting certain workmanship done here. This is going to cut across the proposal.
The bulk of the wood that will come in for use by builders will not be subject to this particular definition. There is no question of that. If there is any type of wood that might be subject to this definition and that is required for purposes other than box-making, then the licensing provisions may be operated to permit it being imported free of duty. This duty in the main achieves our purpose, which is to prevent the importation of component parts of boxes, particularly egg-boxes.
I am not questioning the Minister, but I am questioning the method by which the intention is to be carried out. Where is there any limitation in the wording confining this to timber imported for box-making purposes?
You could not get that definition in.
Why? You have defined the dimensions of the wood. One way out of the difficulty would be to say: "boards and planks of soft wood, the minimum thickness of which does not exceed three inches by one inch." That might get over the difficulty. Personally, I think the Minister's attitude in regard to the component parts of egg-boxes is exceedingly silly, and will do very material injury to the egg trade. The egg-boxes at present manufactured from wood sawn in this country are by no means comparable to the egg-boxes that used to be manufactured from foreign sawn timber. I believe the Department of Agriculture knows that.
The Department of Agriculture are quite satisfied with the present position.
Then the Department seem to have changed their mind since I first knew them, if that is their attitude at the present time. If the Department knew anything about the egg trade they would make every effort to end this tariff. If the Minister knew anything about the egg trade he would put an end to the tariff immediately. Unless the Minister is going to create great inconvenience in the building trade generally, he ought to revise his definition of the timber he wants to catch under this Resolution.
The building trade will not be inconvenienced in the least. If there is any woodwork for which a special case can be made, the licensing provisions will be made available.
I may tell the Minister that the building trade is being very seriously inconvenienced at the moment by his tariffs. I suggest, where it is not his intention to add further difficulties to that large industry, it should be made quite clear in the Schedule. All I ask is that this expression be clarified so that we will not add further difficulties where there is no intention to do so. If the Minister will look into that point it will save a great deal of trouble to his own Department and to others.
I will do so.
What does Reference No. 5 do?
It excludes road springs from exemption. They have been made subject to duty by agreement amongst all parties concerned.
What does Reference No. 6 do?
There is a duty at the present moment on roofing felt. There seems to be no purpose in having it on roofing felt without having also a duty on damp courses. The duty therefore has been extended to cover damp courses.
The proposal sets out to delete the word "roof" and add the words "or as a damp course." Is it the intention to admit roofing felt and put the burden on to damp courses?
The intention is to cover both.
Then why is the proposal so worded?
If the Deputy relates this proposal to the original proposition he will observe that it is purely a matter of wording.
I move: "That the Dáil agree with the Committee in Resolution No. 14."
Has the Minister anything to say about it?
It is merely giving effect to the Budget statement in relation to excess profits duty.
Will the Minister say if persons who initiated legal proceedings, as they had a perfect right to do under the law as it stood, will be indemnified in relation to any costs incurred? The law was in a certain position and under it they had the right to take these proceedings and they incurred costs. Now the Minister puts them out of court. I think it is grossly unfair and something should be done for those persons because they are deprived of their rights in regard to the costs they have incurred by the Minister's act.
The original intention of the Legislature in imposing excess profits duty was to impose it on the person or persons engaged in business at that time. So far as I have been able to examine the Act of 1915, in respect of which this duty first became chargeable, it is fairly clear the intention was to get the excess profits duty from the persons then owning and carrying on business. This particular amendment effects quite a different purpose.
Is the Deputy now discussing Resolution No. 15?
The first portion of my remarks was directed to the Act of 1915—the substance of the Act. Reference No. 15 here seeks to alter that, but the person who is affected by the terms of the Act is referred to in No. 14:
that the charge of excess profits duty effected by Part III of the Finance (No. 2) Act, 1915, and the Acts amending or extending that Act was not repealed, prejudiced, or affected by Section 32 of the Finance Act, 1926 (No. 35 of 1926).
First, there is the principle I have stated, that it was the person carrying on the business at the time this imposition was made in the Legislature, who was affected. The terms of the 1915 Act are quite clear:
The duty may be assessed on any person for the time being owning or carrying on the trade or business or acting as agent for that person in carrying on the trade or business, or, where a trade or business has ceased, on the person who owned or carried on the trade or business or acted as agent in carrying on the trade or business immediately before the time at which the trade or business ceased,
I do not wish to interrupt the Deputy, but I should like to know are we discussing Nos. 14 and 15 together?
If the House so desires, they could be discussed together.
I think it would be better to discuss them together; 16 is different. There is a slight difference between 14 and 15.
We can take 14 and 15 together.
Suppose we take 15.
I think if we decide the principle in 14 and 15, then 16 could be quite easily disposed of.
If my interpretation of that enactment is correct it would make the person carrying on the business now liable. We entered into possession of that asset under an agreement. That is the agreement which has been referred to by the Minister as the "Secret Agreement." When speaking of it as a "Secret Agreement" there has been no reference made to the advantages derived under that agreement. The final clause of that agreement gives us all the arrears of taxes due to the British Government in 1922. These were given to us. It is in respect of that agreement which the Minister and his Party refer to as the Secret Agreement that these moneys are being collected. Those moneys, such as they were, were due from persons owning the business. This amendment, if I interpret it correctly, alters the situation entirely, and it harnesses responsibility on any person who entered into possession of a business by purchase or by any other means, by bequest or anything else of the sort. That was not the intention nor the words of the Act which gave the right to collect this particular tax. Section 15 here states:—
(1) That sub-section (2) of Section 45 of the Finance (No.2) Act, 1915, shall be construed and have effect and be deemed always to have had effect as if the words "at the date of the making of the assessment" were inserted therein in lieu of the words "for the time being" now contained therein.
What is the meaning of that section? It has only one meaning, and that is that the persons who were originally legally responsible for the excess profits duty, which runs from that enactment of the 1915 Act, are not to pay, but their successors in title, without knowing what their liability was, must do so. Recollect it is 18 years ago, and they are having placed upon them a tax for which they were not liable at that period. If I am wrong let the Minister correct me, but I submit that is the meaning of this section. If it is not a question of changing, altering, amending or extending the imposition which is made by reason of Section 45 of the Finance (No. 2) Act, 1915, passed by the British Legislature, then I do not know what it is. If my recollection is correct, Section 32 of the Finance Act of 1926 was amended last year. It was amended to the disadvantage of the taxpayers liable under it. It read in any case as originally drafted and was law until last year:—
Subject to the provisions of this Part of this Act and notwithstanding anything to the contrary contained in Section 39 of the Finance Act, 1921, no repayment or adjustment of excess profits duty may be obtained or made and no assessment or additional assessment to excess profits duty may be made after the 30th day of September, 1926, except in a case which is by virtue of this. Part of this Act deemed to be an undetermined case.
Apparently in any case which is not a determined case there was an end of it so far as excess profits duty was concerned. Anyone who is acquainted with business accountancy knows when you read of a case like that and take that as an undetermined case, you can go on with your business.
Does that section repeal the excess profits duty altogether?
Except in a case which was deemed to be an undetermined case. I presume what that means is this: If Murphy & Company, Limited, were in business, and they had no notice in respect of assessments in respect of excess profits duty other than they had paid, and there was no case pending against them otherwise, if there had not been an assessment then that they might regard themselves as being immune and not liable to be assessed——
In no circumstances not liable to be assessed?
No, I am going to qualify that—except in a case where fraud is proved——
Or wilful neglect.
I am very much afraid that in the eyes of the Revenue Commissioners wilful neglect is equally serious with fraud. There is no difference between the two as far as Finance is concerned. They would be both offences. Fraud and wilful neglect will be regarded equally as offences.
Will wilful neglect be regarded as fraud?
That would be a matter for the Revenue Commissioners. I am quite sure they would not be long making up their minds on it. What they do, what they are empowered to do and all their authority is derived from this Act of the Oireachtas. They keep within this Act and they must keep within the law. They are liable to be tried before the courts for a breach of the law but they are not entitled to be brought before the courts on a question of fact. Whatever we do here, it is we who are laying down the law and everybody knows what the interpretation of that will be. Everybody knows what that Act of 1926 gave or granted. Fraud or wilful neglect in the interpretation of the Revenue Commissioners is the same thing. There is a bigger question as to the person who is liable for this excess profits duty. If I interpret this new change correctly the scope is extended. Persons succeeding by purchase or otherwise entering into possession become liable if these amendments are passed. This Section 14 says: "that the charge of excess profits duty effected by Part III of the Finance (No. 2) Act of 1915, and the Acts amending or extending that Act was not repealed, prejudiced or affected by Section 32 of the Finance Act, 1928." What is the meaning of passing it? What had the Legislature in mind when they enacted the original clause? They meant to do something. And we are told now, according to this amendment, that it was not repealed, prejudiced or affected by Section 32 of the Finance Act of 1926. So much for that particular aspect of the case.
Take the general question. Take this particular tax, started as far back as 1915. Take, as a standard year, 1913 or 1914. Now while a great many firms do keep their accounts in regular order, quite a number do not. To go back to that period of years now, particularly with a clause of this kind, is taxing business people in a way which, to my mind, is unreasonable. I mean a tax on their understanding rather than a tax on their pockets. Ordinary business accounts ought to be able to be closed from year to year. The Statute of Limitations runs as against individuals. It is not running here. As far as the State is concerned, it should be in no stronger position than an individual, and business accounts ought to be closed each year and people ought to know where they stand exactly with regard to their accounts. I do not know what sum of money is involved in this. No matter what the sum is, I submit that what the tax was originally conceded to be and accepted to be should not now be extended, eighteen years afterwards; that if there was a concession in the Act of 1926 it ought to be maintained rather than refused, and that business generally will be all the better for having these things more up to date in future.
Does the Deputy argue that there was a concession in the Act of 1926?
It has all that appearance.
The Deputy was then the head of the Government and he argues that there was?
Will he tell us what it is?
It was apparently such a concession that it is now going to be withdrawn. Will the Minister tell us why that is—why he altered it last year?
Do I understand the Deputy to argue that there has been any change in the practice of the Revenue Commissioners in regard to the operation of that?
I do not know. I am not in the confidence of the Revenue Commissioners and I have not any responsibility for that. The Minister knows, and it is the Minister's duty to tell the House. The Revenue Commissioners, as I said, interpret the law as we make it. It is we who are making it and they have no option.
I should like to ask the Minister a couple of questions. Before doing so, I might say that I cordially agree with Deputy Cosgrave that the Revenue Commissioners should not be exempted from the operation of the Statute of Limitations. I would remind the Deputy, however, that at one time he filled the high office of Minister for Finance in this State with distinction and I cannot remember his introducing legislation to bring the Revenue Commissioners within the operation of the Statute of Limitations. I think his name would go down to the posterity of the taxpayers in high affection if he had done it. I trust he will see, if he ever has the control of a Minister for Finance in future, that it will be done.
Might I correct the Deputy to this extent? We entered into the possession of certain arrears of taxes. They had not been paid, while other people had paid. That was ten years ago. I submit that a large amount of the arrears was collected in that time and we did not strain the law to get them.
The Deputy did not want to give the taxpayers the benefit of the Statute of Limitations until he was finished with them. However, that is by the way. I want to ask the Minister this: As I understand it, the excess profits duty was repealed in 1926. Is it still in force, so that any person in trade, making a profit greater than he made in the scheduled year, is still liable to excess profits duty?
Only in respect to the period to which the excess profits duty applies. That is between August, 1914——
From a certain year. Would a trader be liable to assessment for excess profits made in the year 1927?
It is only for profits made in the years up to 1926?
There is no proposal to extend the reference to excess profits duty beyond 1921?
For excess profits duty beyond 1921 the proposal is that, where a person bought a business that had outstanding on it a claim for excess profits duty that ought to have been paid prior to 1921, whoever owns the business is liable?
Always has been.
The contention raised in the courts has been that where a person was only the successor in the business since the liability for excess profits duty accrued, he was not liable and that the Revenue Commissioners ought to go after the man who owned the business when the duty became due. That is the contention raised in the courts.
It is apparently a question of considerable obscurity, and it is difficult to find out what the effect of this Resolution is.
At least I have no intimation that that point in fact has been raised in the courts.
It would be of material assistance to all of us if the Minister would state briefly what the position is. He referred in his Budget statement to his right to collect this being questioned, and said he proposed to make it clear. I think he might go further and give a short explanation of what the exact effect of this Financial Resolution is.
I do not know whether I would be in order.
When this debate started on the Report Stage of the Financial Resolutions, I allowed considerable latitude, owing to the fact that there were schedules covering a number of articles. The two Resolutions now before us deal with a specific matter, and I intend that the ordinary rules of debate shall be followed; that is, that on the Report Stage a Deputy can speak once.
Surely a Deputy is entitled to speak on each Financial Resolution once?
I have only spoken once on this Resolution and that is to ask the Minister to tell us what it is about. I suggest that the Minister might have avoided that necessity if he had taken that precaution in introducing the Resolution.
The Minister may desire to conclude the debate on the Resolution and possibly to answer questions in the meantime. I shall allow him to do this.
It might shorten the debate if the Minister would make a statement which would clarify the situation. We all recognise that this is a matter of considerable difficulty and that people are in considerable doubt as to where they are at present.
In that connection I think I might, with your permission, sir, reserve my right to reply, and I think that the discussion ought to be limited then to Resolution No. 14. The trouble has arisen owing to the fact that Deputy Cosgrave, rising on Resolution No. 14, went on to discuss the subject matter of Resolution No. 15. I then suggested that we were taking both together and I understood it met with the assent of the House that they both should be taken together. In view of the trend of discussion, I think it might not be any harm to get back to Resolution No. 14 and afterwards deal with Resolution No. 15. I can assure Deputy Dillon that we are not acting in an arbitrary fashion in regard to Resolution No. 15, nor are we making any change in the existing practice.
I understand that we are trying to give statutory effect to a certain view. Another view has been raised against the Revenue Commissioners, and we are coming to the assistance of the Revenue Commissioners to give statutory effect to their view. But, frankly, I find it somewhat difficult to follow the exact application of the Resolution. Surely the Chair will agree that the Minister, when introducing a financial resolution, usually explains it and subsequently, if he deems it necessary, answers questions, if questions are put to him. Whatever the exact procedure is, the usual practice is that the Minister tells the House what the resolution is about and then holds himself, within reasonable limits, at the disposal of the House to answer questions.
The House will remember—I do not think it can have escaped its recollection—that at the present moment certain people do propose to challenge in the courts the legality of the action of the Revenue Commissioners in making certain assessments for excess profits duty. The basis, I think, of their case is that it has been claimed that the charge to excess profits duty was repealed by Section 32 of the Finance Act, 1926, which provided that as from that date assessments were to be made only in certain cases, and that this charge was not revived by the repeal in 1932 of the words in the 1926 Act prohibiting the making of assessments. The Revenue Commissioners have been advised all along, and have acted in accordance with that advice, that this contention is unfounded. On the other hand, it is possible that some people may bring this case into court. Those who are interested are well supplied with the wherewithal to bring it into court, well supplied, we hold, at the expense of the Exchequer with the resources which would enable them to initiate legal proceedings of undue length. Once those cases come into court, of course, the collection of the revenue would be considerably impeded, and in order to ensure that there would be no doubt in the mind of any person as to what the intention of the Legislature was, as expressed in 1926, Resolution No. 14 is now before the House. It provides that in order to remove doubts it be declared and enacted that the charge of excess profits duty effected by Part III of the Finance Act, 1915, and the Acts amending or extending that Act was not repealed, prejudiced, or affected by Section 32 of the Finance Act, 1926. That is the purpose of this Resolution.
I think that is a most amazing statement. In other words, the whole object of this Resolution is to forestall certain legal proceedings that were likely, apparently, to go against the Revenue Commissioners?
Not at all.
It is, on the face of what the Minister has said.
They would impede and hold up the collection of the revenue.
Certain persons held, and of course rightly held, that they had a perfect right to take these proceedings. If they were assessed wrongly, under law they had a perfect right to a decision on that matter in the courts. They instituted proceedings. It is not a question that they were going to do it. They had actually instituted proceedings. They had gone to their solicitor, briefed counsel and incurred considerable expense. The case had in fact, I think, been actually listed for hearing. If the aim of this motion is not to forestall the decision of the court I do not know what it is. It is a resolution to put out of court persons who have actually incurred expense. It does not matter whether they could afford it; that does not remove the injustice. If those persons, acting perfectly legally and within their rights, have incurred costs, and are now put out of court by the action of the Minister under this motion, I say in all justice they should be indemnified against their costs.
This is not a question, sir, about which we need get heated, but I think the Minister will agree that there is no precedent for this procedure, except one, and that is the precedent set up by the Cumann na nGaedheal Government when they forestalled the judgment of the British Privy Council Court, and effectively destroyed the jurisdiction of the British Privy Council Court in this country. So far as I recollect, that is the only precedent for attempting to forestall the interpretation of an Act of Parliament by the courts of the country. In that case the procedure could be defended on the ground that the impending interpretation was not by a court of this country. The statute was going to be interpreted by a British court; the possibility was that our Supreme Court would be overruled, and the interpretation of our courts set aside. The very dangerous procedure was adopted of forestalling the interpretation of a court of law by declaratory legislation. Perhaps the Minister will indicate whether he is aware of another precedent for such a procedure. I do not think there is another. I should like to remind the Minister that, if this procedure is here admitted, no man need ever start in this country again an action which is calculated to embarrass the Government. No man need ever apply for the protection of the courts against the Government, and the principle involved in this business is, to my mind, so fundamental that a very large body of people will not recognise its existence at all.
The whole system of our judiciary is maintained for the purpose of providing the ordinary citizen with protection against the State, so that he would always have the right, in the last extremity, to go to the courts, and that the courts, absolutely independent of the Executive, could protect him. Quite apart from the merits of any individual application in respect of excess profits duty, the fact remains that the statutes are there, the statute of 1915 and the statute of 1926. The only body that ought to interpret those statutes is the courts, and if a person invokes the protection of the courts against the Government this House should not intervene in that court action on one side or the other. If the legislators of 1926 did not make themselves clear it is not the first time they failed to do so. There is not a judge on the High Court bench who will not tell the Minister the same story, that again and again complicated questions of interpretation arise out of statutes passed in this Parliament, and every other Parliament in the world, but the principle has always been maintained that no matter how complicated they may be the business of interpretation was reserved to the courts and the citizen was entitled to the protection of the courts. Here, in the knowledge that an individual citizen has invoked the protection of the court and asked the court to intervene between him and the State, as we cannot intimidate the judge we propose to change the law. That is the blunt way of putting it. Charles I would have sent down his second footman and told the judge that there was such a thing in existence in this country as the block and the hatchet. The judge would have taken very good care to ascertain what the view of Charles I was on this particular lawsuit, and he would have put it into operation. Deputies may think I am being too severe on Charles I. I am quite prepared to put the blame on Queen Elizabeth, but that was the practice then. In order to protect the judiciary from that very kind of interference their positions were made unique. They were put in a very special, privileged position in order to protect them from interference, and because that interference is now impossible we introduce the next best thing, declaratory legislation.
Let the Minister remember that by so doing we are removing the interpretation of statutes from the judges on the bench to the Deputies of Dáil Eireann. I have the profoundest respect for the opinion of Deputy Corry on almost anything, but when it comes to interpreting the Finance Acts from 1915 to 1933 I hesitate to lay that burden upon his capable shoulders. Remember we have to vote on this Resolution after judging the merits of the case and deciding whether the Minister's interpretation of the Finance Act is the correct one. If we make up our minds that it is we must vote for the Resolution. But if we believe that the meaning which the Minister has put on the Finance Act is not the true meaning we should vote against the Resolution.
If Deputy Dillon would allow me to intervene for a moment, I might say that I have not spoken on the Finance Act of 1926. Whilst I might have a very high opinion of Deputy Dillon as a Deputy, when a legal gentleman finds it more remunerative to practise rearing pigs than to practise his profession, he must admit I have good reason for not having a very high opinion of him either.
I put it to the Minister that this resolution puts on us the onus of discharging the functions of the Supreme Court, and having discharged them to our evident satisfaction, to vote against our consciences. Until we make up our mind on that issue we cannot give an intelligent vote on this Financial Resolution. I cannot see how the Minister could defend such a position. We are being asked to intervene in a legal struggle between himself and a citizen and to paralyse the courts. If that is done in this case occasions may arise later when we shall be asked to do it in very different circumstances, and we might find this quoted as a precedent for such interference with personal liberty in this country.
The Minister asked the House to hold that this resolution did not interfere with the law as it stands. I would direct the attention of the House to paragraph (a) of the resolution which says: "That the charge of excess profits duty effected by Part III of the Finance (No. 2) Act, 1915, and the Acts amending or extending that Act was not repealed, prejudiced or affected by Section 32 of the Finance Act, 1926 (No. 35 of 1926)." Now, the Act of 1926 must have done something that this resolution wants to nullify. There is no doubt about that. Is there any ambiguity about Section 32 of the Act of 1926? The Act of 1926, sub-section (1) states:—
"Subject to the provisions of this Part of this Act and notwithstanding anything to the contrary contained in Section 39 of the Finance Act, 1921, no repayment or adjustment of excess profits duty may be obtained or made and no assessment or additional assessment to excess profits duty may be made after the 30th day of September, 1926..."
There is no doubt that this resolution is deliberately introduced for the purpose of repealing the protection given to citizens under the Act of 1926. The sub-section I have read clearly states that "no assessment or additional assessment to excess profits duty may be made after the 30th day of September, 1926." You do not want a lawyer to interpret that. This resolution aims at removing that protection given to the citizen. I am afraid that we are guilty of contempt of court, even by discussing the resolution here.
The Minister seems to resent very much the suggestion that this resolution is rendered necessary by a defect in the Act of 1932. If his resentment of that suggestion has any ground I should like to know why we have this resolution here at all. What is the necessity for this resolution if there is not, in fact, any defect in the Act of 1932?
There is, undoubtedly, involved in this resolution a rather dangerous principle and, I suggest, for the introduction of that dangerous principle, the Minister has certainly not given adequate grounds. This is retrospective legislation of a very dangerous and doubtful character. We must assume that this resolution has a purpose. I suggest, the only purpose it can have is to make it quite definite that there can be no doubt about the legality of a certain charge, the legality of which is in doubt. The Minister makes very subtle distinctions as to what his intentions are. His intention is not to bind the court; that is, the court will be perfectly free, and, with his usual presumption, he has not the slightest doubt that the court will decide on his side. Yet we must take it for granted that those persons who have determined to appeal to the court have been advised that they have a case. I suggest if that is so that there is, at least, a doubt on the point. There is a doubt that the court may resolve in favour of those who feel themselves aggrieved. Therefore, however much the Minister may try to gloss it over and try to suggest that he has another reason for doing it, in reality he is trying to prevent the court from interpreting the law as it now stands. That can be the only effect.
He says he has another intention, to prevent people even appealing to the court. I suggest that that is even a worse offence in a way than the one he is slow to admit. I make the suggestion that even a rich person, a person who can afford it, has a right to appeal to the courts in this country. When the Minister makes the statement that they are appealing to the court with money they have illegally withheld from the revenue, he is, I suggest, making a statement that is highly improper. He is, as usual, assuming where there is a legal doubt that his view is the correct one, that these people are guilty of fraud, whereas in reality the purpose of this resolution is to deal with people against whom the charge of fraud could not have been made in the past. I suggest the whole thing is extremely dangerous. In reality, we are retrospectively imposing a charge on people that was not there, or at least if we are not doing that, we are taking steps to see that there shall be no doubt that such a charge can be imposed, if the present law imposes it. I suggest there is no justification, certainly none but a trumpery justification, put forward by the Minister in seeking to deprive people of the right of appealing to the courts. I suggest that is the worst excuse we have ever heard in this House—to prevent people going to the courts, to frighten them off, because, forsooth, they may delay the collection of the revenue. It is an extraordinary reason put forward to deprive people of what is their legal right. This is retrospective legislation against them.
These are the two purposes. There was the case in which, apparently, there was a genuine doubt, at all events in a certain number of citizens of this State, and that there were arguable cases to come before the courts. This amendment is intended to accomplish two objects: to frighten them off of their legal remedy that they could get from the courts, or to prevent the judges interpreting the law. The Government may feel their vanity hurt because they were not able to carry through what they wanted last year. The Minister really repeats here his intention of trying to tie the hands of the court; he wants to deprive people of the rights they have to a remedy. Unless there is the very gravest possible ground, I suggest retrospective action of that kind should not be allowed by this House.
It is generally agreed that this is retrospective legislation. I should like to know what are the limits to which a Minister or a Government may go; or are there any limits to the extent to which they may apply retrospective legislation? It is a rather serious step. May I take an extreme and unlikely case? The Finance Acts of 1925 imposed an income tax of 5/- in the £1. Is there anything to stop any subsequent Government bringing in legislation adding a further burden of 2/6 or 50 per cent. to that 5/- and then proceeding to collect it retrospectively? Surely there must be some limitation to Parliamentary power in that direction. It seems to me that if we are to be open to retrospective legislation of this kind, and if business people's accounts are likely to be reopened, after a certain date, there is not much security. Surely we are entitled to such security and fair play, and, surely, we are entitled to protection from legislation of this character unless it could be shown that there is the very gravest reason for it. I would like the Minister, in this particular business, to justify his action from that point of view.
I suppose I had better confine myself, on this occasion, to Resolution No. 14. In that connection, possibly, it might be better if I were to deal, once and for all, comprehensively, with this question of the collection of income tax and excess profit duties, for the years prior to 1922 and 1923. The decision of the Government to proceed in this matter, in accordance with the policy laid down by our predecessors, and never departed from by us since we came into office, has been founded upon the opinion that if justice is to be done between one taxpayer and another the course we are now pursuing must be followed, and has been made inevitable by the practice in operation here since 1923. After the change of Government, and the setting up of the Revenue Department, the Saorstát Exchequer found itself under an obligation to meet claims by Saorstát taxpayers, on various grounds, for repayment of income tax and excess profit duty—duty paid in previous years to the Board of Inland Revenue for the benefit of the United Kingdom Exchequer. It was found that these liabilities were very heavy indeed.
Between the 1st April 1922 and the 31st March 1932, repayments of income tax in respect of the years up to 1921-22—income tax paid to the United Kingdom Exchequer—were made by the Saorstát Exchequer to an amount which may be estimated at no less than £2,250,000. And during the eight years which ended 31st March 1929, when the last repayment of excess profits was made, the repayment of excess profit duty, as apart altogether from income tax, amounted to not less than £627,000. Faced with this huge liability, for which this Government had no responsibility at the time, the Government of the day decided that the assets which attached to the Revenue Department at that date must be collected. Our Board of Revenue Commissioners took over the administration of the revenue as from the 1st April 1923. The assets in respect of income tax and excess profit duties of that date consisted of the outstanding arrears of tax, which had been already assessed, but not paid, and in addition the right to recover taxes which had escaped assessment, by means of additional assessment, penalties, etc.
The task of collecting arrears was first undertaken. Now I want the Dáil to grasp the position clearly in relation to these arrears. In order to simplify the matter I propose to deal, first of all, with the income tax position. At the date on which our Board of Revenue was set up income tax for two, three, four, five and, if we include 1922-23, even, in some cases, for six years was unpaid. The arrears in respect of this tax were due from taxpayers in every walk of life— farmers, grocers, publicans, drapers, tailors, national teachers, tram conductors and tram drivers, shop assistants, clerks and other people in receipt of comparatively low and small remuneration. On the other hand, some of the taxpayers concerned were wealthy, and very wealthy indeed. Hundreds of the people involved had already spent their income and could only pay the arrears, if they were collectable from them at all, by instalments spread over comparatively long periods. That was the position in which our predecessors determined that all the moneys properly due and collectable by the Revenue Commissioners, for the benefit of the Exchequer, were to be collected, no matter, I presume, from whom they were due or by whom they were owing.
I am rather sorry Deputy Cosgrave is not in his place, because he had an important part in formulating that policy. In that connection Deputy Cosgrave, who was then Minister for Finance, spoke in the Dáil on the 30th April, 1923, Official Report, Volume 3, column 98, as follows:—
"For 1920-21 there are 3,725 cases where we are owed under £100. For 1921-1922 there are 6,861 such cases. The tax covered by these is not less than a quarter of a million. As regards cases over £100, there are 200 in 1920-1921 and 423 for 1921-1922. The actual tax in this case is £115,000. In Dublin City alone the arrears due from employees, exclusive of workmen, is £365,000. Making allowance for deductions which may be claimed, the net sum is something like £300,000."
I should like the Dáil to note the amount due from employed persons in Dublin alone—tax, every penny piece of which has been collected already, and collected at the cost of great hardship in the case of the workers and employees from whom it was taken. That was collected by members of the Opposition when they were members of the Government, these Deputies who are now so vocal in regard to the wealthy defaulter to-day.
As I have said, the Government decided to collect these sums, and special powers were taken to enable the Revenue Commissioners to enforce payment. These powers were embodied in the Finance Act of 1923. Section 6 of that Act enabled the Revenue Commissioners to turn employers into income tax collectors, and compelled those employers to deduct from the wages or salary, payable to an employee, the latter's arrears of tax for past years. Section 7, sub-sections (2) to (13) of the same Act, conferred special and altogether exceptional powers of a drastic character on the under-sheriffs throughout the country for recovering arrears. There was not any question then of depriving a man of his legal rights! They simply made the assessment and the sheriffs collected when workers were involved, and when they were not people who could put their ill-gotten gains together in order to deprive the Revenue of what was due to it. Oh, no! When they were poor people who could not protect themselves, and who could not retain lawyers to obstruct the due operation of the law, then we had an Act, with special powers for under-sheriffs, passed through this Dáil without opposition from Deputy Lynch or Deputy Cosgrave or Deputy O'Sullivan. They are the people who brought it in and who launched the under-sheriffs on the small men—on the national school teachers, on the workers, the employees, the tram drivers of the City of Dublin—and gave them special powers to collect income tax which was owed in respect of the preceding four, five and six years.
What was the justification for these extraordinarily drastic powers? When I come to consider what was said in the House in regard to this policy in 1923, I feel like Mark Anthony when he wished that he were Brutus; for were I Deputy Cosgrave who sponsored these proposals and Deputy Cosgrave Minister for Finance, there were a Minister who would ruffle up our spirits and make us realise what our duty is to the honest taxpayers of this country! I am sure that the taxpayers, when they hear how Deputy Cosgrave loved them during the period when he was Minister for Finance, may be glad that it is I, and not Deputy Cosgrave, who am here at this moment.
To protect them?
I cannot plead the cause of the Revenue with all the eloquence that Deputy Cosgrave had at his command on that occasion, but I have here the record of his speech and this "poor, dumb mouth" will speak for me. I am quoting Volume III again, column 546, in which Deputy Cosgrave said:
"This Finance Bill is, in certain respects, much more exhaustive and far-reaching, in respect of certain particulars, than has been the practice here. A good deal of criticism of it has been printed. The Press has taken up the question of certain steps that are supposed to be taken in the Bill to get in income tax. It must be remembered it is only fair to those who are paying loyally and with a due sense of their civic responsibility, very considerable sums into the Exchequer in respect of income tax, that they have got some rights, and that it is due to them, as well as to the State, that every person properly chargeable to this particular tax should pay his quota. That is all that is contemplated under the provisions of this Act."
And that is all that is contemplated under this Resolution—that every person who is properly chargeable to this tax shall pay his quota. If he thinks he is not properly chargeable he has his remedy. We are merely making it quite clear to everybody that any person who was properly liable to excess profits duty between 4th of August, 1914, and 5th August, 1921, is still liable and has always been liable according to the practice of this State.
What is the meaning of Section 32 in the Act of 1926?
I will come to that, all in due course. In the meantime, the Deputy, who has now thrown in his lot with Deputy Cosgrave, ought to listen to what Deputy Cosgrave said in 1923. There was much more sense in what Deputy Cosgrave said on this particular measure on that date than in what he said to-day, and it would be wise if everybody would listen to the arguments—sound and valid arguments, I admit—that were then brought in to defend it.
Did the Minister read what he said on 5th June, 1930?
Precisely—and I am safeguarded in every way. I made it quite clear that we were not going to strain the law against the taxpayer; and we are not. We are making the law conform to what has been the universal practice. Deputy Cosgrave, on the occasion to which I have already referred, went on to say:
"For one reason or another, for some years past, certain people have evaded the payment of this tax. In one journal it has been mentioned that we were responsible for that. We have denied it."
Then Deputy Cosgrave went on in Columns 547-8 to say this:
"In any case, no matter who the individual was who owed money in this respect, he cannot be allowed to gain that advantage over his less fortunate brother who paid his way either since we took over the affairs of this country or who paid previously. There is no real injustice, but there is a good deal of interested criticism of these proposals."
Further on, the Deputy said:
"We are now faced with very heavy burdens. We have fairly big responsibilities for the present time, and will have for the future, and every citizen is expected to bear his share of that burden."
And then he went on:
"We are asking for nothing more than the means to utilise our present powers, and when the present means are defective to strengthen them, and to give us the opportunity of giving to the State what is due—‘rendering to Cæsar what is his.' That is not too much to ask, and that is all that we are asking for in this Bill."
In column 580, in answer to certain arguments advanced by Deputy Johnson with regard to a person who would be affected by the proposed income tax legislation, Deputy Cosgrave said:
"Why should he be allowed to escape? An unfortunate man with several children, living in a small house, paying more than his quota to the upkeep of the State is to be mulcted and made to pay more than his quota in tobacco or tea because the other man."
—that is the person who is properly liable to excess profits duty—
Then, finally, in order to make quite clear what the attitude of the Government was in regard to this whole question of excess profits duty, after the passing of the Act of 1923 a Government notice was issued and published in the Press on 2nd August, 1923, in the course of which the following words occur:
"Whatever may have been the reasons for default in the past there can now be no justification for retaining for private purposes moneys that legally belong to Saorstát Eireann. These moneys must be regarded as trust funds which the taxpayer was not entitled to hold in his possession even for a single day."
That is the foundation and that is the initiation of the policy which we are pursuing to-day. In accordance with those declarations made by Deputy Cosgrave, who was then Minister for Finance in 1923, the Revenue Commissioners proceeded to act, and except where recovery was found to be impossible the people who were liable to this tax, not only the well-to-do classes but the smaller taxpayers, particularly the smaller taxpayers, because they would be easier got at, had to pay. They could not put their money on deposit. They could not make concealed investments. The Revenue Commissioners knew what had been paid to them week after week during the period they were liable for this tax. They knew what they were receiving week after week that the tax was being paid, and they could not evade it. They could not employ lawyers to impede, by every obstacle that a skilled legal mind could devise, the action of the Revenue Commissioners in collecting the tax. National school teachers, clerks, small shopkeepers and shop assistants had to pay their arrears of income-tax, arrears which had accrued over two, three, four and five years. And, of course, in addition to that, they had to pay the income tax which was accruing year to year as well. In some cases it took men who were paying by monthly instalments over two years to get up-to-date with their income-tax payments. Even during the year which ended on 31st March, 1932, tax was still being collected which had been assessed in 1921-22, or earlier years. We were not responsible for the practice carried out in the year ending on 31st March, 1932. The Dáil had passed this Act, the Act of 1926 which was responsible.
That was the law.
If the Deputy will be patient for a moment and conceal his ignorance of the law I will let him know what the law was. Even during the year which ended on 31st March, 1932, tax was still being collected. The Revenue Commissioners estimate that during the ten years ending 31st March, 1932, the amount collected in respect of income-tax assessed in the years prior to 1922-23 was no less a sum than £5,400,000.
Now with regard to the excess profits duty, as the Dáil is aware, that was a duty levied on profits made by traders during the period commencing somewhat before the outbreak of the European War and ending about two years thereafter in cases in which such profits exceeded certain standards. The duty was charged by reference to the periods for which the traders made up their accounts and was limited to periods which ended after the 4th August, 1914, and before 5th August, 1921. Now the duty—this is a point that I am sorry Deputy Dillon and Deputy McGuire are not here to listen to—was not chargeable for any period subsequent to 5th August, 1921, but up to 30th September, 1926, returns could be demanded and assessments made in the ordinary way for all excess profits duty periods up to that date. What happened in 1926? It was decided that no further assessments should be made in certain cases, but the charge to excess profits duty was not repealed. It still remained. The making of the assessments was simply part of the machinery for the enforcement of the charge. The Dáil by the Act of 1926 suspended the operation of the machinery in regard to certain cases, but the charge to excess profits duty still remained. If any person was properly chargeable to excess profits duty in respect of the period between 4th August, 1914, and 5th August, 1921, he still remained liable, notwithstanding the Act of 1926. To get back to the history of the case——
Would the Minister read the section?
I would advise the Deputy to read it, and if he has any doubts in the matter let him go and consult those who were responsible for defending in this House the policy that we are carrying on to-day.
That was the law and do not be bustling about it.
In 1922-23 the British Commissioners of Inland Revenue carried on the administration of the inland revenue on an agency basis for the Saorstát Government. The gross receipts of excess profits duty collected for the benefit of the Saorstát Exchequer in that year amounted to £405,408. The gross receipts in the five following years ending on 31st March, 1928, amounted in the aggregate to £687,342. I have already pointed out that the Finance Act of 1926 provided that, except in certain undetermined cases, and in cases where it appeared to the Revenue Commissioners that there had been fraud or wilful neglect, no assessments to excess profits duty should be made after the 30th September, 1926. The Dáil merely provided that the assessments should not be made. That is all. It was open at any time to the Dáil, by a subsequent enactment, to provide that those assessments should be made and it carefully provided and maintained the machinery for making the assessments. It safeguarded itself. It is said that assessments should be made where there had been fraud or wilful neglect. We will leave that for a moment and we will consider now the action in recovering the unassessed duties by means of additional assessments and the penalty proceedings.
Up to about the end of the year 1927, the energies of the officials of the Revenue Commissioners were fully occupied with the making of the current income-tax assessments, year by year, and the clearing up of the huge mass of assessed arrears. Towards the end of 1927, the question of the unassessed arrears was taken in hand. Inspectors of taxes throughout the country resumed the investigation of cases in which they had reason to suspect that duties had not been assessed in full and a special staff was set up at Dublin Castle to supervise this work. It was set up, not in 1932 or 1933, but set up in 1927 by the Government of which Deputy Cosgrave was then head. This was a new departure; at least, it was a new activity. It was work which, if they had had the organisation at their disposal, the Revenue Commissioners would naturally have embarked upon in 1923, but they embarked upon it after the Act of 1926 had gone through the Dáil. They embarked upon it in 1927, the moment their hands were free and the necessary staff available.
Those were income tax assessments.
Would the Deputy please make up his mind to be quiet until the end? They were not income tax assessments. They were both excess profit duty assessments and income tax assessments and it was never denied that they were both. In fact, if there was any desire at all to meet the taxpayer displayed by our predecessors, it was in regard to income tax and not in regard to excess profits duty. They were careful in every statement they made here always to reserve to themselves the right to make any investigation they cared into the amount of excess profits duties for which a taxpayer might be liable. They did it, of course, in a roundabout way. Cumann na nGaedheal said: "We will allege fraud or wilful neglect." Now, what is fraud and what is wilful neglect? They said: "We will allege it the moment we suspect a man is liable for excess profits duty; we will say he is either a fraudulent taxpayer or a person guilty of wilful neglect, and we will have him served with an assessment." That is the policy which Deputy Cosgrave wished to start in 1927.
Of course, it followed inevitably from the policy which had been adopted regarding assessed arrears. If you had collected arrears from persons who had been assessed, you could not possibly allow people who owed the Exchequer the tax to go scot free merely because of the accidental circumstance that they had not been assessed, due to shortage of staff or due to some other reason during the significant years. As most of the taxpayers who had been dealt with up to 1926 were small people, the small fry, the cases which were easily dealt with, it was clearly impossible, as I said earlier, to let off the wealthy trader who, by one device or another, had succeeded in evading his liabilities and had invested the proceeds of such evasion in sound investment, after the State had maintained its right against the small taxpayers like National teachers and drapers assistants and compelled them to pay their taxes to the last farthing. From 1928 onwards—and this I think is something which must be borne in mind by Deputy Dillon and others who have criticised this proposal before the House—the House was never in any doubt as to what it meant by this section of the 1926 Act—never, for instance, indicated that it believed that a person who was properly chargeable to excess profits duty in respect of 1914 to 1921 was relieved of that charge by the Act of 1926 because every year from 1920 or 1929 onwards, the Budget Estimates, year by year, included large sums which it was expected to recover in respect of unassessed duties and, in fact, the actual collection was very large.
During the four years ended 31st March, 1932, 838 cases of taxpayers, who, in one way or another, had evaded adequate assessment at the proper time, were disposed of. These cases yielded, in income tax, sur-tax, corporation profits tax and excess profits duty, the huge sum of £1,663,000, an average of over £400,000 per year and an average of about £2,000 per person. That was—and, again, I should like to emphasise it—during the four years ending on 31st March, 1932. That was what was collected because the House was of opinion that, in the words of this Resolution, "the charge of excess profits duty effected by Part III of the Finance Act of 1915, and the Acts amending or extending that Act, was not repealed, prejudiced or affected by Section 32 of the Finance Act of 1926." If it had been repealed, prejudiced or affected, then that £1,663,000 was illegally and wrongfully collected but it was collected by Deputy Cosgrave's Government at a time when he was President of the Executive Council.
Are you going to prevent the courts expressing an opinion on it now?
You have got away with the swag and we are not going to make vicarious restitution. That is one thing, at any rate, and let us make up our minds about it. In any event, there is no doubt in the matter. If there were any doubt, it is the prerogative of the Executive to ask the Dáil to make its mind clear in this matter, either before or after the courts have given their decision— and before, for preference. A doubt does not exist, but if it does a much less objectionable course is now proposed than that which was followed here in the Finance Act of 1931 when, in Section 2 of that Act, after the court had given the decision, an attempt was made to nullify the judgment. That was a pretty example of real retrospective legislation. I should like to emphasise that there is nothing retrospective about this legislation. No decision has yet been given. We have time to make quite clear what the intention of the Oireachtas is and has always been with regard to excess profits duty. The interpretation which we have adopted having been perfectly consistent with the practice which has been followed during the past ten years, we are justified, before the courts have given any decision at all, where doubt has arisen, to clarify the statute and remove the doubt. That is done every day. When a Bill is going through the Dáil, it is amended on Committee Stage. If the amendments introduced on Committee Stage do not give full effect to the intention of the Dáil, the Bill is amended on Report. Even when Bills have become Acts, we have introduced Bills, and our predecessors have introduced Bills, to amend them so as to make the intention of the legislature clear and "to remove doubts." Those who talk about depriving citizens of their legal right had better recall what they did in 1931 when, in the Finance Act of that year, they introduced Section 2 which was designed to nullify a decision of their own Circuit Court. That section contained the following:
"Sub-section (1) of Section 8 of the Finance Act, 1925 (No. 28 of 1925), shall be construed and have effect and be deemed always to have had effect as if after the figures ‘1918' now contained therein there were inserted the words and figures ‘or under Rule 18 of the General Rules applicable to Schedules A, B, C, D and E of the said Act'."
They did that in 1931 after the courts, as I have said, had already come to a decision.
That is the history of this matter up to 31st May, 1932. When this Government took office a little over 12 months ago, we found that this principle of collecting taxes for the years prior to 1922-23 had been laid down by our predecessors. We found that this policy had been steadily and consistently followed for nine years. We had, for the first time, a clear view of everything that had happened. Whatever views we had held previously, it became obvious to us that, if justice was to be done to the general body of taxpayers, there were only two courses open to us; one was to reverse the policy ab initio and repay all the millions collected in respect of these taxes during the previous nine years. Obviously, this course was impracticable. The other course was to adopt the policy of our predecessors and to carry it out to its logical conclusion. We decided on the latter course. Apart from the defence which I have made, I am prepared to defend that course on the grounds of justice and equity. Excess profits were made out of our people by profiteers and we are here to see that the people get the benefit and advantage of them now.
We found that the Revenue Commissioners, in order to carry out the policy of the Government, were compelled to rely to an undue extent on their power to determine the existence of "fraud or wilful neglect." They had sometimes to establish to their own satisfaction that there was fraud or wilful neglect in cases where they had reliable information, but not clear legal proof, that fraud existed. Speaking when I was in Opposition—this statement is quite consistent with our policy to-day—I said:
"It may be that, for the purposes of the Minister, the powers given by the law are insufficient but, if so, his remedy is to amend the law and not to break it—not, in any event, to strain it."
The first thing we did was to give the Revenue Commissioners the powers we felt it was essential they should have if they were to do justice as between one set of taxpayers and another—the taxpayers who had paid the tax either willingly or under compulsion, and those who should have paid the tax but had succeeded in evading it. Although they did rely on the proviso regarding fraud or wilful neglect, it was obvious that there were many cases in which the Revenue Commissioners would not act because they took a somewhat stringent view of their responsibilities under this section. They refused to act in any case in which some reliable information had not been conveyed to them or had not come into their possession. Very often, that information came into their possession in an accidental way. Very often, it came into their possession when the person who had succeeded in evading the tax died. One thing was clear—that there was quite a large body of people properly assessable to this tax who were successfully evading it because, by a mere hazard, the Revenue Commissioners did not get sufficient information to enable them to determine to their own satisfaction that there had been fraud or wilful neglect. When an investigation was started, the proofs, as a general rule, were speedily forthcoming. We said that we were not going to do that. That might be held to be straining the law. We said that the only way justice could be done as between one class of taxpayers and another was to give to the Revenue Commissioners power to make an assessment in any case in which they thought an assessment might properly be made—in other words, to release all the machinery, not to reimpose the charge, because the charge had not been repealed by the Act of 1926. We decided to release the machinery which had been partially held up by the Act of 1926, to allow the machinery of assessment which, under the Act of 1926 could only operate in the case of those taxpayers who might appear to have been guilty of fraud or wilful neglect, to operate in the case of every person.
It is quite clear, if it is allowed to operate in the case of every person, that only people who are going to be made liable now for excess profits—the only people who will have anything to fear, if the Revenue Commissioners have full discretion to make the assessments they think necessary—are those who were, in fact, guilty of fraud or wilful neglect. There is nobody else. The taxpayers who have not paid excess profits duty up to this date are people who are either guilty of fraud or have wilfully neglected to furnish the necessary returns, so that there is no injustice being done any person, and there is no attempt to deprive any person of his legal rights, and certainly nothing so drastic is being done as was done by Cumann na nGaedheal Government, 1931.
We could not do it.
That is a cheer from the ranks of Tuscany. When we decided to amend the Act we decided also to make a concession in regard to those who had not put themselves right with the Revenue Commissioners in this regard. We felt that it would be desirable to wind up the whole of this excess profits duty at an early date, and we offered a concession to those who had succeeded in evading the tax; a concession which we had a great deal of hesitation in offering, and which many people thought was unfair to taxpayers who had already met their liabilities in full. But we felt it was in the general interest of the taxpayers, and of the Exchequer, that something should be done to clear up this whole position expeditiously, and we offered the concession which was embodied in the Finance Act of 1932. Upwards of 1,000 taxpayers have already intimated their intention to take advantage of that and, as a corollary, we did the other thing, we gave the Revenue Commissioners power to make assessments in any cases in which they thought, on the information at their disposal, they were justified in making assessments without having to determine that there had been fraud or wilful neglect.
As to the legislation which we passed in 1932, I am advised that that legislation is fully effective. But as I have already stated, we find a number of people, every one of whom has been already assessed—because there is information that they are properly chargeable with excess profits duty— banding themselves together, pooling, as they have publicly stated, all their resources, and embarking on expensive and vexatious litigation, in order to do what they can to defer the collection of excess profits duty until the Cumann na nGaedheal Government is back in office, and rewards its friends by granting remission at the cost of the general body of taxpayers.
That action is now being launched by taxpayers who are being assessed under the Act of 1932, and who are merely anxious to impede the collection of the revenue in their particular cases in the hope that Cumann na nGaedheal will be restored to office. It is a vain hope, but a drowning man clutches at a straw.
The Minister sees the writing on the wall.
When Cumann na nGaedheal is returned to office their liability for excess profits duty will be wiped out, and concessions will be given to Cumann na nGaedheal's friends. We cannot afford to let vexatious litigation of that sort impede the collection of the revenue.
On a point of order. Is it proper for the Minister to refer to an action listed before the courts as "vexatious litigation."
Of course it is.
I do not think the Minister has said anything that would be likely to prejudice the court.
"Vexatious litigation." What is the meaning of that?
"Vexatious litigation." I do not say it is intended, but surely if anything said in this House could influence a court a statement of that kind would influence the court.
I hope a statement of that sort will be made in court if this action ever comes to trial.
I ask for a ruling on the point of order. May I suggest that the Minister has admitted that people have the right to go before the court. Now I understand that he describes such litigation as vexatious, and that he will see they will not go before the court.
That is an argument.
I appealed to the Chair on the one point.
I am afraid I cannot rule that the Minister's remarks are likely to prejudice any cases before the courts. Possibly it would be better not to refer to them.
I must refer to them, because these people have banded themselves into an organisation. They have held meetings, published pronouncements in the Press, and generally endeavoured every way they could to prejudice the trial of the action, by commenting on its merits. I am entitled to say, in reply, that litigation that they propose to embark on is purely vexatious, and that, on the face of their own statements, it is designed merely to defer collection of the revenue until such time as another Government comes in, which will not collect.
No one has a right to say that litigation before the courts is vexatious litigation, until the judges have declared on it. I think it is an outrage to do so. It is certainly contempt of court.
I would like the Deputy to point out how it is likely to prejudice the decision of the court.
We are told it is vexatious litigation when it is pending. Does not that influence the court, if a court could be influenced by a Minister? Undoubtedly it does.
I cannot see that the qualification of the words used "vexatious litigation" is in any way likely to influence the courts or the decision. I do not see how it is likely to influence the decision.
Are they not words which imply that the litigation has no substance behind it?
I would not think it has that meaning.
It has nothing else.
In any event if I were so tender, or so concerned about the decision of the court, as Deputy McMenamin, I should certainly not reflect on the court as he did, when he stated that it would be influenced by the Minister.
He said until the court——
That is what was intended and what is behind the interruptions we heard from Deputy O'Sullivan and from Deputy McMenamin that the court is going to be influenced by anything said in this House in the due and proper interpretation of the law.
May I suggest that the Minister is replying to the point of order by arguing that nothing good can be said for the case before the court, and that his own argument is sound. Deputy McMenamin and myself have made it clear that the judges would not be influenced. The point is whether independently of the judges present being capable of being influenced, the words in themselves are calculated to have that meaning or not.
The Chair does not presume to be a judge of sound or unsound argument, but it cannot allow the Minister to discuss a ruling on a point of order, and it cannot allow him to read into interruptions what he has just said. The interruptions were quite justifiable.
On the point of order, I am rather inclined to agree that in this particular case the use of the word "vexatious" could have no ill effect; but it might set an exceedingly bad precedent. I suggest that no opinion should be expressed in regard to legal proceedings. That might be done on other occasions and it might have a very hurtful effect indeed.
When I was interrupted I think I was saying that we were not going to allow the mere suggestion of a doubt to hinder the collection of revenue. We propose this year to introduce further legislation founded on this Resolution, so as to place the whole position regarding excess profits duty beyond a doubt. I say we are quite entitled to do that. We are entitled to make clear to the judges, and anybody else, what the mind of the Dáil is in regard to this matter. We are not, as our predecessors did, trying to nullify the judgment of the court by subsequent legislation. I admit that would be open to challenge and to very serious criticism. We are not doing that. We are making it clear that it has always been the intention of the Dáil that the Revenue Commissioners should operate to collect whatever excess profits duty might be properly due, or whatever other duty might be properly due in respect of the years prior to 1922-23, in view of the fact that the Dáil has assumed liability for repaying excess profits duty and duties of every sort which were not properly collected and not properly assessed prior to 1921-22.
I have given particulars of the collection, up to 31st March, 1932, of income tax and excess profits duty which escaped assessment. During the year 1932-33 a further 283 cases were settled, the amount collected being £226,000 for income tax and sur-tax, and £116,000 for excess profits duty. These figures would have been very much larger but for the fact that the revenue staff were heavily pressed and there was an equal pressure on accountants and others acting for the taxpayers in connection with these settlements. The position at the beginning of the current year was that there were about 1,400 cases remaining to be disposed of, and it is estimated that these will yield on an average about £1,000 per case. The great majority of the 1,400 taxpayers concerned have already intimated their intention to adopt the concession outlined in my Budget speech of last year.
The opposition to the payment of taxes comes, it can quite clearly be seen, from a comparatively small number of die-hards who up to now have persistently made use of every means open to them to evade the liabilities which have been met by the enormous majority of taxpayers of this country, and who are determined, if they can, to transfer the burden which they ought to bear to the shoulders of their fellow citizens. I would like any person really concerned with the position of these people to bear in mind that if they get away with it they will succeed in making those who have met their just obligations to the State shoulder the burden of those who have succeeded in escaping by defrauding and cheating the State. I am hoping to get this year something like £450,000 from these 1,400 cases by way of income tax and excess profits duty, and approximately the same amount in the next two years also. This sum of £450,000 must be got from somewhere. I suppose if Deputy McGilligan were here——
He would read the manifesto.
Precisely: He would say that we should get it by economies.
The £2,000,000 you boasted about. Why not?
Deputy McGilligan would say that we should get it by economies. That is merely shirking the point at issue, because even if we did get the £2,000,000 by economy we would still have £20,000,000 more to raise.
The Minister means £30,000,000.
We would still have £20,000,000 more to raise by taxation in this current year and the question would still remain as to whether the £450,000 should be taken from the people by whom it is properly due and who have evaded the tax—most of them well-to-do citizens—or whether we are going to relieve this small section of their proper liability in this matter and increase the taxation on the remainder of the community. If we do not get the £450,000 from this little handful of back duty evaders, we are going to have to get it from the farmers and the workers.
What about the Suspense Account?
The Deputy's intelligence is in suspense. There is no Suspense Account.
Is it dried up?
We are going to get it from Deputy Dillon's constituents and Deputy McMenamin's constituents in Donegal, Deputy Bennett's constituents in Limerick, the constituents of Deputy John Marcus O'Sullivan and Deputy Fionán Lynch in Kerry, and from the farmers.
The Minister cannot take water from stones.
It will be obtained either by an extra tax on sugar or tea, a tax on tobacco or an additional tax on some necessity of life. That is the only way we can get it. We must either get it from those who owe it or else let them go free and get it from the rest of the community by a tax on some commodity essential to them. That, of course, is unthinkable and, in view of the history of these cases, I think it must be conceded by everybody that those who have succeeded in evading liabilities over the past 14 years should now be made face their responsibilities and shoulder the burden that properly belongs to them.
May I ask the Minister one question? It is in reference to a statement he has made about an Act passed by us. That Act, he said, nullified a decision of the courts in 1931. Will the Minister say if we deprived the actual litigant of the verdict he received from the judge and did the litigant have to bear his own costs?
Oh! of course what happened in that case was——
Now will the Minister answer the question I put?
You gave the litigant his costs but you deprived everyone else of the benefit of the decision.
Did the person who got the verdict of the court maintain that verdict and was it not upheld? You are now interfering with the courts.
We are not interfering with the courts. There was no verdict given. The case was being brought to the High Court. The Government was bringing it. Instead however of doing that they brought in a Bill anticipating the verdict of the High Court in the matter.
I would just like to ask the Minister a question. I have been much influenced with regard to what the Minister said about retrospective legislation. I was not so impressed with reference to the effects of this section on the taxpayers of Donegal, Mayo and so on. I wanted to ask the Minister if he had dealt with Resolution 15?
Aiken, Frank.Bartley, Gerald.Beegan, Patrick.Boland, Gerald.Bourke, Daniel.Brady, Seán.Breathnach, Cormac.Breen, Daniel.Briscoe, Robert.Browne, William Frazer.Clery, Mícheál.Concannon, Helena.Corkery, Daniel.Corry, Martin John.Crowley, Fred. Hugh.Crowley, Timothy.Daly, Denis.Davin, William.Derrig, Thomas.Doherty, Hugh.Dowdall, Thomas P.Flynn, John.Flynn, Stephen.Fogarty, Andrew.Gibbons, Seán.Goulding, John.Hales, Thomas.Harris, Thomas.Houlihan, Patrick.Jordan, Stephen.Kehoe, Patrick.Kelly, James Patrick.Kelly, Thomas.Kennedy, Michael Joseph.Kent, William Rice.
Kilroy, Michael.Kissane, Eamonn.Lemass, Seán F.Little, Patrick John.Lynch, James B.MacDermot, Frank.McEllistrim, Thomas.MacEntee, Seán.Maguire, Ben.Maguire, Conor Alexander.Moore, Séamus.Murphy, Patrick Stephen.Murphy, Timothy Joseph.Norton, William.O'Briain, Donnchadh.O'Connor, Batt.O'Dowd, Patrick.O'Grady, Seán.O'Kelly, Seán Thomas.O'Reilly, Matthew.Pattison, James P.Pearse, Margaret Mary.Rice, Edward.Rogers, Patrick James.Ruttledge, Patrick Joseph.Ryan, James.Ryan, Martin.Ryan, Robert.Sheridan, Michael.Smith, Patrick.Traynor, Oscar.Victory, James.Walsh, Richard.Ward, Francis C. (Dr.).
Alton, Ernest Henry.Anthony, Richard.Beckett, James Walter.Belton, Patrick.Bennett, George Cecil. Davitt, Robert Emmet.Desmond, William.Dockrell, Henry Morgan.Doyle, Peadar S.Esmonde, Osmond Grattan.Fitzgerald-Kenney, James.Good, John.Lynch, Finian.MacEoin, Seán.McGilligan, Patrick.McGuire, James Ivan.McMenamin, Daniel.Minch, Sydney B.
Broderick, William Joseph.Byrne, Alfred.Cosgrave, William T.Costello, John Aloysius.Craig, Sir James. Morrisroe, James.Morrissey, Daniel.Mulcahy, Richard.O'Connor, Batt.O'Leary, Daniel.O'Mahony, The.O'Sullivan, Gearoid.O'Sullivan, John Marcus.Redmond, Bridget Mary.Reidy, James.Rice, Vincent.Roddy, Martin.Thrift, William Edward.
I move: "That the Dáil agree with the Committee in Resolution No. 15." This Resolution is designed to put beyond any doubt a practice which has existed since excess profits duty was established and which has not been challenged by anyone since March, 1922. It has already been decided that these words "for the time being" mean at the time of making the assessment.
What about the second part of the Resolution?
That is merely the logical consequence of the decision which was given in March, 1922, that the assessment was properly made on the person for the time being owning the business. Excess profits duty, of course, is made in respect of a business and on a business in just the same way as property tax may be assessed on property, and it merely puts the onus on the person taking over the business in respect to which there is an excess profits duty liability; exactly the same onus as would be on him if he was taking over real property in respect of which there was an outstanding property tax. Paragraph (2) is merely a provision which will enable the Revenue Commissioners to deal with cases of hardship. It is designed to enable them in suitable cases to assess the person who was the owner of the trade or business at the time the excess profits were made.
I do not see the analogy that the Minister draws with a person buying a business in respect of which a claim remains in the Revenue Commission for excess profits which should have been paid, and was not, 16 years ago. If I buy a piece of real property upon which certain taxes are leviable, I can readily ascertain by reference to statutes what taxes were leviable, and I can demand that the person who conveys the property to me shall produce receipts to show me that the tax has been satisfied. Suppose, however, that I proceed to buy a business from an individual who operated that business between 1915 and 1921, and it is of a kind in which no satisfactory accounts were kept at that time, I have no means of ascertaining whether the man was liable to excess profits duty or not. There are no means available to me whereby I can find out. I pay the man the fair value of his property, having made all requisitions on title that I can make; having insisted that he will produce receipts for all the taxes or State liabilities that I can know he is liable for. Some years after I acquire the property, the Revenue Commissioners come along, if I understand the Resolution correctly, and say: "Because your predecessor in title in this business failed to pay what was due in respect of excess profits, we now propose to assess you," and the Commissioners can then assess me for the default of my predecessor in title and collect the money from me. I am not quite clear whether I would want to become the successor in title to the defaulting taxpayer before 1921. Suppose I bought a business with a liability of this kind attached to it in 1927, would I be liable for the tax-payer's default?
Legally yes, but in that connection the Deputy must advert to sub-section (2) of the resolution.
You might assess the other person, but you have the remedy against me?
We have. We always had that remedy.
I am discussing the thing really on its merits. I do not know what the practice or procedure has been in the past. I am not very much influenced by whether that remedy has been in existence heretofore or not. It seems manifest to me, however, that the only obligation we ought to put on any citizen is to take every reasonable precaution to avoid collusion in any fraud upon the Revenue Commissioners. I think it must be manifest to the Minister that, in the matter of precautions, if you acquire a business, and this Financial Resolution becomes an Act of Parliament, you may find yourself liable. I consider that that is not equitable or fair. For that reason I cannot support the Minister in carrying this Financial Resolution into effect. I think it places an unfair obligation on the citizens of the State.
I take it, sir, that the decision which is being given statutory effect in this resolution is the Wankie Colliery case. I think the Minister will know that in that particular case there was a very considerable divergence of judicial views on the meaning of the section. If he will look at the report of the case he will find that there was a very considerable divergence of views in England, in the House of Lords and, I think, in the Court of Appeal, on the question of the liability of the successor to the business. It is not at all clear that the court in this country would have followed the decision in the Wankie Colliery case. It is a remarkable fact that although that case has been decided for a number of years a case has never been decided by these courts, except towards the end of 1931 there was a case which raised the point. There was actually no authoritative decision on it so far as I am aware. There is an aspect of the matter to which I would like to draw the Minister's attention. He has told us that a person who bought a business in 1927 would be liable for a default made in 1916, even if there had been a number of intervening changes of ownership, so that if a person was liable in 1916 to excess profits duty, and had sold his business to a person who had then sold it to another person, who sold it to still another person, the last person in possession of the business would, under this resolution, be legally liable for excess profits duty due by the original owner of the business. Further, suppose in 1916 an assessment had been made on the owner of a business for excess profits duty, and the Revenue Commissioners had accepted his statement of accounts, had come to an agreement with him as to the amount of his assessment, and had given him his discharge, and he had subsequently sold his business to somebody else, the person to whom he had sold that business and who now owns it would be liable to have that assessment ripped open at the present moment under the provisions of this resolution. That is a very serious state of affairs.
Deputy Dillon pointed out that when property is being bought the person who advises the purchaser raises requisitions of title, and by making the necessary enquiries can ascertain what are the liabilities which attach to the particular piece of property, and see that no unascertained liabilities are transferred to him. Under this particular provision it is now made the law of this country that a person who bona fide purchased a business in 1921, before the Wankie Colliery decision was given—or whenever that decision was originally given—without any idea that he would be liable to the excess profits duty that may be owing or due by the owner of the business, now finds himself after a number of years liable to be assessed by the Revenue Commissioners. It seems to me that that will be liable to work a very great injustice and hardship.
There is a point I mentioned earlier, that so far as this particular resolution is concerned it deals with more than the Acts of the Oireachtas, unless we take it that the Constitution in adopting the Acts that had been then in force made them Acts of the Oireachtas. This Act was passed in the British Parliament in 1915. There is apparently a question of doubt in connection with the use of the words "for the time being", and we strengthen the claim in the year 1933 in respect of any taxes which the Government wishes to acquire by putting in words that were not in the original Act. In so far as that is imposing a tax on profits that were earned within the last 18 years it is a change in the law, and with that change in the law all the rest stated by Deputy Costello and Deputy Dillon follows in much stronger measure than if this alteration were not made. If each and every one of these assessments made in the meantime can be opened, where is the end going to be with regard to this? The Minister mentioned this evening that this was following the practice that had been adopted over ten years. That is not a fair statement of the case, and the Minister ought to know it. In the first place, the first Government of this State entered by agreement into possession of the right to collect those arrears, and it also entered into the liabilities which the British Government would have been called upon to discharge, and which we had to discharge—something like, I think, half or three-quarters of a million pounds that had to be paid back to people who had been over-assessed or something else in that way.
The Act of 1926, which we have just disposed of, put an end both to the assessments and the repayments, except in regard to the undetermined cases and cases where there had been fraud or wilful neglect. This certainly was not the intention of the Legislature at the time and it is not the intention of the Legislature at the time we have to consider; it is what they did, and what we have done. The law as we have known it is now being altered, and it opens up a whole number of cases that have been closed and determined. Business people really have a right to know when those cases will be finally closed. It is rather a pity that those three sections were not discussed at the one time, because they are all inter-related, and are part and parcel of the whole scheme. The scheme is being strengthened now in a way in which it has not been strengthened in the last ten years. People are being made liable now for duties to which they were not liable during that period.
An Ceann Comhairle resumed the Chair.
Might I have an opportunity of mentioning one point which I overlooked when speaking?
A very serious aspect of this particular tax assessment arises from the fact that, under the Excess Profits Duties Acts, when an assessment is made by the Revenue Commissioners the taxpayer before he can be heard on appeal against that assessment must pay within two months the amount of the assessment raised on him by the Revenue Commissioners. The Revenue Commissioners say to him: "We assess you for £20,000 excess profits duty. You must pay that £20,000 within two months. After you have paid us that £20,000 we will listen to you and see whether you really are liable for that amount or not." Under this particular resolution a person may find himself in the position that he has purchased a business not knowing that there is any liability for excess profits duty, and the Revenue Commissioners may come down on him and say: "We assess you for £20,000, which you must pay within two months. When you have paid it we will discuss whether you are liable or not." That is a very serious aspect of this matter.
The Minister to conclude.
I think possibly I ought to deal first with the last point which Deputy Costello has made. It is quite true that a person who was assessed for excess profits duty must pay within two months, but he has the right of appeal before he pays.
I beg your pardon. I am advised that the position is that he may appeal, and if his appeal is heard and decided in his favour before two months he does not have to pay. If the appeal is not heard before two months elapse, collection of the assessment is never enforced, so that he is in the same position.
Legally it may be enforced.
While the law does give the Revenue Commissioners power to collect the duty if the appeal has not been heard and determined within two months of the date of assessment, in fact the Revenue Commissioners never do collect the duty in that way when an appeal is pending.
On the question that is involved here, for the last ten years since the Wankie case was decided in the House of Lords, the practice invariably has been to make the assessment on the owner of the business. Section 26 makes it quite clear that the person to be assessed is the person who has been owner of a trade or business liable to excess profits duty which has not been assessed or insufficiently assessed. In any case the business is liable to excess profits and the position always has been that the assessment was made on the person who was owner of the business at the time of the assessment. That is in accordance with the Wankie decision. Deputy Costello has talked of the great wealth of legal opinion that went to form that decision and has said that there was a good deal of difference of opinion——
Of judicial opinion.
What is the position? That that decision has never been challenged in these courts, that in view of the difference of opinion, in view of all the legal light which was shed on that decision, it should remain unchallenged in these courts for over ten years. I suggest that the reason it remained unchallenged, notwithstanding the fact that there were people with considerable resources involved in these cases is because everybody has made up his mind that the decision was a sound one and that the law here in fact is as that decision lays it down to be. That is that the person who is properly assessable for excess profits duty is the person who owns the business at the time at which the assessment is made.
Can the Minister say whether a person can recover costs against the Revenue Commissioners?
Yes, if the Revenue Commissioners are beaten in court.
They are never beaten in court.
It has happened before now. The position, therefore, is that we are only clarifying the law and making it quite clear that the judicial decision given in respect of the case in which proceedings were initiated in 1920, the decision given in March, 1922, before we took over the Revenue Service, has the force of law here. That is what the Resolution purports to do. It also goes a little further. It proposes to give relief in cases such as Deputy Dillon has in mind, where a person takes over a business quite in good faith, not having the benefit of good advice and not being aware of the legal position. In that case the Revenue Commissioners, under the second part of the section, have the power to make an assessment on the original owner who owned the business at the time the profits accrued.
Does the Minister undertake that the Revenue Commissioners will do that? I am thinking of a case where they might discover the original owner of a business was no mark. I would be rather afraid that then they would not allow their sense of justice to prevent their squeezing money out of some bona fide purchaser of the business.
Of course, I cannot bind the Revenue Commissioners. I want to make it quite clear that I have never tried to bind them or to influence them in any way to prevent their interpreting the law as they find it. Anything I might say either in this House or elsewhere would not, I hope, influence them later in carrying out what is their duty under the law. At the same time I do not think the case is quite as hard as Deputy Dillon has represented it to be. It seems to me that if the House passes the Resolution and makes the legal position clear, it will be open to any person who is going to purchase a business, a business which was in existence in the years 1914 to 1921, to ask the person who was owner of that to go to the Revenue Commissioners and bring from them some sort of proof or documentary evidence that in their opinion the business in not chargeable with excess profits duty at this date. That can be quite easily done. A man purchasing a business will no doubt employ just as skilled a lawyer as he would to inquire into the title when he is purchasing a house, and no lawyer will take possession until he has a certificate that there is no liability for excess profits.
I do not think the Revenue Commissioners would give such a certificate. I should be surprised if they did.
It has been suggested to me that under Resolution No. 14 it is possible to reopen a case in which a settlement was made 15 years ago. It is possible to allege there has been a mistake, to reopen the case and make a fresh assessment.
Apart from the effect of Resolution No. 14 that has always existed.
Exactly. Therefore there is no security in getting a certificate.
In that connection I should like to make this point clear, that one of the difficulties in regard to the original position was that very often where the Revenue Commissioners had suspected there was fraud, they felt themselves precluded from making an assessment unless they had some tangible evidence that fraud existed. In any of the cases covered by Resolution No. 14 or even by the original section of the 1926 Act, where evidence comes into their possession that fraud has been actually perpetrated on the Exchequer, they will reopen these cases. As I said, I should like to make it quite clear that prior to 1932 the Commissioners acted strictly within the law in every case. In fact one of the difficulties was, as I have said, that where statements were made to them without tangible evidence they would not proceed to make an assessment. At any rate it seems to me that was an unsatisfactory position, and that is one of the reasons why I want to modify it. To get back, I was saying that it was open to any person purchasing a business to ask the vendor to interview the Revenue Commissioners and to come back with some satisfactory assurance from them that the business would not be liable to excess profits duty. If the purchaser in that case gets such an assurance from the Revenue Commissioners, then I take it the Revenue Commissioners, in view of what is contained in Part II of the Resolution would not, if they discovered fraud subsequently, proceed against him where he was actully the bona fide purchaser——
They have the right to do it.
They have had always that right. They had always that right since 1914.
It was the Wankie case gave them that right.
The Wankie case did not give that right. The Wankie Colliery case only decided that right when the exercise of the right had been challenged, but in fact the Act had given them the right.
It was the decision in the Wankie Colliery case that defined the right and there is good reason to suppose that the Wankie Colliery case is wrong, and that they never had that right.
If judges vary in their judgment, in the lower courts, we could always say there is judicial opinion in support of an erroneous view of the law. But the decision that existed between 1920 and 1922 was a House of Lords decision. It was not merely a matter of different judicial opinion, it was a decision of the House of Lords and that is the law.
It is not the law here.
It is the interpretation of the law which has never been challenged here, and the decision and that interpretation of the law we wish to put beyond challenge here. As we acted in accordance with that interpretation since 1923, we would be simply stultifying ourselves if we did anything else, and we would be stultifying the Revenue Commissioners and the Oireachtas. There is no question left; no one can criticise the matter and it has no retrospective aspect whatever. The decision has never been challenged, and now we are putting it beyond challenge. I think where there was a bona fide purchase the person need have no fear in his mind when the Revenue Commissioners give him any sort of clearance that the subsequent owner of the property would be put to any trouble.
Do the Revenue Commissioners give such an assurance?
They would be quite prepared to do so in a suitable case if they got proper evidence. If there was no proper evidence forthcoming, it would be evidence to the purchaser that there must be some liability attaching to the property, so that he might arrange a purchase price that would indemnify him against loss in the contingency that that slight liability should become probable. This provision is as much in the interest of those people who buy property in good faith as anyone else. One of the things we wish to guard against is the transfer of property with the idea of defeating the revenue. That is the reason why it is necessary to make the position unchallengeable. We do know the extraordinary extent to which it is possible to evade the duty. In view of the concession given to people who paid taxes and who were liable to excess profit duties last year, and in view of the statement that that was to be accompanied by the strengthening of the law if necessary, and with the decision of the House Lords prevailing for ten years, and the fact that the revenue practice has always been in accordance with it, I think the House would stultify itself if it did not adopt that course.
- Aiken, Frank.
- Bartley, Gerald.
- Beegan, Patrick.
- Boland, Gerald.
- Bourke, Daniel.
- Brady, Seán.
- Breathnach, Cormac.
- Breen, Daniel.
- Briscoe, Robert.
- Browne, William Frazer.
- Clery, Mícheál.
- Concannon, Helena.
- Corkery, Daniel.
- Corry, Martin John.
- Crowley, Fred. Hugh.
- Crowley, Timothy.
- Daly, Denis.
- Derrig, Thomas.
- Doherty, Hugh.
- Dowdall, Thomas P.
- Flynn, John.
- Flynn, Stephen.
- Fogarty, Andrew.
- Geoghegan, James.
- O'Briain, Donnchadh.
- O'Dowd, Patrick.
- O'Grady, Seán.
- O'Kelly, Seán Thomas.
- O'Reilly, Matthew.
- Pattison, James P.
- Pearse, Margaret Mary.
- Rice, Edward.
- Ruttledge, Patrick Joseph.
- Gibbons, Seán.
- Goulding, John.
- Hales, Thomas.
- Harris, Thomas.
- Hogan, Patrick (Clare).
- Houlihan, Patrick.
- Jordan, Stephen.
- Kehoe, Patrick.
- Kelly, James Patrick.
- Kelly, Thomas.
- Kennedy, Michael Joseph.
- Kilroy, Michael.
- Kissane, Eamonn.
- Lemass, Seán F.
- Little, Patrick John.
- Lynch, James B.
- McEllistrim, Thomas.
- MacEntee, Seán.
- Maguire, Ben.
- Maguire, Conor Alexander.
- Moore, Séamus.
- Murphy, Patrick Stephen.
- Murphy, Timothy Joseph.
- Norton, William.
- Ryan, James.
- Ryan, Martin.
- Ryan, Robert.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
- Victory, James.
- Walsh, Richard.
- Ward, Francis C. (Dr.).
- Alton, Ernest Henry.
- Anthony, Richard.
- Beckett, James Walter.
- Belton, Patrick.
- Bennett, George Cecil.
- Broderick, William Joseph.
- Byrne, Alfred.
- Cosgrave, William T.
- Costello, John Aloysius.
- Craig, Sir James.
- Davitt, Robert Emmet.
- Desmond, William.
- Dillon, James M.
- Dockrell, Henry Morgan.
- Doyle, Peadar S.
- Esmonde, Osmond Grattan.
- Fagan, Charles.
- Fitzgerald, Desmond.
- Fitzgerald-Kenney, James.
- Good, John.
- Lynch, Finian.
- MacEoin, Seán.
- McGilligan, Patrick.
- McGovern, Patrick.
- McGuire, James Ivan.
- Minch, Sydney B.
- Morrisroe, James.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, James Edward.
- O'Connor, Batt.
- O'Higgins, Thomas Francis.
- O'Leary, Daniel.
- O'Mahony, The.
- O'Sullivan, Gearoid.
- O'Sullivan, John Marcus.
- Redmond, Bridget Mary.
- Reidy, James.
- Rice, Vincent.
- Roddy, Martin.
- Thrift, William Edward.
I move: "That the Dáil agree with the Committee in Financial Resolution No. 16."
The purpose of this Resolution is to enable excess profits duty to be assessed on executors of a deceased person who was liable to such duty. This is a logical consequence of the decision to collect excess profits duty in all cases where there is an unsatisfied liability. If we are going to collect it from people who are alive there is no reason why we should not collect it from the estates of deceased persons. There is no reason, at any rate, why the heirs of persons who have defrauded the State during their lives should retain the proceeds. The first paragraph of this Resolution provides for the making of assessments on executors accordingly. On the other hand, it would not be just that an undue impediment should be placed in the way of executors winding up the estate, and under the second paragraph assessments to be made on executors must be made within a period of two years from the date on which they obtained probate. In this connection, it is well to remind the House that in the case of income tax, assessments may be made on the executors of a deceased person within three years after the death occurred. In cases in which a corrective affidavit is lodged, however, it is provided that the two years shall run from the date of the lodgment of such affidavit. This is necessary in order to protect the revenue in cases in which the whole of the assets of the deceased were not disclosed in the original affidavit.
This Resolution has no retrospective effect so far as executors are concerned, for paragraph 3 of the Resolution provides that the executor of a deceased person who died before the 11th day of May, 1933, shall not be charged with or assessable to excess profits duty by virtue of this Resolution if such executor or administrator has fully administered the estate and distributed the assets of such deceased person before the said 11th day of May, 1933. In those cases no assessment can be made.
The fourth paragraph of the Resolution enables executors to apply to the Revenue Commissioners for a certificate to the effect that there is no outstanding liability with regard to excess profits duty, and the issue of such a certificate will constitute a bar to any subsequent assessment save, as is provided in the fifth paragraph, in cases of fraud or failure to disclose material facts.
Arising out of this, I should like to know from the Minister is it quite clear, on the wording of this Resolution, that the liability of the executor or administrator to assessment for excess profits duty is limited to his capacity as executor or administrator, and only goes to the extent of the assets which come to his hands as personal representative of his deceased testate or intestate? It would look, from a cursory reading of the Resolution, that it is capable of bearing the interpretation that an executor will be liable and liable not only in respect of the assets that come to his hands. I would like to know if it is quite clear that, in the recovery of this excess profits duty, the only remedy available to the Revenue Commissioners will be such as will not operate in personâ, so that the personal representative of a deceased will not have the added terror of finding himself in jail because he has not sufficient assets to distribute to pay the excess profits duty. Is it intended that paragraph 5 of the Resolution should operate to discharge not merely an executor as such, but the estate of the deceased? Otherwise an executor might possibly find himself, on the certificate of the Revenue Commissioners, having subsequently to pursue the assets into the hands of a beneficiary under the will of the deceased, as in the Wankie Colliery Company case, or under the Resolution just passed.
It is not clear to me that there is any doubt that an executor, under this Resolution, would only be liable to the same extent as the deceased person and is only liable in his capacity as an executor. Even though he is personally liable, it is not clear to me that the first part of the Resolution could be so considered.
Could his own goods be got at? That is what I want to know.
Yes, I assume they could be.
Then, that is a new principle.
If he distributed the estate, or if he connived in any way——
I am leaving out the question of fraud.
If he distributed the estate after the 11th May this year then he would be liable just as he would be liable for income tax if he distributed the estate without having satisfied the claims of the Revenue Commissioners.
Would he be personally liable to a greater extent than the assets that come to his hands? Suppose the revenue claim is greater than the amount of assets that come to his hands, will he be personally liable for the excess?
I should say no, if he has not connived at a fraud.
I am leaving out the question of fraud. The section appears to me to be open to the interpretation that he would be liable to have his own personal goods seized.
I should say that is not at any rate the intention.
The Minister's intention does not come in at all.
What the Oireachtas intends does, and at the moment I am trying to interpret what I think will be the intention of the Oireachtas if this Resolution is carried.
A judge's interpretation might not be the same as the Minister's——
And there is no reason why we should usurp the functions of the judge in the matter. I am saying what the intention is.
That is no use.
It is not the intention of paragraph 1 of the Resolution in a bona fide case to make the executor personally liable to a greater extent than the value of the goods which come into his hands. If Deputy Costello thinks that the paragraph could be interpreted to impose a greater liability upon an executor, I will have the matter examined.
I am afraid it might.
It is not clear to us that there is any doubt.
I think the Minister ought to have it further examined as hardship may arise.
It has already been carefully examined.
Only with a view to getting the money; not on behalf of those persons.
At least as much consideration has been extended to the taxpayers in the last two years as was in the preceding ten.
I hope so, but I doubt it.
Only £6,000,000 extra.
It is great to see a Labour Deputy defending the retention of ill-gotten goods.
Nobody suffers more, because of that extra burden than Labour.
We are dealing here with excess profits duty. Deputy Morrissey is endeavouring to defend a person liable for excess profits.
I am doing no such thing.
On paragraph 5 of the Resolution a question was asked as to whether a certificate given to an executor would release an estate from future claims. The answer is, no.
I think the Minister should agree to insert in this paragraph the words "after a period not exceeding two years."
Supposing an executor distributes an estate in perfect good faith not knowing that there is any claim against it by the Revenue. He does not know whether years ago the excess profits duty was paid or not. Is he to be made liable personally as well as the goods he gets into his hands? What is the intention in that particular case?
I think that is an entirely vexatious question. Would the Deputy take the trouble to read the sub-section?
If the Minister does not answer the question, very well.
Will the Minister have my point examined?
With regard to paragraph 5 of the Resolution, could not some period of time be fixed? Otherwise the distribution of an estate may be held up for a very long time. This question of excess profits duty is a very considerable one where it interferes with business and with people engaged in commerce. As the paragraph stands, an estate may be held up for years before distribution can take place. In the course of the debate this evening the Minister mentioned quite a number of cases in which delay may occur. I think this paragraph requires amendment to the effect that, failing the issue of a certificate, then, say, after a period of two years the estate may be wound up.
We have the fullest sympathy for an executor. If he comes along, places all his cards on the table and allows the Revenue Commissioners to do their duty, to satisfy themselves that there is no excess profits duty liable, then there is no reason why the certificate should be held up, and it will not be held up.
We had it already this evening that a reopening of certain cases may occur. These cases will take some considerable time. I am not concerned with the executor in this case but I am concerned with the distribution of the assets. It very often happens that people are in great need of the money and, as the sub-section stands, it may be held up for any length of time until a certificate is granted. While the Minister and the Revenue Commissioners are entitled to say that the delay has been occasioned by the executor, the executor may claim, on the other hand, that there is unreasonable delay on the part of the Revenue Commissioners, and it might go on for one, two or three years. That is an unduly long period of time and I think some determination of the points ought to be arrived at within a reasonable period. There ought to be a time limit so as to enable the matter to be wound up.
There may be a claim of undue delay on the part of the Revenue Commissioners, but we had here a statement by a Deputy that the Revenue Commissioners dealt with every case expeditiously. They are anxious to get in revenue and there will be no undue delay in dealing with the matter if they get the facilities the executor should afford them.
The case that was mentioned was a case in respect of goods. I am quite sure there is no unreasonable delay in any case. But the difficulty, so far as the individual is concerned, in this case is that there is no limit of time with regard to the executor or the beneficiaries under the will. I think some time ought to be fixed during which the matters in question ought to be determined one way or the other. As it stands, an estate might never be wound up. I do not say that such a thing has happened, but, as it stands, the Revenue Commissioners are entitled not to have a case determined, and, in those circumstances, the estate would be held up and the executor could not wind it up.
To fix a time limit would merely be offering an inducement to an executor who wants to defraud the revenue to delay having the matter dealt with. If we said that a matter must be disposed of within three years, all he has to do is to delay giving the Revenue Commissioners the information they require——
Personally, I thank God, and I think it is a great thing for the country that there are more honest people in it than the Revenue Commissioners and the Minister.
One thing is clear, and that is that there are also a few more dishonest people.
I move: "That the Dáil agree with the Committee in Resolution No. 17." This Resolution provides that, where an instrument is chargeable with ad valorem duty in respect of money in any currency other than the currency of Saorstát Eireann, such duty shall be collected on the value of that money in Saorstát Eireann currency, according to the rate of exchange current at the date of such instrument. Section 46 of the Finance Act of 1925 provided for the stamping of such instruments as are referred to in the Resolution by reference to the value in British currency, according to the rate of exchange current at the date of the instrument. This Resolution substitutes the value in Saorstát Eireann currency for the value in British currency.
The revenue may lose on this section according as our currency goes up.
I move: "That the Dáil agree with the Committee in Resolution No. 18." Section 50 of the Finance Act of 1932 imposed a stamp duty on the available surplus of every sweepstake held under the Public Charitable Hospitals (Temporary Provisions) Act, 1930. If there had been no amending legislation, it was contemplated that the latter Act would have expired on the 1st July, 1934, and the operation of Section 50 of the Finance Act of 1932 would, accordingly, be limited in point of time. A new measure, the Public Hospitals Bill, 1933, is at present before the Dáil with the object of repealing the earlier Act and replacing it by more permanent provisions. It, therefore, becomes necessary to adapt Section 50 of the Finance Act of 1932 to enable stamp duty to be charged on the available surplus of sweeps to be held under the terms of the new Bill.
I cannot let this Resolution pass without protest, as the Minister knows. The Minister's name has gone down to history as the first Government Minister who has placed a tax on the incomes of charitable institutions, such as hospitals, and, as I told him last year, that is not an enviable position for him to occupy. I wonder if he has not seen the writing on the wall, because, when he brought forward his proposal a year ago, the Derby Sweep was at its peak, at the height of its popularity. What has happened since? The Derby Sweep of the present year has fallen by nearly £1,000,000. I am sure that the Minister would not take on himself the credit for having injured the sweepstake to that extent, but, at all events, that has happened. Not only has the total amount received been lessened by over £900,000, but the amount going to the hospitals has been lessened by £221,000. That is a great falling off for the hospitals and, as I say, I am wondering if the Minister has not seen the writing on the wall and has not made up his mind that it would be better for him, before he has destroyed the thing altogether, to drop this proposal. However, there is something to be said, of course, for his sticking to his point.
Since this time last year, how much money has been placed in the State Exchequer from the Hospitals' Fund? No less a sum than £1,011,393. It would, therefore, be surprising if the Minister, even in spite of the appeals made to him, or in spite of the thought that he was going to wreck the whole business, were to give up the chance of making a little money, but I am amazed to hear him speak about pursuing poor people for £30,000 or £15,000, when he has collared within one year, from the time he started his retrospective legislation and went back to collect revenue on the Grand National Sweep of 1932, a sum of—let me repeat it— £1,011,393. At this last moment, may I appeal to the Minister to consider whether it would not be advisable for him to drop this stamp duty on the charitable hospitals? He may think that there is nothing in the suggestion I make that the institution of the stamp duty has done a great deal to injure the sweeps, but I say it with great confidence, because I have received, from great numbers of people, letters stating that they had refused to sell tickets or to have anything more to do with the sweeps because the Government was beginning to collect the money that should be going and which these people had subscribed to the hospitals.
I repeat that I am not easily scared but I do think, and I told the Minister last year, that, as soon as the public knew that he was going to collar large amounts of money from the sweepstakes, they would cease to subscribe as they had subscribed before. Might I ask him, therefore, to reconsider this. I suppose he will not reconsider until he finds himself without anything to reconsider and until he finds himself eventually going very much behind hand so far as the amount he is receiving is concerned. What he has received, even from this Derby Sweep, is nothing to be ashamed of. He has received £185,760. That is an extraordinarily substantial sum to receive out of one sweep when one listens to the Minister's references to pursuing poor people and hunting them into jails because they had not paid excess profits duty for the last 11 or 12 years. The Minister made one suggestion which, I think, was not worthy of him. It is because I am not connected with the Party that I do not think he ought to have allowed himself to say it. I do not think he ought to have allowed himself to connect the Cumann na nGaedheal Party with the dishonesty that he suggests. He suggested that there were people who are not paying excess profits duty, and I do not think he should have used the name of any Party. I would have objected very strongly if he had suggested anything of the same nature in regard to anybody with whom I had any connection, but, strange to say, no Cumann na nGaedheal Deputy objected to it.
They know him too well.
I should like to say, in reply to Deputy Sir James Craig, that it is not possible for me to consider his suggestion. We have the fact that the sum accruing to the State from the available surplus represents, as the Deputy himself admitted, a very substantial revenue which we are not in a position to forego. I cannot for a moment accept his suggestion that the imposition of the stamp duty has been responsible for the decline in the sweepstakes. None of us at any time expected that the sweepstakes would go on expanding in perpetuity. All of us knew that a day would come when the sweepstakes would reach their zenith and begin to decline. When in Opposition, I pointed out that, at best, the sweepstakes could only have a temporary popularity, that they would go the way of similar ventures in the past, that the well of optimistic gamblers was bound to dry up. Apart altogether from that, a number of things—just as well known to Deputy Sir James Craig as to me—that occurred during the past year had, I believe, a much more detrimental effect on the sweepstake than anything done in this country. It is not necessary for me to go into those matters now. The Deputy is aware of them. I think that he ought to bear that in mind when he is attaching blame where blame does not properly belong.
In addition, we have to take into consideration the depressed conditions which are more general and more severe elsewhere than they are here. The fact that unemployment has increased considerably in the countries from which the main revenue of the sweepstake is drawn would be a much more reasonable explanation of the falling-off in the receipts than the explanation which Deputy Sir James Craig has given to the House. If there is increased unemployment in a country, naturally the people have not the wherewithal to gamble. They have unemployment on a much larger scale in Great Britain, the United States and continental countries than we have here. The fact that unemployment has not only not decreased but has increased in these countries goes a long way to explain the falling off in the popularity of the sweepstakes apart from any other considerations. But there are other considerations to be borne in mind.
Has the Minister never noticed the number of unemployed persons who have drawn horses and won prizes in the sweepstake?
I should like to draw the attention of the Minister——
Does the Deputy wish to put a question to the Minister? The Minister rose to conclude the debate.
I was not aware of that. We were not made acquainted with that.
I was about to put the resolution when the Minister rose to reply.
I desire to put a question to the Minister. Are we to take it that this Government is definitely committed to the policy of levying this unjust taxation on the Hospitals Sweepstakes? Is this to be the continued policy of the Government?
Is the Minister aware that a very large proportion of the £220,000 or £250,000 which the State has taken from the Hospitals Sweepstakes would otherwise have gone to the relief of unemployment in building work and additions to these hospitals, and is he aware that as a result of this stamp duty the unemployed have been deprived of at least £200,000?
The place for questions is on the Order Paper.