Financial Resolutions. - Resolution No. 2—Excess Surtax.

I move:—

(1) That, notwithstanding anything contained in the Finance Act, 1940 (No. 14 of 1940), and subject to the provisions of this Resolution, where the total income of any individual for the year beginning on the 6th day of April, 1940, exceeds one thousand five hundred pounds and includes profits from any trade or business to which this Resolution applies carried on by him either solely or in partnership with another person or other persons, an additional duty of surtax (in this Resolution referred to as excess surtax) shall be charged for that year at the rate of seven shillings and sixpence in the pound in respect of so much of the said income as is equal to whichever of the following amounts is the lesser, that is to say:—

(a) the amount by which the said profits exceed the standard profits as defined by statute, or

(b) the amount by which the said total income exceeds the standard total income as defined by statute.

(2) That this Resolution applies to every trade or business carried on (whether continuously or discontinuously) in the State, either solely or in partnership with another person or other persons, by an individual resident in the State, excepting and excluding husbandry and any office or employment, and also excepting and excluding any profession the profits of which are dependent wholly or mainly on the personal qualifications of the person or persons by whom the profession is carried on and in which either no capital expenditure or only capital expenditure of a comparatively small amount is required, but including the business of a person taking commissions in respect of transactions effected or services rendered, and also including the business of an agent of any description other than a commercial traveller or other agent whose remuneration consists wholly of a fixed and definite sum not depending on the amount of business done or any other contingency.

(3) That the profits from a trade or business to which this Resolution applies shall, for the purposes of excess surtax, be computed without regard to the provisions of paragraph (3) of Rule 6 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, or the provisions of Section 14 of the Finance Act, 1929 (No. 32 of 1929).

(4) That in this Resolution the expression "total income" means the total income from all sources computed without having regard to the provisions of Section 34 of the Income Tax Act, 1918, but with due regard, as respects the profits from a trade or business to which this Resolution applies, to the provisions of the next preceding paragraph of this Resolution.

(5) That such provisions, qualifications, exceptions, and reliefs and in particular such provisions in relation to the calculation of standard profits as shall be prescribed by statute shall apply and have effect in relation to excess surtax.

Can the Minister give us a little more information about this Resolution?

It is the Resolution that implements the proposal with regard to excess surtax, subject to certain conditions, in excess trading profits by individuals.

Will the Minister say what is the net effect of it? He has not brought it exactly into line with regard to the statement on the surtax of companies. He applies this additional surtax from the 6th April, 1940.

The additional excess surtax.

Yes. Could the Minister say exactly how it is going to be operated?

The same methods will be adopted as are adopted for the corporation profits taxation. This applies the same principles, that are set out in the Corporations Excess Profits Tax Resolution, to private individuals.

As I understand it, there was a previous limit of about £5,000. I think that in view of the importance of this taxation, and particularly in view of its relationship to the taxation that is going to come on companies, in the same way, it would be useful if we had a clear statement on this.

We shall have it in full detail on the Bill. It is not usual to enter into it in detail at this stage.

I submit to the Minister that in presenting the Estimates now to the House, in order to put Deputies in a position to come back on Report Stage and discuss them intelligently, it is on this particular stage that we expect from the Minister a statement as to what exactly the proposal is and the details of it, so that we can see the Ministerial statement on the proposal at length in the Dáil Debates and thereby be in a position to understand the matter clearly and discuss it intelligently.

But we would be departing from the usual practice with regard to Resolutions of this kind, which has been not to debate them in detail.

I submit that it has been the practice for the Minister to give a simple explanation of the Resolution.

I have done that. I have given a simple explanation.

Well, I challenge any Deputy sitting behind the Minister to tell us what the effect of this Resolution is going to be.

It deals with excess surtax with regard to individuals. I shall give the Deputy and the House a very full explanation on the Committee Stage.

I submit that that is putting the House in a very awkward position, because we have to take the statement of the Minister and to take these Resolutions and then be prepared to come in and discuss them intelligently.

That is true, and this has been the usual practice.

I submit that, on the contrary, when the House desired to get an explanation of a Resolution on the day on which it was placed before the House, the House invariably got that explanation.

I explained it in the Budget speech as much as it has been usual to explain these Financial Resolutions at this stage. However, this much, which I shall read out now, may be useful, as it is the part which I proposed to give to the House on the Committee Stage. The statement is as follows:—

"Surtax is charged on any individual whose total income exceeds £1,500 at rates which increase at each step of the income. The rates in force for 1931-32 to 1937-38 were increased for 1938-39 by 10 per cent. in the case of incomes between £3,000 and £8,000, and by 15 per cent. in the case of incomes over £8,000. For 1939-40 the increase of 15 per cent. was altered to an increase of 20 per cent. as regards incomes in excess of £20,000. The rates rise from six pence in the £ at the bottom of the scale to 7/6 in the £, the higher rate being charged on the amount of income in excess of £20,000. The proposed extension of surtax is to charge excess surtax at the rate of 7/6 in the £ on the part of the income representing increased profits of a trade or business carried on by the individual, in so far as the increase is reflected in his total income."

Question put and agreed to.