I move the Second Reading of the Bill. The purpose of the Bill is twofold: first, to make provision for the imposition, adjustment and remission of taxation as outlined in the Budget; and, secondly, to give effect to any changes in existing taxation legislation which have been found to be necessary or desirable. As the main provisions of the present Bill in regard to the imposition of taxation have been fully debated already when the Budget Resolutions were before the House, and as there will, presumably, be a full discussion on the various sections during the Committee Stage, it will be necessary at this stage to refer to the provisions of the Bill only in a general manner.
Clause 1 of the Bill prescribes the rates of income tax and surtax for the current financial year and provides for the continuance of previous enactments. In regard to Clause 2, income tax assessments under Schedule A on buildings in the Saorstát are based on the poor law valuation. As I have already explained in the debate on the Resolution, an allowance for repairs and maintenance is made in arriving at the valuation and, therefore, there is not, in our view, any justification for making a deduction from the income tax assessment in respect of the same items. It is proposed to discontinue this deduction accordingly. I may say that no alteration in the existing practice is being made in assessing lands, farmhouses and factories.
The Finance Act, 1933, provided that persons to whom the Public Services (Temporary Economies) Act, 1933, applied should be assessed to income tax during the financial year 1933-34 on the salaries which they would have received in the preceding year had the Temporary Economies Act been in operation during that period. Clause 3, sub-section (1), of this Bill, when enacted, will have the effect of offsetting the concession made to these particular individuals last year. In the case of the national school teachers, however, some concession is necessary in view of the reduction in their salary scales, which took effect from 1st April last, and sub-section (3) of the proposed section is directed to this end. Sub-section (2) of the same section will afford to persons affected by the Local Services (Temporary Economies) Act, 1934, relief in regard to income tax on lines somewhat similar to those afforded last year to persons to whom the Public Services (Temporary Economies) Act, 1933, applied.
In regard to Clause 4, under the provisions of Part II of the First Schedule of the Finance Act, 1929, the tax in respect of income arising from possessions in any place out of the Saorstát falls to be computed on the full amount arising in the year preceding the year of assessment, whether the income has been or will be received in Saorstát Eireann or not, if the taxpayer should happen to be domiciled and ordinarily resident in Saorstát Eireann. It has been decided in the courts that income arising from an employment exercised wholly abroad is income from a foreign possession and it is found that in certain cases of Irishmen employed wholly abroad and technically resident in this country a hardship may thereby be occasioned and the clause is designed to enable the Revenue Commissioners to grant such relief as may be just in such circumstances.
Section 139 of the Income Tax Act, 1918, provides for the issue by the special commissioners of what is known as a precept calling on a person who has given notice of appeal to furnish a schedule of particulars for the purposes of the appeal. As there are only two appeal commissioners and the appeal may be heard by one commissioner the signature of such precepts by both commissioners gives rise to administrative difficulties and, in our view, is unnecessary. In 1929 legislation was passed enabling one special commissioner to hear appeals. There are certain applications for relief, however, usually unimportant from the point of view of the Exchequer, but important from the point of view of the taxpayer, which are not technically appeals within the meaning of the Income Tax Acts and the 1929 legislation, it has been held, does not apply to these. Clause 5 will have the effect of remedying this and making it possible in applications for relief in certain cases to have the necessary procedure carried through by one special commissioner.
Clause 5 simplifies and brings up to date the method of appointment of collectors of taxes and eliminates the necessity for the sealing by the special commissioners of the warrants appointing collectors, including warrants already issued. It eliminates also the necessity for the signature of the special commissioners to the collector's duplicates of assessments. Clause 7 relates to the imposition of certain new Customs Duties and adjustments of certain other Customs duties which formed the subject matter of Financial Resolution No. 4. Clauses 8 to 11 inclusive, when enacted, will have the effect of codifying the enactments relating to the Customs duties on boots and shoes, wearing apparel, certain woven tissues and motor vehicles. Certain minor modifications in the rates of duty are made, but the main purpose of this clause is to simplify administration by bringing together within the four clauses the existing legislation regarding the duties on these articles at present spread over several enactments.
Clause 12 imposes a Customs duty on steam cars, parts and accessories. Clause 13 makes provision for the reduction as from 1st July next of the duty on tea by 4d. per lb. Clause 14 exempts from Customs duty articles which may be shown to the satisfaction of the Revenue Commissioners to be more than 100 years old. Clause 15 relates to the alteration of the duty on daily newspapers. Clauses 16, 17 and 18 deal with tobacco and relate respectively to the rate of drawback to be paid, the reduction from 7d. to 3½d. in the amount of rebate allowable in the case of certain manufacturers and the revision of the Excise duty on tobacco. Sub-section (2) of Section 18 makes provision for a concession with regard to the Excise duty in the case of certain experimental tobacco growers and manufacturers. Those are growers who will manufacture their own tobacco. Clause 19 exempts from entertainments duty all outdoor athletic sports. Clauses 20 and 21 are complementary to certain of the clauses, particularly 7 to 11 inclusive, and mainly repeal and amend certain of the earlier Finance Acts and terminate the charge of certain duties.
Formerly road tax was payable in respect of street taxis at the rate of £20 per annum, upon which a rebate of £8 per annum was allowed. Clause 22 of the Bill has the effect of abolishing the rebate system and reducing the rate of tax to £10 per annum. The necessary Resolutions, of course, have been passed by the House.
Clause 23 deals with those mechanically-drawn vehicles which are superimposed upon the tractor part and are for all practical purposes lorries. I might say with reference to the debate which took place on the preceding Resolution, this clause does not refer to tractor and trailer units where the trailer is attached by a simple drawbar arrangement; that is, that no part of the trailer rests upon the tractor portion of the machine. The remaining three clauses in Part II of the Bill relate to administration. The first of these provides that the penalty for a certain type of road tax offence may be recovered and enforced at the suit of a member of the Gárda Síochána. It might be well to mention that the District Court is given power to mitigate any such penalty.
The next clause will bring that particular type of offence into line with the other road tax offences in the matter of court proceedings. The necessity for that clause arises from the fact that under existing legislation search warrants in certain types of cases can only be enforced in the day time. The legislative provision imposing this limitation does not define daylight, but the Revenue Commissioners have been advised that it covers the period only from sunrise to sunset, as seems to be but natural. The limitation has hitherto provided a powerful safeguard for smugglers and the proposed amendment provides for the conduct of searches by night where necessary. This is by no means a novel provision, in view of the fact that many of the Excise laws contain a similar provision. Clause 26 relates to Customs and Excise and stipulates the penalty for a breach of any of the provisions imposed by the Revenue Commissioners in relation to any Customs duty.
Part III of the Bill deals mainly with death duties. Clause 27 has been explained by me in connection with Financial Resolution No. 19, which provides that in the cases to which it applies, the extent of the beneficial interest in an annuity or other interest shall be ascertained without regard to any expectant interest of the person becoming entitled on the death of the testator. Clauses 28 and 29 embody the provisions of Financial Resolutions 20 and 21 respectively. They both provide for the necessary amendment of Section 26 in the Finance Act of 1931 relating to settled property transferred to a private company. Clause 30 embodies the provisions of Financial Resolution No. 22. In the circumstances which I explained when this Resolution was before the Dáil, it was considered necessary to provide that bequests to foreign charities shall not be exempt from legacy or succession duty. Clause 31 makes provision for granting such an exemption in the case of bequests to Irish charities. Clause 32 is designed to enable summary proceedings to be taken in connection with the recovery of death duties. The proceedings will be more expeditious and less expensive than the cumbrous method of proceeding by way of information and answer, which is at present necessary in certain cases; while on the other hand the taxpayer will not be hampered or his difficulties increased. At present where there is no dispute as to liability attachment proceedings can be taken for succession duty, but apparently not for legacy duty. This clause puts that right. At present also, it is possible, when taking proceedings for the delivery of legacy duty accounts, to require payment of the duty. This clause enables the same procedure to be adopted in the case of succession duty.
Clause 33 provides for exemption from stamp duty in the case of instruments reconveying property to the Agricultural Credit Corporation. The provisions of clause 34 were the subject of Financial Resolution 23, and were fully explained by me when that Resolution was before the House. As indicated in the marginal note, the clause is designed to provide for the confirmation of the powers possessed and acts done hitherto by the Revenue Commissioners under certain statutory orders made in 1923. Clause 35 is a usual clause and it provides for the care and management by the Revenue Commissioners. Clause 36 relates to the short title, construction and commencement.