I move amendment No. 7:
Before section 12, but in Part 1, to insert a new section as follows:—
"(1) Subject to the provisions of this section there may be deducted from the emoluments of any office or employment to be assessed to tax, if defrayed out of those emoluments, any annual subscription or membership fee paid to a body of persons approved for the purposes of this section by the Revenue Commissioners.
(2) The Revenue Commissioners shall, on the application of the body, approve for the purposes of this section any body of persons, not of a mainly local character, whose activities are carried on otherwise than for profit and are solely or mainly directed to all or any of the following objects, that is to say—
(a) the advancement or spreading of knowledge (whether generally or among persons belonging to the same or similar professions);
(b) the maintenance or improvement of standards of conduct and competence among the members of any profession;
(c) the indemnification or protection of members of any profession against claims in respect of liabilities incurred by them in the exercise of their profession."
This amendment springs from the previous one. It endeavours to give effect to the principle of the previous amendment in a very minor respect. The purpose of the amendment is to permit the taxpayer engaged in business, who is a professional person, to charge up against his emoluments for tax purposes any subscription which he pays to a professional association, or body, of which he is a member. As I said on the last amendment, it is extraordinary that a young engineer or an architect say, who is a member of the Board of Works, or any other member of the considerable community of professional people engaged in employment, cannot claim as an allowable expense for tax purposes the subscription which he pays to a professional association, non-payment of which will mean that he will be struck off the professional register with the result that he will no longer be able to practise his profession. It springs from the rigid nature of Rule 9 about which we were speaking. This is the Rule so strongly condemned by judicial authorities and by the Royal Commission.
In relation to the previous amendment, the Minister was able to say that the British Chancellor had not acted upon the recommendations of the Royal Commission on Rule 9. He cannot say the same in relation to this amendment. The Minister, I am sure, is aware that the wording of the amendment is in fact borrowed from the British Finance, Act, 1958. I make no apologies for borrowing a section like this from the British precedent, because the Minister himself does it every year. Last year, we had an amendment to our Finance Bill which ran to two of these sheets and was taken in full from the British precedent.
In a broad sense, it is undesirable that we should be so much in the hands of the British in relation to these matters. It indicates that we fail to strike out on our own and adapt the tax code to our own purposes but in another sense, it is inevitable and in the very nature of things that so long as we continue to operate under the British Income Tax Act, 1918, we will have to remedy whatever defects come to light and are rectified by the British Chancellor.
Because of the rigid nature of Rule 9, the technical argument has been that an employed person paying a subscription to his professional association does not incur that expense in the performance of the duties of his office, which is absurd and quite unrealistic. There is a growing number of professional persons in employment, generally speaking, the class of person for whom it is desirable to provide every possible encouragement and independence; the class of person who stands on his own two feet and does not look to the State for this or that; the class of person who is, in fact, the backbone of the community.
I regret that the Minister did not accept the previous amendment, but I will concede at least that he was able to say that notwithstanding the report of the Royal Commission, the British Chancellor took no action in that matter. He cannot say that on this amendment, which is simple and straightforward. It does not provide for allowance for tax purposes of membership fees or subscriptions paid to any body of persons who may be self-appointed as a professional association. It restricts the allowance to a body of persons approved by the Revenue Commissioners as complying with certain conservative provisions laid down. In subsection (2), it is restricted to a body of persons whose activities are carried on otherwise than for profit, for the purpose of the advancement or spreading of knowledge and the maintenance or improvement of standards of professional competence and behaviour.
There can be only about 20 or 25 such bodies in this country. I think I read somewhere that, in Britain, after this provision was introduced, 3,000 bodies came to light which claimed this concession for their members. There is no possibility of such a number of applications in this country. There is, perhaps, one slight defect in the amendment in that it does not lay down any machinery for appeal against a decision of the Revenue Commissioners, but, on that score, I feel confident that the general provisions of the Income Tax Act will apply, and an appeal from a decision of the Revenue Commissioners in this matter would lie, in the first instance, to the Special Commissioner for Income Tax, and the usual provisions of a case stated and an application to the courts would be held to apply.
The amendment is very reasonable and very conservative and I hope the Minister will see his way to accepting it.
