Dáil Éireann debate -
Wednesday, 25 Jun 1941

Vol. 84 No. 2

Committee on Finance. - Finance Bill, 1941—Report Stage.

Mr. McGilligan

I move the amendment standing in my name:

In page 11, to add at the end of Section 18 two new sub-sections as follows:—

(2) Sub-section (2) of Section 24 of the Finance Act, 1926 (No. 38 of 1926), is hereby repealed, and in lien thereof it is hereby enacted that for the purpose of this section the amount of a bet shall be taken to be the sum of money which by the term's of the bet the licensed bookmaker will receive, retain or take credit for if and when the event the subject of the bet is determined in his favour.

(3) Where by the terms of a bet (not being a bet exempted from duty under the provisions of Section 20 of the Finance Act, 1931 (No. 31 of 1931) ), a sum of money is wagered on the result of a horse race on the condition that if the said race be determined in favour of the person making the said wager the sum of money originally wagered is in whole or in part to be wagered on a later race, duty at the rate of seven and one-half per cent. shall be charged, levied and paid only on the sum of money originally wagered.

To a certain extent, both sub-sections are on the same point, and in so far as. they are hot on the same point——

An Leas-Cheann Comhairle

You are discussing both together?

Mr. McGilligan

Yes. The aim of the first new sub-sections proposed to be put in is, I think, fairly dear. It makes a slight amendment in the phraseology of Section 24 of the Finance Act, 1926. There a bet is defined as being "the sum of money which, by the terms of the bet, the bookmaker will be entitled to receive", and so on. I am seeking to put in that the bet will be deemed to be only the sum which the bookmaker will receive if the -bet is determined in his favour. The point I am at is this: for some years past the Minister knows that bookmakers as a whole have borne the tax. The fact that they bear the tax means that they pay on all bets that come into their office, whether they win or lose. A person comes in with a stake, and that is regarded as a bet. If that client wins, they do not subtract anything from his winnings. They are in the position that, win or lose, they have to meet the amount of the duty. I am suggesting to the Minister that he might take this as a half-way house— as I suggested to him before — and drop the whole thing. It possibly may reduce the amount which he hoped to get from the tax. But it possibly may not have that effect, because the Minister knows that in a particular year when the bookmakers made the change to bearing the tax themselves the revenue shot up by about £25,000.

I do not think — I have not looked into it very accurately — that there was anything in the times that we had which would account for that increase; I think the whole or the greater part of the increased revenue derived from the tax must be attributed to the fact that, by bearing the tax themselves, they induced a certain extra number of clients into their offices and got a certain bigger amount of business done. It is possibly a gamble with the Minister. He may lose a little of the £25,000 which he thinks he is going to get. But he may not. If the bookmakers have to put this tax back upon their clients — they tell me that that will be the situation — then I suggest that the revenue likely to be derived from the increased tax is going to go down.

The Minister has already given figures to show that in two years the tax has gone down from about £200,000 to about £100,000, so that it is now just at the point of being halved. Of course, with racing still on the decline, and with racing days likely to be stilt more seriously curtailed on the other side and possibly curtailed here — the absence of fodder will probably bring about a fairly serious change in racing —the Minister is not going to have the same number of days' racing, and if there is not the same number of events there is not going to be the same amount of money wagered. As the Minister, possibly, has been informed, clients do not often win, so that the greater portion of the money wagered would still bear tax.

Minister for Finance (Mr. O Ceallaigh)

One in three, I think, they are supposed to win.

Mr. McGilligan

That is optimistic. One in three?

Mr. O Ceallaigh

So I am told.

Mr. McGilligan

I did not think it was anything like that. The second sub-section here is a fumbling attempt to put into parliamentary language a thing that everybody knows, but under another name. It is what is called the "if to credit" bet. I understand that originally, when this duty was put on, the Revenue Commissioners exacted duty on every bet, or everything that was deemed to be a bet, made by a client. For instance, a client comes in with a sum of money and wagers it on that system, and the Revenue Commissioners are apt to regard that as two bets. They take the original stake and they take the multiplication of it, if and when the wager is successful; they take that twice. On what are called the "if to credit" bets, when not the bet and the winnings are carried forward but when only the original stake is carried, forward, they still call that one, two or three bets, according to the number of times it is carried forward I understand that some time ago a compromise was arrived at whereby the double or treble was no longer counted, but the "if to credit" bet is still counted as one, two or three bets, according to the number of placings of it. Of course, there is a certain amount of logic in it. I suppose the Revenue Commissioners argue that the man who is going to put his stake on a horse has it at the back of his mind that he is keeping the winnings and putting the original stake on another horse, and so on. They would say that if this man could stand at the book-maker's counter, when those events turned up successfully he would push the money across the counter a second or third time, and on that account it is argued that it should be reckoned as two or three bets. But, of course, that is not the way it is done. It is put in as a single bet. The man puts on his money, and disappears from the office, and, if he loses, he is not going to make a second or third bet; that only happens in the event of his winning. I do not know whether or not the amendment, from the point of view of draftsmanship, catches the point, but, at any rate, it makes it clear that, on this thing called an "if to credit" bet, duty at 7½ per cent. should be levied, not on, say, if that is run three times, but only on the stake money as originally put down. I had no statistics to guide me in this matter. I do not know what amount of the bets that are put on at the starting price at the bookmakers are of this type, but I understand that a fairly large proportion are put on in this way.

Mr. O Ceallaigh

10 per cent.

Mr. McGilligan

Well, then the sacrifice is not such a lot, and it is a point which might ease the situation for some of those people. I would ask the Minister to accept both those sub-sections, or at any rate to take the second amendment.

Mr. O Ceallaigh

I am afraid I cannot do so. In view of what I am told would be the probable loss in this year and in a full year, I cannot accept the amendment. It is estimated for me that the loss arising out of the first part of the amendment which the Deputy proposes would, in a full year, amount to £33,000, and in this year would amount to £20,000.

Mr. McGilligan

I thought the whole tax was only to bring in £25,000 this year?

Mr. O Ceallaigh

The additional 2½ per cent.

Mr. McGilligan

It was to bring in £25,000?

Mr. O Ceallaigh

£26,000. The total yield from the betting tax for this year was estimated at £105,000.

Mr. McGilligan

What is the total estimate for a full year?

Mr. O Ceallaigh

In the last year I think the figure was £165,000.

Mr. McGilligan

I thought it was £103,000 on the 5 per cent.?

Mr. O Ceallaigh

1940 was not a full year. It was £219,000 in what we may regard as the last full year before the decrease in racing.

Mr. McGilligan

I am talking about present conditions.

Mr. O Ceallaigh

In 1939-40 it was £169,000; in 1940-41 it was £104,000, and I think the estimate for this year was £105,000.

Mr. McGilligan

And then it is expected that in a full year this 7½ per cent. will yield——

Mr. O Ceallaigh

£119,000. This year we expect the loss would be £20,000 if that first part of the amendment were accepted. If the second part of the amendment were accepted, the loss would be £7,500, and would wipe out more than I expect to get out of the full revenue from 2½ per cent. this year.

Mr. Dillon

The Minister would not think of giving him a cheap one?

Mr. O Ceallaigh

I think the Revenue Commissioners' attitude there is a logical one. If the man were free to stand by the counter and get the result of his bet he could put the money back again, and it would be a second bet.

Mr. McGilligan

If he did it.

Mr. O Ceallaigh

That is true — if he did it; but he is not there.

Mr. McGilligan

But, on the Minister's own statistics, the man goes in knowing that twice out of three times it will not be carried forward.

Mr. O Ceallaigh

A number of them stand outside and wait.

Mr. McGilligan

If they do, that is not a credit bet.

Mr. O Ceallaigh

No, they may even put it on their docket and go in on chance to see, if they are free to go out of their offices or workshops. I take it, however, that credit betting is by people who are in their offices or workshops and cannot afford to stay in the betting offices, and they make their bet through another party. Whether or not it is a credit bet, it is a bet; and I think it would be illogical to say that a credit bet is not a bet. I have read many documents regarding this. I got a new document this evening. J have read very carefully the various petitions and documents I have got. This is from the Starting Price Turf Accountants' Protection Association of Eire. Judging by the figures they have put up, they will be hard hit, and have been hard hit, owing to the reduction in the number of days' racing. Of course, there are many other people hard hit, and many who have been taxed — and heavily taxed. Perhaps, if this war ^continues, they will be taxed more heavily still. They are not treated in an exceptional way. They have tried to make a case that the tax on them is much heavier in proportion than that on any other class of business or profession. I do not see that. It is a kind of luxury trade — I am sure it could be described as such — one that is not necessary to the life of the individual. Of course, a reduction in this business, as they say, possibly means a reduction in the number of the staffs, but that applies to every branch of business, industry and profession in these times. In the circumstances, I am afraid I cannot afford to forego the additional money that J seek out of the tax this year.

Mr. D. Morrissey

The Minister has said these people were not being made suffer more than any other section of the people, that they were not being treated in any exceptional or unfair way; and he went on to say that this was a luxury trade, and so on. Might I remind him that they are being treated in a rather exceptional way and that, as a matter of fact, it was only as an afterthought — and perhaps not so much an afterthought but only because something else happened — that this extra 2½ per cent. was put on this particular body at all. The Minister talks about luxuries: the people who were relieved of the 2½ per cent., at the expense of the people we are now dealing with, can be described just as easily as being in a luxury class. As a matter of fact, if I may be allowed to say so, they cater for people more accustomed to luxuries and — so far as it is known in this country — luxurious living than the people we are now asking to bear this 7½ per cent.

Mr. O Ceallaigh

Not necessarily so.

Mr. D. Morrissey

In so far as it is a luxury at all, I believe there are more people of that class amongst those relieved from paying the 2½ per cent. than amongst the people who will be called upon to pay the 2½ per cent. I put it to the Minister that this was an afterthought — not something calmly thought out in the Castle by the Revenue Commissioners when the Budget was being prepared. The Revenue Commissioners, having weighed all the pros and cons and gone over the figures for receipts during the last five or six years, and having taken into full account the number of race meetings now as against the number last year or the year before, and then, in their cold, impartial and judicial way, having said this was where the money could be got, decided that, though it would place an added burden on some people, they would have to place the burden somewhere. I think it is a little late in the day for the Minister to come in and say that these people are not being treated in any exceptional way. I say they are. This 2½ per cent. is being taken off certain sections —whether that was wise or desirable or just is not for me to say — and it is being put on other sections because it had to be put somewhere.

Mr. O Ceallaigh

I admit that it was not the original thought. The first suggestion that this was the more just body on which to put the tax came from Deputy Cosgrave.

Mr. D. Morrissey

Now, the Deputy explained that he was not fully informed.

Mr. O Ceallaigh

He led me up the garden.

Mr. McGilligan

Another word or two on those lines, and I will call for a division and see who will vote for it.

Mr. O Ceallaigh

We are prepared for that.

Mr. McGilligan

I want to let Deputy Fogarty and a few like that off.

Mr. O Ceallaigh

It is not a Party question.

Mr. McGilligan

It is very like it.

Mr. O Ceallaigh

No, it is not. I would like to disabuse the Deputy's mind of that, in all seriousness. Deputy Cosgrave was the first person who mentioned it and, as he knows a great deal more about racing than I do, I took serious notice of what he said. I asked my officials about it and they said he made a good case on the question of interference with Irish racing, and it was on that basis the tax was dropped before. That was the case made to me by Deputy Cosgrave, and others backed it up in the House. He spoke witn a knowledge that I confess I do not possess when he made that suggestion to me. After all, he is a knowledgable man arid the Leader of the Opposition and — I do not know whether Deputy McGilligan believes me or not —I do take serious notice of suggestions made from the Front Opposition Bench on any point.

Mr. McGilligan

The Minister cannot nave read what was said by Deputy Cosgrave the last day.

Mr. O Ceallaigh

I did, of course, and am quite prepared to accept what he said the last day — that he himself was not fully informed and that, if he had all the information he has now, he would not have made the suggestion. But I had adopted the suggestion in the meantime. The same suggestion was made to me from other quarters outside the House, and from betting men in substantial businesses. The same suggestion was made to me by betting men who bet on the course and off the course. Deputy Fogarty introduced the deputation, but the rest of them I did not know except one whom I think I met somewhere at some time. I am told they were men of substance among the betting fraternity. They reluctantly accepted this suggestion; they did not encourage me to accept it but they said: "If you have to put on an additional tax that is the way to do it."

That is how this suggestion came about. We are losing something by it I think about £8,000 altogether. We will probably get about £8,000 less from this method than from the former one. I was prepared to do that because I was anxious to meet tike men, and I thought I was meeting them fairly. I did not know that there was a big body of people outside that association that I received. In fact, there was no association before that. This Starting Price Association, I think, only came into existence as a result of the putting on of the tax.

Mr. McGilligan

No. Deputy Fogarty was doing the "welsher" on them.

An Ceann Comhairle

I understood the Deputy to use the word "welsher". It is an objectionable word.

Mr. McGilligan

I am not applying it in the racing sense. If it is thought to be offensive, I withdraw it.

An Ceann Comhairle

The Deputy should withdraw it.

Mr. McGilligan

Then I withdraw it. Amendment, by leave, withdrawn.

Question —"That the Bill be received for final consideration"— put, and agreed to.

An Ceann Comhairle

When will the Fifth Stage be taken?

Mr. O Ceallaigh

Might I have the Fifth Stage now?

Mr. McGilligan

No, I should like to contrast the bookmakers and the profiteers at a later stage.

Mr. O Ceallaigh

To-morrow then?

Mr. McGilligan

I should like to have that discussed by the Whips.

An Ceann Comhairle

Provisionally for to-morrow. Some date mast be fixed.

Fifth Stage provisionally fixed for Thursday, 26th June.