No. The holder receives his £125,000 and that is paid to him under deduction of tax, the tax having already been paid-£65,000. However, so far as that is concerned, that is a much more technical part of the subject that I propose to argue in much greater detail on the Committee Stage of the Bill. It is in relation to sub-section (2) of the Resolution and the retrospective effect of it that I want to address myself and to endeavour to persuade the Minister that retrospection in this connection is one of the most damaging things that could be done to the whole financial structure of the State. We are trying to get external capital in. No one will ever come into this country if he feels that there is a prospect of retrospective tax law. The Minister, when he was speaking, made it perfectly clear that what has been done is legal. If the law requires to be changed as from to-day, as it was changed in Resolution No. 3 in respect of the remission for an Irish-language film to cinemas, then that is a question which we can argue on the merits of the change but there can be no argument of any sort, kind or description that would justify the retrospective element that there is in part (2) of the Resolution.
I think that even a case of retrospective tax law of that sort is contrary to the Constitution and it would be upset under the Constitution.
Whether it is or is not constitutionally correct, for any Government to bring in tax retrospection undermines the whole confidence in civilised Government. For the purpose of discussing part (2), it does not matter in the slightest whether the Minister is 100 per cent. right on the merits of part (1). Certain people have done things that were absolutely lawful and because the Minister and I, if you like, as his predecessor, did not wake up in time to an amendment that it was thought should be introduced into the law, these people have carried out the law and now the Minister wants to wreak vengeance on them. That is not the way to carry on business; that is not the way to instil confidence; and certainly it is not the way to get anybody to come into this country with foreign capital for the establishment of business.
This is the beginning of the slippery slope. It has been brought in here, perhaps, because the Minister and his advisers feel that it would be unpopular to defend stripping dividends and therefore they can get away with it. I do not know enough about the practice to know whether it should be popular or unpopular, but I feel sure that is why it is put in here. Once you start on the principle of retrospection in relation to taxation, there is nowhere you can stop. Whether the Minister has his own mind made up, or whether this whole House has its mind made up, as to where retrospection should stop, you will never persuade other people that is so.
Once you start on this, one businessman after another will say to himself: "There is no use my taking certain steps to expand my business. It is perfectly legal as it is, but next year the Minister may come along and penalise me for doing it and put me under a charge for tax which I did not think I would have to pay under the existing law and that I did not have to pay under the existing law." Supposing a liquidator is involved. Supposing in pursuance of the present legal position, an accountant of repute —and there are half a dozen firms in Dublin who are well known as accountants of repute-was the liquidator of one of those companies and has distributed its effects, in accordance with the existing law and fortified by the advice of counsel, it means under this Resolution that that man is personally liable for making good, because the tax law has been changed retrospectively from what it was when he carried out the transaction in accordance with the law.
This matter was discussed across the water and there the Minister's counterpart, the Chancellor of the Exchequer, had a very different case to make. He made the case that he gave notice two years ago that if any attempt was made to sidestep his pronunciamento at that time he would block it as from that date. It then became clear to him there was considerable doubt as to whether the announcement he had made was sufficiently clear on its face and in its terms and because of the principle involved in tax retrospection, he abandoned the retrospective aspect of his section. Here the Minister has no such excuse.
So far as I am aware the Minister never referred to this matter in public at all until the Resolution appeared on the Order Paper. I would ask the Minister to correct me in that if I am wrong. I think there was never any such suggestion made at any time, until the day before yesterday, that this practice was to be changed and that anybody who had taken advantage of the law as it was would get the position varied so that the law as it was at time of his action was not the law at all.
I certainly never made any reference to it. I do not think Deputy MacEntee, when he was Minister for Finance, ever made any reference to this process and I do not think Deputy McGilligan, when he was Minister for Finance, made any reference to it, either. It is perfectly clear to me there never has been any suggestion by any Minister for Finance that such a practice was one that he was determined to block and that if clever people found a way around the block age proposed at that time, he would make sure that the loophole in the legislation was closed, and closed with retrospective effect. There is no, excuse for this except convenience, the convenience to the Minister and the convenience to revenue—I mean the tax revenue of the State, not the revenue personnel—and that will be vastly overshadowed by the damage that will be done.
I venture to say that when this sub-section is known—if the Minister does not change his mind and I believe he will—not one single foreign industrialist will ever come into this country again and invest his money in it. I have experience in my professional capacity, and other members of the House have experience in their professional capacities, of meeting people who come in here and want to consider setting up industry here. One thing I am always asked is what is the taxation position and on innumerable occasions I have been asked: "Is there any danger of the taxation position being changed retrospectively?" We have always been able to hold our heads high in Ireland and been able to say that we did not believe in doing that. We took the line that if we required to amend the laws, the laws would be amended with effect as from that date, but that we would not take the position in which people would be enticed here, and having been enticed, would then be, so to speak, hit on the head and hit in their pockets with retrospective legislation, so that, in relation to taxation, something that was perfectly legal was made illegal in order that the Minister could collect the few pounds involved. I do not know how much is involved. I accept the Minister's word that in these cases it is not going to be worth while unless the sum is substantial.
Nothing can justify the principle contained in clause (2) and I venture to say there is not a single person engaged in business who would not tell the Minister the same thing, that what he will get out of this sub-section (2) will be an insignificant trifle compared with the damage he will do to the whole confidence and structure of the State, and particularly that his colleague, the Minister for Industry and Commerce, may write off completely any prospect of getting in external capital and that we might as well wind up the Industrial Development Authority.