asked the Minister for Finance whether he intends to suspend the effect of Section 17 (5) of the Finance Act, 1929, whereunder income-tax assessments under Schedule E are based on the total remuneration for the year preceding that of assessment, in view of the substantial reduction in the income of many persons consequent on the international crisis and in view of the fact that a similar concession has been made by the Revenue Commissioners in Great Britain.
Ceisteanna—Questions. Oral Answers. - Income-Tax Assessments.
The answer to the Deputy's question is in the negative. The Deputy is mistaken in supposing that there has been any departure in Great Britain from the system of making income-tax assessments under Schedule E on the basis of the remuneration of the year preceding the year of assessment. What happened in Great Britain was this: The British Finance (No. 2) Act, 1939, provides for an increase in the standard rate of income-tax for the current year 1939/40 from 5/6 to 7/- in the £, i.e., an increase of over 27 per cent. Section 11 of the same Act provides that an individual whose earned income for the year ending the 5th April, 1940, has, owing to circumstances "directly or indirectly connected with the present war," been reduced by 20 per cent. or more below the income of the preceding year may apply, within 12 months after the 5th April, 1940, for certain relief, the relief being computed by reference to the reduction in duty on the earned income which would have been charged if the basis of assessment had been the actual income of the year 1939/40 instead of the income of the preceding year, but subject to a set-off of the amount, if any, by which the taxpayer gained through his assessment for the year 1938/39 being computed by reference to the income of the preceding year instead of by reference to the income of the current year. The section provides that the relief shall be given either by way of repayment or by set-off against the second instalment of duty payable on the 1st July, 1940.
I do not propose to have any similar provision inserted in the Finance Bill now before the House. As the Deputy is aware, the Bill, unlike the British Bill, does not provide for any increase in income-tax here for the year 1939/40, and in other respects the circumstances are radically different from the circumstances prevailing in Great Britain. I intend, however, to consider the matter further when the Finance Bill for next year is under consideration. By that time we shall have much more information as to whether a relieving provision is necessary in this country; and, if so, what form it should take. If I am satisfied that any such relieving provision for the year 1939/40 is needed the necessary clause can be embodied in next year's Finance Bill and, as in Great Britain, the appropriate relief can be given either by way of repayment or by set-off against the second instalment of duty payable for this year in July, 1940.
I am very grateful to the Minister for his comprehensive reply.
I may say that, like the Deputy, I also was mistaken as to the terms mentioned in that Bill.