Dáil Éireann debate -
Wednesday, 8 May 1940

Vol. 80 No. 1

Financial Resolutions. - Resolution No. 3—Income-Tax.

Mr. O Ceallaigh

I move:—

(1) That Section 20 of the Finance Act, 1922, shall be construed and have effect as if paragraph (b) of sub-section (1) of the said section were deleted and the following paragraph inserted in lieu thereof, that is to say:—

"(b) which by virtue of or in consequence of any disposition made, directly or indirectly, by any person (other than a disposition made for valuable and sufficient consideration) is payable to or applicable for the benefit of any other person, but excluding any income which—

(i) arises from capital of which the disponer by the disposition has divested absolutely himself in favour of or for the benefit of the said other person, or

(ii) being payable to a person who is an individual for his own use, is so payable for a period which exceeds or may exceed six years, or

(iii) being applicable for the benefit of a named person who is an individual, is so applicable for a period which exceeds or may exceed six years."

(2) That the amendment of Section 20 of the Finance Act, 1922, mentioned in the foregoing paragraph shall apply in respect of every disposition made on or after the 8th day of May, 1940, whether before or after the passing of the Act giving statutory effect to this Resolution and shall also apply, as on and from the 6th day of April, 1947, in respect of every disposition which was made prior to the 8th day of May, 1940, and of which the effect is not spent on the 6th day of April, 1947.

Mr. Dillon

I think we can take the Resolution as read.

Mr. Cosgrave

Would the Minister tell us what it means?

Mr. O Ceallaigh

Have not copies been circulated?

Mr. Dillon

Yes.

Mr. Cosgrave

Yes, but what is the meaning of this?

Mr. O Ceallaigh

Well, there are certain gifts of donations to charities where people covenant to pay a subscription to the charity concerned, over a number of years, and, by doing so, escape surtax by having that donation or gift to the charity included as a deduction in their return for surtax purposes, and moreover the charity concerned comes to the Revenue Commissioners and asks to be given a refund of the income-tax that would under the covenant be deductible against that gift or donation.

Mr. Cosgrave

Yes, we know that.

General Mulcahy

Will the Minister give us an example?

Mr. O Ceallaigh

Does the Deputy want an example?

General Mulcahy

Yes.

Mr. O Ceallaigh

Well, for example, A.B. has been in the habit of subscribing £13 10s. per annum to a certain charity. At the suggestion of the organisers of the charity he signs a covenant to pay the charity £20 a year for seven years or until his death, if earlier. A.B. then pays annually £20, less income-tax at 6/6 in the £, (viz. £6 10s.) to the charity; i.e. he continues to disburse £13 10s. per annum as before. The charity, on the ground of statutory exemption, claims repayment from the revenue of the £6 10s. income-tax deducted by A.B., and the later claims a deduction of £20 in calculating his income for surtax purposes.

Mr. Cosgrave

Is the Minister standing over that?

Mr. O Ceallaigh

Yes, certainly.

Mr. Cosgrave

It seems to me that this is a case in which the Minister says that he must get something out of that £20. A man gives £20, or £13 10s., but this will simply mean that the subscription to the charities concerned will be reduced and that the man, instead of giving £20, will only give £13 10s.

Mr. Dockrell

Is the Minister sure of these facts, according to the way he has stated them? Would not the charity concerned have to produce a voucher that that had been deducted from the man's income-tax?

Mr. O Ceallaigh

The Revenue Commissioners can test that for themselves.

Mr. Cosgrave

Is it not a fact that such a charity is to be regarded as a good dispenser? History shows that there is no better dispenser of charity than these charitable organisations, and here we are going to get something out of such organisations. Frankly, I cannot understand it.

Mr. O Ceallaigh

That is not so.

General Mulcahy

Is this not a question of bringing such a man within income-tax payments?

Mr. O Ceallaigh

This is surtax.

General Mulcahy

Is this not income-tax?

Mr. O Ceallaigh

It is not, not altogether.

General Mulcahy

Well, I take it that a man, on his full income, would be paying 6/6 income-tax under present circumstances. An arrangement was possible in the past whereby, if that man, instead of paying his income-tax of 6/6 on, let us say, £20, paid over the whole of that £6 10s. to a charity——

Mr. O Ceallaigh

It is £13 10s. in this case.

General Mulcahy

Yes, to the charity, the charity could ask for a refund to the charity of the £6 10s. that the person concerned had paid up. Now the Minister is proposing to introduce a measure by which charities who were getting that £6 10s. in the past will not be able to get it in future.

Mr. O Ceallaigh

That is right.

General Mulcahy

And that, over a certain amount of moneys, for every £20 that charities used to get in the past they are only to get £13 10s. now.

Mr. Dockrell

Or the subscriber will have to increase his subscription.

Mr. O Ceallaigh

It will not work out that way exactly.

Mr. Cosgrave

It will very nearly.

Mr. O Ceallaigh

No; it is only in the case of covenanted charities.

General Mulcahy

In respect of a particular part of the moneys going to a charity which is covered by covenant in that particular way the charity is going to be deprived of £6 10s. out of every £20?

Mr. O Ceallaigh

It is going to be deprived of the subsidy from the State.

Mr. Cosgrave

The Lord save us. I suppose you will say, " I have been giving you that all my life."

General Mulcahy

As far as a charity is concerned, in the first place it is going to lose a substantial amount of a certain part of its income.

Mr. O Ceallaigh

The covenanted charities, yes.

General Mulcahy

And in the second place, a certain number of charities that were able to stabilise a fair part of their income in this particular way are going to have their income completely unstabilised?

Mr. O Ceallaigh

Yes.

Mr. Costello

I want to ask a question. Would the Minister say if this particular provision applies in the case of the Benevolent Council of the Bar, for instance?

Mr. O Ceallaigh

I hope so, if they are covenant charities.

Mr. Costello

Yes. The practice has been for those members of the Bar who were able to afford it to give a fairly substantial subscription each year and numbers of the members of the Bar, taking a chance on their income continuing—which is rather a chance having regard to the Minister's depredations here—decided to covenant that they would give the same particular subscription for, I think, seven years. I understand that this particular provision is really aimed at that, in order to prevent the Bar Benevolent Fund from getting the same income they would otherwise have got were it not for this provision.

Mr. O Ceallaigh

I had not thought of that, but I would not have been any less enthusiastic if I had thought of it.

Mr. Costello

Do I take it from the Minister's somewhat facetious reply that he would take a considerable degree of pleasure in taking away income from the Bar Benevolent Society which is given to widows and children of distressed barristers and that he would take it with considerable enthusiasm? Do I understand that this provision is to meet such a case as the Bar Benevolent Society which fulfils the charitable purpose of relieving widows and orphans and that the Minister would take their income with enthusiasm?

Mr. Dillon

Surely we can boil all this down to simplicity. We have taxed the tobacco consumer; we have taxed the sugar consumer; we have taxed the flour consumer; we have taxed the bacon consumer; we have taxed the income-tax earners; we have taxed every individual citizen of the State up to the very limit that he is capable of paying and now we propose to tax the beneficiaries of charities. Is not that all it means? We are going to tax the charities of this country to the tune of £30,000 a year.

Mr. O Ceallaigh

£13,000.

Mr. Dillon

£13,000. Is not that the truth? Is not that what it boils down to?

Mr. O Ceallaigh

No.

Mr. Dillon

Let us follow this through. It is important to get it clear in our minds. Who is going t be poorer as a result of this collection of £13,000 by the revenue? Is it the charities? Can the Minister tell us?

Mr. O Ceallaigh

I do not want to go back and forward answering.

Mr. Dillon

Will the Minister be kind enough to explain that?

Mr. O Ceallaigh

I will explain everything in due course.

Mr. Dillon

The debate will go on for a long time if it is going to be pursued on those lines. It can go on for a long time but it is important that we should know what we are doing. We are going to extract by this Financial Resolution a sum of £13,000 from the charities of this country. Has any democratic country in Europe been brought so low that it has to contribute to the balance of its Budget by searching the coffers of the charities of the country which it is supposed to govern? This is the poor man's Government. This is the Government filled with solicitude for the poor. Does Deputy Tom Kelly believe that it is desirable to take £13,000 from the charities of this country in order to balance the Budget? He ought to intervene and tell us. You can cloak this, as the Revenue Commissioners can always cloak everything, with a thousand discourses on the complicated income-tax code but the net result of it is that this Resolution will operate to collect £13,000 per annum from the charities of this country. Is there any Deputy in this House who considers that a desirable way to balance the Budget, because, if there is, I challenge the Deputy to say so. Is there a single Deputy on the Fianna Fáil benches who will get up now and have the courage to say that he thinks this £13,000 should be taken from the charities in Ireland? I defy any single one to get up and say that.

Mr. T. Kelly

Charity begins here, begins at home.

Mr. Dillon

God knows, the day you voted for £480 a year a lot of people thought so.

Mr. Costello

The Minister has answered me one question. Perhaps he will answer another either now or at a subsequent period of time.

I have given him one illustration of a case in which I personally am interested. I want to give him another and to find out from him if this particular provision will cover it because I think it will. There is a conference of the Society of St. Vincent de Paul in which I am interested. Arrangements have been made, where a number of individuals have been in the habit some years past of giving an annual subscription to this particular conference, to see if they would covenant in the way that has been so far legalised by the law of this country to continue their annual subscriptions to the same amount over the necessary period of seven years. Members were prepared to do that. The position which this conference was faced with was that it had very little means at its disposal other than the subscriptions of the particular persons to whom I allude. A number of these persons would have very serious difficulties in continuing their subscriptions at all. The result would be that the conference in question would lose a considerable portion of its income by reason of the many calls that are upon the subscribers. It was thought that if they could be induced to stabilise their subscriptions they would know what would be the extreme limit of their commitments, they would know where they stood, and the conference in question would benefit a little by this remission of tax that was given. The position appears to be this: That the poor who are visited by this particular conference are going to have that amount of money which we have saved taken away from them and dispensed in other wild-cat schemes by the Government. So that, not alone does this particular impost—because that is what it is—affect the benevolent society of the Bar but it appears to me—and I want an answer from the Minister—to affect the various conferences and the Central Council of the Society of St. Vincent de Paul.

Mr. Hickey

Surely the Minister would be easier in his conscience if he put more on the surtax rather than collect the money in this way.

Mr. O Ceallaigh

I am not at all in agreement with the law as affected by covenanting. If these gentlemen wish to covenant to pay £20 a year or £30, let them continue to pay it but why should the mere fact that they covenant to pay a subscription draw 6s. 6d. in the £ from the taxpayer out of revenue? That is what is happening.

Mr. Hickey

They do it by secret methods?

Mr. O Ceallaigh

Deputy Dillon talks about the democratic man. The democratic man, the man with the small income, cannot afford to covenant, while the man with the large income can afford it and can tie himself up for seven years, knowing that he has his investments and that the money is bound to come in because he has a definite and regular income. A poor man cannot afford to do that, and he gives out of his income proportionately a great deal more than the rich man, as a general rule. Here, however, is a case where those who can afford it are covenanting to pay certain subscriptions and, in doing so, are mulcting the taxpayer to the tune of 6s. 6d. in the £ I think that is not proper.

Mr. Hickey

In other words, they are escaping?

Mr. O Ceallaigh

They are escaping surtax.

General Mulcahy

They are not.

Mr. Hughes

Who loses by it? Let the Minister answer the question.

Mr. O Ceallaigh

Deputy Mulcahy's argument will not be made any stronger by shouting.

General Mulcahy

I want the Minister to hear it.

Mr. O Ceallaigh

They are escaping surtax. They are escaping to the extent of the amount of the subscription which escapes surtax, if they are surtax payers. Now let the Deputy shout again and see if it will do him any good.

General Mulcahy

I will, when the Minister sits down.

Mr. O Ceallaigh

It will not affect me or anybody else in the House. The Deputy can get all the trumpets he likes. If he has an argument, let him use it, but shouting will not help him in the least. I do not propose to take from anybody anything which they have covenanted to pay. I do not propose to take anything from any charity under the covenants that are at present in existence. There are covenants in existence and I do not propose that they should be withdrawn, made illegal or stopped. For a period of seven years, they will not be interfered with, but such covenanting from now on will not be permitted.

Mr. Costello

I must protest against the implications of the Minister's statement. It would appear from what he has said that it is only the rich man who can afford to covenant. In my personal experience of the cases I have spoken of, it is by no means the rich man who is covenanting. It is the man of comparatively small means, with perhaps a hazardous future in a professional career, who has covenanted and who has taken the risk, knowing that he will be under an obligation to pay a fairly small sum for a number of years but, at the same time, knowing that, by entering into the covenant, he will benefit the charity he wishes to benefit and that it will entail no further call upon himself. I think it is not right that the implication of the Minister's statement, that it is only the rich man who can afford to covenant, should go out. That is not so, in my own personal experience.

The people who want to give a certain proportion of their meagre incomes, who feel that the only way they can do something themselves is—to revert to the case I mentioned— to give a small annual subscription to a society, can take upon themselves the liability of covenanting for a number of years. That covenant is not a very serious or very vital covenant because, if they get into difficulties or if they die, it can be withdrawn at certain stages, but the point I want to make is that the people who are doing that are mostly people with small incomes, and it is incorrect to say that the only people who can enter into a covenant of this kind are people with large incomes. That is not the position at all, and I reiterate that the people who covenant to do this are people of goodwill towards the poor of this city, who are prepared to make a sacrifice for a charity in the knowledge that, while they are covenanting to give a small subscription over a number of years, so long as they are able to do so, so long as they are alive, they know that the effect of the covenant is to benefit the charity, if you like, at the expense of the taxpayer.

Mr. Hickey

If they do it, as Deputy Costello says, even though they are only poor people, do they still save themselves the payment of 6/6 to the State?

Mr. Costello

It does not make the least difference to the person who does it. It is entirely for the benefit of the charity.

Mr. O Ceallaigh

It does to those people who pay surtax.

Mr. Costello

How many people in this State are paying surtax?

Mr. O Ceallaigh

A great number.

Mr. Hickey

It is a great pity the Minister did not reduce the figure from £20,000 to £10,000.

Mr. O Ceallaigh

They are paying heavy imposts in respect of surtax on all incomes over £1,500 a year.

Mr. Costello

Would the Minister give us some calculation as to how much of the £13,000 which it is proposed to save for the State by this proposal, will come from surtax and how much from mere income-tax payers?

Mr. Dillon

It will all come from the charities.

Mr. Costello

Perhaps I should have said: how much of it will come from the subscriptions of surtax payers?

General Mulcahy

That is what makes me shout, and if the Minister can, by shouting or in any other way, make the matter clearer to us, I think it is his duty to do so.

Mr. O Ceallaigh

Might I point out that we will have this matter before us in great detail on the Bill? It is not usual to discuss details at this stage, but on the Bill Deputies may ask as many questions as they like and have the matter discussed in great detail.

General Mulcahy

It ought to be possible to get a clear and simple explanation, and, as we are in Committee, I think we have a duty to get the matter clear. The question has been raised: who is going to lose this £13,000? Is it the charity? The Minister suggested that it is not.

Mr. O Ceallaigh

I did not.

General Mulcahy

I want to put this to the Minister: Either the charities are going to lose £13,000 a year, or the people who, in a systematic way, are supporting charities, are going to be taxed to the extent of a further £13,000 a year, if the charities continue to get from them as much as they are getting at present. Is this a fair statement of the case?

Mr. O Ceallaigh

Yes, subject to qualification.

General Mulcahy

We are asked not to discuss this matter and we are told that we will have plenty of time to discuss it on another occasion.

Mr. O Ceallaigh

I did not say that, but I reminded the Deputy of the usual procedure.

General Mulcahy

I suggest that the Minister should look back over the usual procedure, which is that, when we get shocking proposals placed before us, we characterise them as shocking from the very first. This now is clear that, whatever the details of these proposals are, either certain charities are going to lose £13,000 a year, or the people who continue to give these charities the support they are giving them at present are to be taxed to the extent of an additional £13,000 a year. If the charities, due to the action of individuals or some such reason, lose only £3,000, the people who continue to support them will be taxed to the extent of £10,000 extra for giving the support they are giving, but the loss will fall either on the charities or on those who support the charities in a systematic way, and it is certainly a valuable thing for charities to know that, over a certain period, they are going to have a certain income, that part of their income is secured. That is why I say this is a shocking proposal.

Mr. Bennett

Is the position not, in effect, this, that the charities will lose practically one-third of their covenanted income? The Minister tried to draw a distinction between the poorer man and the richer man, but the poorer man's subscription, such as mine, is of an irregular nature. Sometimes it comes and sometimes it does not, but the income which the Minister is getting at is the income which the charities can count on as a reasonable certainty for a number of years. The Minister is going to take one-third of that. Is that not definitely what the Minister proposes?

Mr. O Ceallaigh

I am going to deprive them of the subsidy from the State.

Mr. Bennett

Of one-third of the income on which they can rely.

Mr. O Ceallaigh

The Deputy may describe it that way, if he likes.

Mr. Bennett

That is, in effect, what it is.

Mr. Belton

Would the Minister not agree to grant relief to income-tax payers to the extent of their charitable bequests? Would the Minister not think it wrong for the Government in the past not to have allowed taxpayers relief to the extent of their charitable bequests? If that relief had been allowed, the result for the State would have been the same as it has been and there would be no application to the State for a refund of the income tax alleged to be payable on the bequests made. Would the Minister not agree that income-tax payers should be allowed to deduct from their net annual income the amount, say £x, which they gave by way of charitable bequests on their getting certificates from such charities that such money was paid, as is done in the case of life insurance?

Mr. Dillon

Is there any use closing our eyes to the patent fact that the charities are going to lose £13,000? That is the net result of this piece of legislation. Is there a Deputy, I crave, on the Fianna Fáil benches who will get up and say that he thinks it is right to balance the Budget with £13,000 by this taxation on charitable contributions? Is there a Deputy on any other bench who will say that that is right?

Mr. O Ceallaigh

There is one, anyway, and he speaks for the others.

Mr. Dillon

They take damn good care they are spoken for.

Mr. O Ceallaigh

They have a good spokesman.

Mr. Dillon

Whatever they have, the charities are going to lose about £13,000. Most of you have gone about begging for charity at one time or another. I have done it, not contributing money of my own but getting it from my neighbours. I must say that I found no more charitable neighbour than the present Minister for Finance but, goodness knows, it is hard enough to raise money for charity. Every penny you can get is very welcome. Very frequently you find that you cannot get money to relieve the urgent distress with which you are confronted. In these circumstances, knowing that to be true, how on earth can we elect to take £13,000 from the charities that are struggling at present? Is there a charity within the knowledge of any of us that is not wrestling with adversity and difficulty in endeavouring to maintain existing institutions?

Mr. Hickey

Some of them are heavily in debt.

Mr. Dillon

Have they not all the experience that contributors are cutting down their contributions in this time of stress and difficulty? It is very hard for the individual contributor to a large charity to envisage the individual cases that have to be relieved. Do we realise that what is really going to happen is that this £13,000 is going to be collected from the individuals relieved by the charity? It is going to be collected in sixpences and eight-pences from people who are receiving relief from the charity. The woman who was receiving 5/- is going to receive only 4/8 and the family receiving 2/- in respect of each child will get only 1/9.

We all have that experience on boards of health. When our estimate is reduced by the county council, a general slash is made. We are told that we must cut down the estimate by, say £8,000, in order to prevent a rise in the rates. What are we driven to do? We take up the relief lists and we say that a woman who was getting 5/- will in future only get 4/8. We try to spread out the cut in the estimate over all the relief cases so as to make a reduction in each case. Have we all gone daft that we contemplate balancing the Budget by taking 2d. and 3d. from each recipient of charity, the destitute poor, in cases of this kind? Surely the Minister is not going to set himself up as such a purist in the revenue law that his soul is seared by the spectacle of a loop-hole in the revenue law which allows an unfortunate recipient of charity to receive 2d. or 3d. that should go to the Exchequer? That is a ridiculous position. His purist's soul revolts at the idea of the twopences going astray and he is going to pursue them into these destitute homes and bring them back where they belong-to the Exchequer. That is a ludicrous position to allow yourself to be driven into. If the case were put to us that there were some gentlemen making a family covenant whereby they escaped liability for income-tax——

Mr. O Ceallaigh

We shall come to that later.

Mr. Dillon

If it is put to me that the income-tax law has to be modified to deal with such people the Minister will have my sympathy but that is a very different thing. Let us try to be human in our legislation. Surely we see a distinction between that type of legislation and a reasonable and human desire not to collect revenue from charity? What matter, if we put the telescope to the blind eye in regard to a trivial leak in our revenue laws if, as a result, some unfortunate person happens to receive 2d. or 3d. more in his allowance from charitable funds. Is it not an infinitely more valuable use of the money than to rake it into the Exchequer to satisfy the vigilance of the Revenue Commissioners? I do not blame the Revenue Commissioners for putting up this cod proposal but I do blame the responsible Minister for coming in here and making a cod of himself by sponsoring it before Dáil Eireann. Every responsible trustee and public servant frequently finds himself in the position that his duty obliges him to stress the letter of the law, no matter how grotesque it may be. That is what the Minister is there for, to distinguish between the letter of the law and the true interpretation of it. Does anybody suggest that the true interpretation of the income-tax law is that we should pursue the twopences and three pences that are distributed in charity and bring them back into the Exchequer so that the revenue may be complete? The Minister says that there is time to consider this matter and to talk of it between now and the Finance Bill. Think.

Mr. O Ceallaigh

I have thought and I am satisfied about this proposal. Personally I claim as much interest in charity and in charitable objects as perhaps any Deputy in the House, not that I subscribe as much to them. I might not have so generous a heart as Deputy Costello——

Mr. Costello

Why bring me into it?

Mr. O Ceallaigh

I might not have as much interest in the St. Vincent de Paul Society or have as long a connection with it, although my connection with it has been fairly long, but, as far as I know the facts, that society is not interested in covenanted subscriptions. There are a few societies which have made a practice of securing subscriptions by this method, and in the last two or three years that practice has grown at a very rapid rate. It is a method I do not like. It is not a fair method. It is the rich man's method of escaping surtax. He is generous if you like; he undoubtedly gives a subscription but he also gets relief to the extent of one-third of his subscription at the expense of somebody else. Let him give £20 if he wants to give it. I should not like to prevent anybody from being generous towards charity. I have examined this myself and I take full personal responsibility in the matter. There is no question of 2d. 4d. or 6d., as far as I know.

Mr. Dillon

Is not that what is going to happen?

Mr. O Ceallaigh

It has not happened, and it will not happen.

Mr. Dillon

Must it not happen if you reduce the amount of the charity subscription?

Mr. O Ceallaigh

This law has been in existence for a long time. So far as I am aware not a dozen of St. Vincent de Paul subscribers have covenanted to do anything in this way. It is not that type of person who does it. Deputy Costello may know somebody, but it is not that type of person who does it. I can give an example. Take a taxpayer whose income is about £3,500 per annum and who has covenanted in the usual form to pay annually to a certain charity such sum as, after deduction of income-tax, will leave £300. He furnishes the charity with a certificate that he has paid £444 8s. 11d., less income-tax at 6/6 in the £ amounting to £144 8s. 11d. The charity reclaims this latter sum from the revenue. The taxpayer saves almost £43 in surtax. The total cost to the State is therefore approximately £187. In the last few years that type of person is becoming alive to this fact, and if we do not put some limit to it, in years to come—I will be dead and gone and will not be Minister for Finance—it will amount to a sum that should not be taken from the State. I think it is not a just proposition that that should continue. Personally, interested as I am to a modest extent in charities and charitable objects and societies, I think it is not a thing that ought to continue.

Mr. Costello

Arising out of what the Minister says, it would appear to me that there is a simple method of avoiding that. I certainly was under the impression—probably erroneously — that when a covenant of this kind was entered into with a charity to continue a subscription for a certain number of years, the entire benefit of that particular remission of tax went entirely to the charity and nobody else. It is on that basis that most people sign a covenant of that kind. So far as they had it in their power, their entire intention was that the remission of tax should go direct to the charity. The Minister says that some surtax payers can get some sort of relief. If that is so, he should bring in a provision that, as long as the charity gets the benefit of this arrangement, then nobody else is entitled to get it, and then I will support the Minister. I am not asking for any remission for any income taxpayer or surtax payer or any other sort of taxpayer in respect of a covenant of this kind. The only thing that I have any knowledge of in practice is the case where people who give subscriptions covenant to continue the subscriptions in the belief that any remission that is lawfully due in respect of the moneys covered by that covenant will go directly to the charity and nobody else. If the Minister wants to change the law in respect of surtax payers I withdraw the objection; but let him have the law in such a way that the charity gets it. If nobody else but the charity gets it, then I cannot see how the Minister can make the indignant case he has made. He is really drawing a red herring across the matter. The substance of it is that charities were getting the relief provided for in this section which it is proposed to repeal. The majority of those who entered into such a covenant —certainly I was, in so far as I have entered into any covenant—were of the opinion that anything that accrued by way of remission of tax went directly to the charity and nobody else. Personally, I have got no relief and it never occurred to me to get any relief. If the Minister thinks the surtax payers get something——

Mr. O Ceallaigh

It is not a question of what I think. It is a question of what the law is.

Mr. Costello

If the Minister is advised that that is the law, let him change the law to make it conform——

Mr. O Ceallaigh

The Deputy did not know the law.

Mr. Costello

There is many a branch of the law that I do not know. I do not set myself up to be an expert in income-tax law. Gibes of that kind cannot do the Minister any good.

Mr. O Ceallaigh

I did not mean it as such. I am sorry if the Deputy took it that way.

Mr. Costello

It sounded rather like it from the introduction of my name in connection with the comparison that the Minister made.

Mr. O Ceallaigh

There was no personal reflection intended.

Mr. Costello

I accept that.

Mr. O Ceallaigh

Will that satisfy the Deputy?

Mr. Costello

If the Minister wants a direct answer, it will not, but I am accepting it.

Mr. O Ceallaigh

Then I can use it again?

Mr. Costello

You can use it any time you like. I am arguing on behalf of charities and not on behalf of taxpayers. I want that to be made clear. I want to repudiate the case made by the Minister for this provision. So far as he has made any case whatever, it is that some class of taxpayer will benefit. I understand that he confines it to the class of taxpayer who pays surtax. That is the only basis on which he has purported to justify the repeal of Section 20 of the Finance Act, 1922. I am prepared to facilitate, and I believe everybody in the House will be prepared to facilitate the Minister in seeing that no taxpayer—income-tax payer or surtax payer or anybody else —gets any benefit by way of remission of tax for his charitable donations. If that is accepted by the Minister, then his entire case falls, if he has no other justification for this. Accepting the proposition I have made to him that nobody wants the income-tax payers or the surtax payers to get any benefit, what is the case for this? I have heard none.

Question put.

The Committee divided: Tá, 65; Níl, 36.

Tá

• Aiken, Frank.
• Bartley, Gerald.
• Beegan, Patrick.
• Boland, Gerald.
• Bourke, Dan.
• Brady, Brian.
• Breslin, Cormac.
• Derrig, Thomas.
• De Valera, Eamon.
• Everett, James.
• Flynn, John.
• Flynn, Stephen.
• Fogarty, Andrew.
• Fogarty, Patrick J.
• Friel, John.
• Fuller, Stephen.
• Gorry, Patrick J.
• Harris, Thomas.
• Hickey, James.
• Hogan, Daniel.
• Humphreys, Francis.
• Kelly, James P.
• Kelly, Thomas.
• Kennedy, Michael J.
• Killilea, Mark.
• Kissane, Eamon.
• Lemass, Seán F.
• Little, Patrick J.
• Loughman, Francis.
• Lynch, James B.
• McCann, John.
• MacEntee, Seán.
• Meaney, Cornelius.
• Briscoe, Robert.
• Buckley, Seán.
• Carty, Frank.
• Cleary, Mícheál.
• Cooney, Eamonn.
• Corish, Richard.
• Crowley, Tadhg.
• Moore, Séamus.
• Moran, Michael.
• Morrissey, Michael.
• Moylan, Seán.
• Mullen, Thomas.
• Munnelly, John.
• Murphy, Timothy J.
• O Briain, Donnchadh.
• O Ceallaigh, Seán T.
• O'Grady, Seán.
• O'Loghlen, Peter J.
• O'Reilly, Matthew.
• O'Rourke, Daniel.
• Pattison, James P.
• Rice, Brigid M.
• Ruttledge, Patrick J.
• Ryan, James.
• Ryan, Robert.
• Sheridan, Michael.
• Smith, Patrick.
• Traynor, Oscar.
• Victory, James.
• Walsh, Laurence J.
• Walsh, Richard.
• Ward, Conn.

Níl

• Belton, Patrick.
• Bennett, George C.
• Benson, Ernest E.
• Brennan, Michael.
• Browne, Patrick.
• Burke, Patrick.
• Byrne, Alfred (Junior).
• Cole, John J.
• Cogan, Patrick.
• Cosgrave, William T.
• Costello, John A.
• Curran, Richard.
• Daly, Patrick.
• Dillon, James M.
• Dockrell, Henry M.
• Doyle, Peadar S.
• Fagan, Charles.
• Fitzgerald-Kenney, James.
• Giles, Patrick.
• Hughes, James.
• Keating, John.
• Lynch, Finian.
• MacEoin, Seán.
• McFadden, Michael Og.
• McGilligan, Patrick.
• McGovern, Patrick.
• McMenamin, Daniel.
• Mongan, Joseph W.
• Mulcahy, Richard.
• Nally, Martin.
• O'Donovan, Timothy J.
• O'Sullivan, John M.
• Redmond, Bridget M.
• Reidy, James.
• Reynolds, Mary.
• Ryan, Jeremiah.

Tellers:—Tá: Deputies Smith and Kennedy; Níl: Deputies Doyle and Bennett.

Resolution declared carried.