In Committee on Finance. - Financial Resolution No. 7—Excise.

I move:—

(1) That the Third Schedule to the Finance Act, 1926 (No. 35 of 1926), shall be amended as on and from the 1st day of January, 1934, as follows and section 20 of that Act and the said Third Schedule shall have effect accordingly, that is to say—

(a) In paragraph 3 of the said Third Schedule—

(i) the passage beginning with the word "Vehicles" and ending with the figures "1888" shall be deleted and the words "The following vehicles, that is to say" shall be inserted in the said paragraph in lieu of the words so deleted, and

(ii) the words "other vehicles" shall be deleted and the words "vehicles used as large public service vehicles within the meaning of the Road Traffic Act, 1933 (No. 11 of 1933)" shall be inserted in the said paragraph in lieu of the words so deleted;

(b) The following proviso shall be inserted in paragraph 5 of the said Third Schedule at the end of that paragraph, that is to say—

In the case of a vehicle to which this paragraph applies and which is not electrically propelled and which exceeds one ton but does not exceed one and one-quarter tons in weight unladen and in respect of which it is shown to the satisfaction of the Minister for Industry and Commerce that such vehicle was assembled in Saorstát Eireann in a manner and to an extent for the time being approved of by the said Minister, duty shall be charged, levied, and paid in respect of such vehicle at the rate of twenty pounds in lieu of the above-mentioned rate of thirty pounds.

(c) The following sub-paragraph shall be inserted in paragraph 6 of the said Third Schedule in lieu of sub-paragraph (b) now contained in that paragraph, that is to say—

(b) any vehicle which is used as a public service vehicle within the meaning of the Road Traffic Act, 1933 (No. 11 of 1933), and was registered in Saorstát Eireann on the 21st day of April, 1926, as a hackney carriage within the meaning of section 4 of the Customs and Inland Revenue Act, 1888, and has an engine of the same specification and design as any class of engine for the time being entitled to the benefit of the foregoing paragraph (a)... £12;

(d) In the first proviso to paragraph 6 of the said Third Schedule, the words "a hackney carriage as defined in section 4 of the Customs and Inland Revenue Act, 1888," shall be deleted and the words "used as a small public service vehicle within the meaning of the Road Traffic Act, 1933, (No. 11 of 1933), "shall be inserted in the said proviso in lieu of the words so deleted;

(e) The third proviso to paragraph 6 of the said Third Schedule shall have effect in relation to repayment of duty in respect of a period ending after the commencement of Part VIII of the Road Traffic Act, 1933 (No. 11 of 1933), as if, in respect of so much of such period as is subsequent to such commencement, the words beginning with the words "a hackney" and ending with the word "fitted" were deleted and the words "fitted with a taximeter and lawfully used as a street service vehicle within the meaning of the Road Traffic Act, 1933 (No. 11 of 1933)," were inserted in lieu thereof;

(f) The following proviso shall be inserted in paragraph 6 of the said Third Schedule at the end of that paragraph, that is to say—

In the case of any vehicle to which sub-paragraph (c) of this paragraph applies and which is not electrically propelled and is not a hackney carriage as defined in section 4 of the Customs and Inland Revenue Act, 1888, and which exceeds sixteen horse-power, and in respect of which it is shown to the satisfaction of the Minister for Industry and Commerce that such vehicle was assembled in Saorstát Eireann in a manner and to an extent for the time being approved of by the said Minister, no duty shall be charged or levied in respect of the excess of the horse-power of such vehicle above sixteen horse-power.

(2) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

This Resolution provides for reductions in regard to the tax on motor vehicles which fulfil certain conditions, and also provides for redrafting certain of the clauses of the Finance Act, 1926. The reductions it is proposed to grant are, first, to provide that for all private motor cars assembled as to body and chassis in Saorstát Eireann, in accordance with a definition to be furnished by the Minister for Industry and Commerce, which exceeds 16 horse power a maximum tax of £16 shall be leviable. It is proposed to give effect to that intention by paragraph 5 of the Resolution. It is also intended to provide that, for all commercial vehicles, exceeding 20 cwts. unladen, and not exceeding 25 cwts, which are assembled as regards body and chassis in Saorstát Eireann, in accordance with a definition again to be furnished by the Minister for Industry and Commerce, a duty of £20 per annum shall be leviable. It is proposed to have that by paragraph (b) of the Resolution.

The Resolution also seeks to re-define the term "hackney vehicle" to be applied to public vehicles under the Road Traffic Act, 1933 in (a), (b), (c), (d), (e). The Minister for Industry and Commerce will deal with the reasons which have actuated him in requiring a reduction of the duties on motor vehicles. I would like to say a word by way of explanation of the proposals to re-define "hackney vehicles." The present definition of hackney vehicles is derived from an Act passed in 1888, and is unsuitable to present conditions. This definition, by the exclusion or elimination of a class of private cars which, under this Resolution, would in certain circumstances be granted a reduction of the duty, is not defined in the Act, or in any other Act, since private motor cars constitute the residue, after all other classes, such as hackneys, commercial cars, and goods carrying cars, have been dealt with. Consequently the narrow scope of the hackney class results in a too wide definition of the private motor class. It is proposed in the Resolution to give a concession to private cars assembled in the Free State. It is very desirable that the class of private car should be limited correctly when the concession is being given.

The two main changes effected by this Resolution are in the form of remission of duties. It is in that respect different to the other Resolutions. Although the Resolution provides for remission of duties it is not anticipated, on the whole, that it will result in a reduction of revenue. However, that is another consideration. In the first place it is proposed to levy a duty at the rate of £20 on a commercial vehicle which does not exceed, unladen, 25 cwts. At the present time there is a duty of £16 on the vehicle which is 20 cwts., and which rises to £30 upon a vehicle not exceeding 30 cwts. There is, therefore, a jump from £16 to £30 in the duty payable on a car which has an unladen weight of 20 cwt. and a car unladen of 21 or 22 cwts. The position is that some 18 months ago, when the customs duty was imposed, it effectively prohibited the importation of bodies for commercial vehicles. The manufacture of these bodies is now being undertaken in this country, but, with this difference, that the bodies produced here are, in the main, coach built, whereas the bodies used more extensively elsewhere are of steel construction, and weigh less. We have definitely used the powers possessed under various Finance Acts in order to encourage the production of wooden bodies for commercial vehicles, as against steel bodies, because they can be produced within the country. It has been found very difficult, if not impossible, to get Irish built bodies erected for a standard chassis under 20 cwts. which would entitle the car to the £16 instead of the £30 duty. The effect of the existing taxation position was, therefore, definitely to discourage the construction of these bodies in this country. In fact there has been a falling off in the number of registrations of that type of car with, of course, an increase in the number registered up to 30 cwts. and the number registered as being under 10 cwts. The effect of the change proposed is to impose an intermediate rate of duty of £20 on a car between 20 and 25 cwts. unladen weight, subject to the condition that the body and the chassis are assembled in this country. For the time being the concession is confined to two makes of cars, but there is reason to believe after the operation of the concession, that the number of types of commercial vehicles completely assembled in this country will be increased.

The second change imposes a maximum horse power tax upon a private car which is assembled as to body and chassis in this country. The effect will be to encourage the assembly here of high powered cars. The reason why we make this change is that American motor car manufacturers are showing more interest in the position created by the different duties here than British car manufacturers. We have held the position for a considerable time so that the makers of the different cars in more general use here would have availed of the opportunities afforded in the market, if prepared to conform to Government policy. They have not done so to any extent. American manufacturers have, however, shown certain enterprise in this direction, and there is reason to believe that others will come in. Consequently, we propose to give this concession, and this additional inducement to the higher powered cars which they make, so that they will not be at any disadvantage in respect of tax, over the ordinary type of car heretofore used in this country. There will be a maximum tax of £16. Cars up to 16 horse power will pay £1 a unit. Any cars over 16 horse power will only pay £16 tax. That again is subject to the condition that they are assembled here as to body and chassis, and in accordance with whatever definition of assembly may operate from time to time at the discretion of the Minister for Industry and Commerce. It is the intention to give these concessions in respect to cars assembled on what is known as the knock-down chassis. We have a three-tier duty operating in respect to motor duties. There is no duty on unassembled parts. There is a low rate of duty operating upon certain assembled parts which are defined in the Finance (No. 4) Act of last year, and there is a higher duty applying to the assembled chassis or other assemblies. Cars which are assembled subject to importation at the intermediate rate of duty of the parts enumerated in the Finance (No. 4) Act of last year will be entitled to receive this concession here, at any rate for some time to come. Perhaps at some later date we may decide that all parts of the chassis shall also be assembled here. But that day is a considerable distance ahead.

The effect upon our Road Fund will not be very substantial at the beginning, although it may, after a lapse of time, have the effect of increasing rather than decreasing this revenue, in so far as there will be a wider use of higher powered cars, subject to the £16 tax, by people who would ordinarily have purchased lower horse power cars, subject to a lower tax. The concession in respect of these cars as in the case of commercial vehicles applies for the time being only to two firms, but we hope that the number of such firms taking advantage of it will be increased in due course.

Resolution agreed to.