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Dáil Éireann debate -
Wednesday, 4 Jul 1962

Vol. 196 No. 9

Finance Bill, 1962—Committee Stage (Resumed).

Question: "That Section 6 stand part of the Bill," put and agreed to.
Question proposed: "That Section 7 stand part of the Bill."

Perhaps I could have some enlightenment for the benefit of travellers coming in here. What are the present concessionary arrangements in relation to travellers bringing things into this country, first of all, as regards people who do not live here and who are bringing in presents for the people with whom they propose to stay and, secondly, the people who live here and are bringing back things which they have bought either on the Continent or in Britain? I think there is also an additional concession in respect of America.

Apart from the concessions allowed here, I wonder is the Minister aware whether the same concessions are general in other countries as well and particularly across the water for travellers going to Britain, that is, whether the arrangements are reciprocal or unilateral?

There is a practice growing up that Irish people can bring back presents up to a value of £5. A foreigner would be allowed more than that.

Is the £5 restricted to any one type of thing or can a person coming from France bring in a bottle of brandy?

In the case of dutiable goods, it is one bottle of spirits or 200 cigarettes.

Are those arrangements reciprocal with other countries?

They are as reciprocal as most countries' arrangements are.

I saw a scandalous case in Britain recently where a girl had a half-bottle of whiskey taken from her.

They are more prudish there than we are.

The Minister mentioned £5. Do I understand that a person is entitled to bring in £5 worth of spirits?

Five pounds worth altogether. There is a limit on spirits and tobacco.

How does it apply then?

£5 would be the limit for all goods.

Would the Minister state what amount of clothing can be brought in?

Five pounds worth.

Without any duty?

Yes, but they must be declared, of course. That is where many people get into trouble.

This whole matter should be reviewed. I know a lady who visited London recently and bought a new coat and who had to pay duty on it when she returned to Dublin, even though she was wearing and needed it. I would like to have the Minister's view on such a matter. If I go to London and I get a new outfit, as happened in this case, is that liable to duty when I return here, even though I am wearing it? It has happened on a number of occasions.

I should like to support Deputy Murphy in this matter. It is a fact that when Irish people working in England bring their parents over for a holiday, they like to treat them well. It is commonplace for a chap working in England to buy his mother a new coat or a new outfit when he brings her over there. These unfortunate working people can ill-afford to pay the duty or have these goods seized when they return. In Dublin Airport, as Deputies are aware, there has been a very considerable tightening up. At Christmas time especially, surely it is not right that the Revenue authorities should act the role of Scrooge in depriving people of their Christmas presents?

I am surprised at the trend this debate is taking. It reminds me of an amusing case some time ago when a person was going to England for a celebration in her family and decided that she would be the be-all and end-all of fashion by buying a coat when she arrived in London. Imagine her surprise when she did not have to pay duty on coming back to Dublin because she discovered that the article was actually made in Dublin.

We have been building up a very big export trade in clothing here and Irish goods are now regarded in London as being better finished and of better quality than their counterparts made in England. Any Deputy who would encourage people to buy clothing in England and thus keep Irish workers out of employment should be ashamed of himself, particularly the member of the Labour Party.

It is all right for Deputy Lemass to talk because when he goes to England, he is armed with a cheque book, but I have in mind a number of people who have no cheque books and who are not in a position to buy first-class clothing at home. A lady went to England recently to the wedding of a member of her family. She was presented with a coat for the occasion by members of her family, possibly because they did not consider her clothing good enough. When she came back to Dublin, some official of the Revenue authorities asked her where she got it. As it had been bought in England, she had to open her purse and pay out the few pounds she had, even though she explained the position.

She could have bought it as good here.

Deputy Lemass can buy what he likes but I think that on such an occasion the duty should be remitted. I intend taking up this case with the Minister. I have great respect for the Minister in so far as dealing with cases like this are concerned and I have no doubt that he will remit the duty even though it is not a function of his. That type of action by the Revenue authorities is not warranted.

First of all, Deputies should remember that it is wrong to blame the Revenue Commissioners or their staffs. They are carrying out the law and if there is anything not right with the law, we should change it. The Revenue Commissioners are compelled to carry out the law as it stands. This concession, however, has grown up over a long period. I remember years ago you were allowed to take 200 cigarettes in and out. That more or less lasted. For a long time also, if you had a bottle of spirits, you had to have a drink out of it in order to get it in. It had to be broken. You did not like to pour it out, so you had a drink instead. That has grown up by custom. The Revenue Commissioners cannot go further than that, unless we change the law. If there is anything wrong, therefore, we must blame ourselves here. The custom now is that a person coming back from England can bring £5 worth of articles and get them in free, provided he declares them. I very often get letters from Deputies and others complaining about being charged and in practically every case, the article was not declared. In fact, in many cases, it was denied. That is what led to all the trouble.

Might I ask the Minister to look with particular sympathy on the importation of old clothing and shoes from our emigrants abroad to their loved ones, since gifts of this kind are particularly welcomed by the poorer families in the community? Might I ask the Minister what the law on this is?

Did the Minister say that the concession of taking out 200 cigarettes has lapsed?

The British authorities do not object to 200 cigarettes, as far as I know.

Do customs officers use any discretion in regard to regular visitors who travel, perhaps, monthly and in respect of persons who perhaps visit a member of their family once a year and who may bring back some article of clothing given to them as a gift by members of their families? Are the regulations applied rigidly in each case? Surely there should be some discretion on the part of the customs officers? Surely it was unfair to ask a person more than 200 miles away from home to open her purse and pay out or else have the coat taken off her back? In this case, there was no question of denying the purchase of the item concerned. In fact, when asked if she purchased anything, she replied, "My coat." This is not on a par with the cases mentioned by the Minister earlier where there were denials and an endeavour to bring in the goods illegally. If the Revenue authorities have not the discretion I referred to, they should have it. More leniency should be extended to the person on a visit perhaps once a year than the person who is a regular visitor. Is there anything in this Bill to give discretion to an officer in such cases?

There is no reference to that at all in this Bill.

In the next session most Deputies will put down questions about Christmas presents. Most parents find it impossible to accept the average Christmas present to their children from America and Britain. Is there any mechanism to allow the admission of bona fide Christmas presents for a limited period?

There is nothing in the law to deal with these things. Again, it is customary to allow in a certain amount. What we are dealing with here are goods coming by post or by boat.

I was hoping to hear the Minister reply to my plea in regard to restrictions on the importation of old clothing.

I am sorry. The Minister for Industry and Commerce has always taken a very strict view in that matter of second-hand clothing. I would prefer if the Deputy would get on to him for his views on that point. The Revenue Commissioners administer the law as it stands. That is all they can do.

Could the Minister say is there any ceiling in price with regard to the allowing in of Christmas presents? The Minister has just stated it is £5 at the customs. Is there a ceiling for Christmas presents?

Suppose a man brings in a coat worth £10. That is the only article he has declared. It is worth £10 and he gets the £5 concession.

The ceiling is £5 so?

Is it not correct to say that, where the duty is 2/6 or less, nothing is charged?

That is correct.

Question put and agreed to.
Question proposed: "That Section 8 stand part of the Bill."

Is Section 8 a complementary part of Section 7?

No. As a matter of fact, it would have been easier to understand if Section 8 had come before Section 7. There is at present a minimum charge. They must pay 2s. 6d. For some time back that was charged and there was a charge of 1s. in the case of anything coming from Great Britain or Canada. Now we are doing away with that minimum charge completely. In addition, Section 7 lays down that if the duty on an article is less than 2s. 6d. it is remitted.

Then the two are complementary?

They are.

Question put and agreed to.
Question proposed: "That Section 9 stand part of the Bill".

On subsection (3), could the Minister indicate how the repayments will be made? It just says that the Minister for Local Government will do it. The majority of people will have paid their tax on the tractor from the beginning of the year. As I read it, this Act became operative on 1st July.

The local authorities have been authorised by the Minister for Local Government to make the refund, charging them on the £8 rate up to 1st July and charging for the other half year on the lower rate. There are some extra charges depending on whether you pay quarterly or half-yearly, but generally speaking that is the decision. The refund can be made any time after 1st July.

In effect, the tax payable up to 1st July will be £4? The reduction becomes effective only after that? The tax for the whole year will be about £5?

As a matter of fact, I believe it works out at £6 1s. for the year on that basis.

Could the Minister tell us when the present £8 tax was imposed?

I think it was in 1952.

Question put and agreed to.

I move amendment No. 4:

Before section 10 to insert the following new section:

10. The Imposition of Duties (No. 108) (Used Omnibuses) Order, 1961, and the Imposition of Duties (No. 123) (Tobacco) Order, 1962, are hereby confirmed.

If this amendment is agreed, it will have the effect of deleting Section 10, because it embodies what is in Section 10 already, that is, an imposition of duties on used omnibuses. Now we have also an imposition of duty on tobacco. The second duty which was put on tobacco on 14th June operates from 14th June until 9th August.

Was there any particular reason for reducing the rate of duty on used omnibuses?

Yes. When these duties were revised, the intention was to leave them more or less as they were. The duty on the body was 150 per cent. and on the chassis 33-1/3rd. per cent.

Do we get a lot of used omnibuses into the country?

Yes, some private companies use them.

That is most interesting. I regard myself as being reasonably in contact with the daily lives of the citizens and I never met a man who bought a secondhand omnibus.

Some private companies use them in parts of the country. They give a service which is distinct from CIE

They buy secondhand omnibuses?

Amendment agreed to.
Section 10 deleted.
Question proposed: "That Section 11 stand part of the Bill."

The Minister has doubled the rate of initial allowances in respect of capital expenditure which was recommended some time ago. Under the 1956 Act which is referred to in subsection (2), these allowances are made available only to new and not secondhand plant and machinery. I want to suggest to the Minister that it might be worth while considering making the allowances available to secondhand plant and machinery, by reason of the fact that if we enter the Common Market, it may be possible that someone in Europe or Britain might decide for one reason or another to transfer his entire plant to this country. One hears precedents for movements such as that. In the textile trade in particular, it is quite commonplace for the entire equipment of, say, a cotton mill in Lancashire to be moved in toto to Australia, New Zealand or some such place, and opened up there as a working unit.

When we visited the Shannon Free Airport some weeks ago, that struck me very forcibly. In one of the factories, all the machinery had been moved from South Africa in a matter of days by air freight to this country. Most of it was not brand new when first brought in. The balance of advantage which an industrialist has to weigh up when deciding to move to this country may sometimes be so fine that the availability or not of this initial allowance in the first year might be a deciding factor. The Minister may consider it worth while to take some discretionary power to make these allowances available to second-hand plant and machinery.

As the Deputy is probably aware, the whole idea of this concession is to try to induce manufacturers to bring their factories up to date as far as possible. That would mean the use of new machinery, the most modern machinery and the most efficient machinery. I think it would be a mistake, at the moment anyway, to allow this concession to be given to secondhand machinery.

Question put and agreed to.
Sections 12 and 13 agreed to.

Amendment No. 5 is out of order.

Amendment No. 5 not moved.
Section 14 agreed to.

I move amendment No. 6:

Before section 15 but in Part III to insert a new section as follows:—

In connection with any assessment for liability for income tax where a person proves that he has incurred expenditure by way of fares on public transport in travelling between his normal residence and the place where the income is earned he shall, subject to a maximum of £52 in any one year, be allowed such expenditure as an expense wholly, exclusively and necessarily incurred by him in earning such income.

The purpose of this amendment is to amend the tax rules and provide that the taxpayer will be permitted to charge up against his assessable profits on earnings the expenses of travelling to his place of work.

It is a cardinal principle of the tax code that no one in any circumstances whatever is entitled to claim expenses for travelling to his place of work for income tax purposes. In the case of the wage earners and salary earners, the rule in question which is Rule 9 of Schedule E goes back as far as the Income Tax Act, 1853. That rule is quite unsuited to present-day requirements and quite unsuited to a situation in large cities such as Dublin where people can live eight, ten or 12 miles from their work and have to incur very considerable expenses in travelling to their places of work.

I do not know why it is a cardinal principle of the tax code that this expense should not be claimable in any circumstances. It may be that in 1853 when the rule was first drafted, everyone lived near his place of work. The tax code does not anywhere specifically define taxable income but it is generally regarded, as a matter of commonsense, as a surplus of the receipts from any classified source of income. Particularly for the wage earners and salary earners living in the dormitory suburbs of Dublin, transport expenses can be a very significant item in the family budget. While the amendment is designed to embrace all taxpayers—which includes business people and professional people—I feel that the case for the amendment is a good case in respect of the wage and salary earners who are taxed under very rigid rules.

As I mentioned yesterday, it has been condemned very severely by the judicial authorities as unfair and inequitable. The Dublin worker has little or no choice in his place of abode. Dublin Corporation are sending people out for housing to places as far as eight or ten miles from the city. The most recent development envisaged by Dublin Corporation is the development of the Coolock and Raheny area which, to some of our city workers, really means bringing them away out into the country. Transport expenses can amount to as much as £1 or 25/- a week for many of them. Dublin Corporation is faced with the problem that people are very reluctant to go to these very far-out places because of the hardship the cost of transport imposes on them. The rule has not been changed in Britain any more than here but, in my opinion, circumstances here are very different because our dormitory suburbs, places like Ballyfermot and Coolock and so on are not, in fact, self-contained units where people work in their own locality.

The amendment is a very reasonable one and it is restricted. It proposes that this expense be confined to fares spent on public transport subject to a maximum of £1 per week. In so far as some people working in Dublin may live out in Greystones, Skerries or Drogheda there is an element of personal choice involved and if their travel expenses amount to 45s. or 50s. that, to some extent, is because of their own preference but in the case of workers sent to outlying housing estates, they have no personal choice in the matter. If they had a choice they would much prefer to stay in the city area. The constantly increasing cost of public transport further strengthens the case for this amendment which I suggest is a very reasonable one.

Mr. Ryan

Last year, the Minister was not strongly inclined—to use two flattering words—to accept the amendment which was in similar terms but over the past year the Government's mishandling of the whole economic situation, particularly in regard to industrial relations in transport and in the public services, has considerably increased the cost of availing of these services so that there is a much stronger case on the grounds of hardship for the acceptance of the amendment on this occasion.

The Minister used the old Tory argument that people had a choice as to where they lived but the facts of the situation in Dublin are that in the area of Ballyfermot which is situated from five to eight miles from the city centre —I use those distances accurately because it is so vast in extent that it is almost three miles in width—there are 900 to 1,000 seeking a transfer out of that area to some place nearer their work. Many of the people in Ballyfermot, for instance, are people who worked for years in the docklands in the city of Dublin but who were transferred when the unsuitable or dangerous dwellings in the dock area were demolished. These unfortunate people have to commence work at an early hour and they are forced to use public transport because of the long distances they must travel and the situation arises where the bread winner alone, in order to begin earning, must spend up to £1 a week or more in travelling expenses.

It is axiomatic in the income tax code, except in relation to Schedule E persons at any rate, that money necessarily expended in obtaining income is allowable for tax purposes and if a wage-earner is able to establish that it is necessary for him to use such transport for the purpose of getting to his work and if he can establish that he spends or is likely to spend up to £52 a year for that purpose, that sum should be allowed to him.

There is also a social argument in favour of the amendment. It is better to distribute the population in the suburbs in separate dwellings rather than in high flats in the centre of the city. At present the State is subsidising the building of local authority houses all over the country but in Dublin, because of the high transport cost imposed on workers and the reluctance of workers to go to outlying places, Dublin Corporation is forced to build flats in the centre of the city. There has been argument in favour of flats of ten storeys high or thereabouts, but for the time being these flats are four storeys high and the average cost of providing flat dwellings in Dublin for the average family is from £400 to £500 higher than the cost of providing similar accommodation in the suburbs. The point then is that the State is supporting the situation which is compelling Dublin Corporation to build dearer dwellings when dwellings with better amenities could be built in other places at lower cost if the workers were ready to go to these places. Any member of Dublin Corporation — and there are many on both sides of the House—can testify to the fact that quite recently people in urgent need of houses because they are living in overcrowded conditions or in insanitary accommodation are unwilling to accept offers of houses in the suburbs because of the tremendous imposition which would lie upon them in relation to transport cost. It is not only the breadwinner whose travelling expenses have to be paid but there are also the expenses of various members of the family who may be attending schools in the city.

It seems that there is another argument in favour of accepting this amendment which is worthy of consideration and that is that the acceptance of it might encourage people to use public transport and abandon their private cars which at present are cluttering up the city. If the use of private cars continues to increase at the present rate the situation will shortly arise when the private car will not be worth having in Dublin because it will be so difficult to move or park. Therefore it seems it might be worth while to encourage the use of public transport because I am sure it is accepted by everybody that you can accommodate far more people on an omnibus in a given space than if they were in private cars.

Last year the Minister argued against our amendment that it was better to reduce the overall rate of income tax rather than to give allowances here and there. Against that, I would argue that where you reduce the flat rate of income tax the people who benefit most are those who are on the higher income level. Were a concession to be given of the type Deputy Byrne and I suggested, the people who would benefit by it would be the people who greatly need it. I am thinking of the person whose income tax might be only £10 or £20 a year and who is paying on the PAYE system. Spread over the year it is a small amount in any week but to any average home or family it means that some person is denied some essential or partially essential commodity like clothes or boots or some assistance in relation to education.

If the Minister were to accept this amendment or to qualify it by saying the benefit would be applicable only to people who earn less than £10, £12 or £15 a week or whose income tax assessment is not more than £25 or £30, I think Deputy Byrne and I would be prepared to accept it. The concession is very necessary by reason of the fact that State and municipal policy in relation to housing in a place like Dublin has forced people to live where they do not want to live and where they cannot afford to live because of high transport costs.

I should like to support this amendment and the arguments that have been put forward by Deputy Patrick Byrne and Deputy Richie Ryan in respect of the workers in Dublin, particularly those who live in the suburbs. I merely want to speak on behalf of those workers outside Dublin and especially in the rural areas who have to travel fairly long distances to their work, people who may be employed on building schemes and who may live 10, 15 or 20 miles from their work or, as I have been reminded, in some cases up to 30 or 40 miles.

Such people undergo considerable expense in the course of their employment. Take, for instance, people who work on the land reclamation scheme. They may work in one area for three months and need a motor bicycle or a motor car in order to get to their employment. They get no allowance for that and I am sure those who employ them do not give them any allowance or, if they do, it is a very small one. There are also those engaged in the building trade who find they have to change their place of employment four or five times during the year. A good case can be made for income tax allowances for people like that. It is quite easy to establish their place of residence and also their various places of employment. A certificate from their employers would, I am sure, be acceptable to the income tax authorities and could be easily verified. I do not think they should be put in any less favourable position than company directors or those who are employed by well off concerns and who can travel at the company's expense. Therefore I would plead with the Minister to make an allowance in respect of workers in Dublin and elsewhere who must travel long distances either by motor bicycle or motor car.

I do not know whether or not there is an allowance in income tax for lodging expenses. Again I refer to those who are engaged in land reclamation or in the building trade. Workers in the building trade may be engaged on a housing scheme for three or four months and may find it more economical to stay in the place of their employment rather than to return night after night to their place of residence which may be anything up to 40 miles away. I believe they may get an allowance but it is a concession given purely at the discretion of the Revenue Commissioners and not as a right. There may be administrative difficulties but in all justice and fairness an examination of the whole matter should be made in order to give reasonable allowances for income tax purposes.

I was under the impression that if a worker could show expenditure which was necessarily incurred in travelling to and from his work the Revenue Commissioners would allow that as a deductible amount. What gave me that impression was that recently a friend of mine found it necessary or economical to buy an autocycle to travel to and from his work. He made this point to the Revenue Commissioners and was given an allowance. I should like to know if the position is that a man travelling to and from his work on an autocycle will be allowed to deduct a certain amount from his income and that the man who travels by bus will not get such an allowance. If that is the case it is a bad situation. However, no doubt the Minister will explain the position. I am very glad the amendment was put down because whatever the Minister may do at this stage it will certainly give food for thought between now and the next financial year.

I do not think the income tax code allows a person expenses for travelling to and from his work. Deputy Byrne made that point clear and he probably knows a great deal more about this facet of income tax than the average Deputy here. There is another section of the community for whom I should like to make a plea. In rural Ireland there are many teachers concerned with vocational education who have to travel a considerable distance to their work. I have in mind a music teacher who lives in Enniscorthy, in the centre of the county, and who has to travel to Wexford, Gorey and New Ross. If he were to stay in Enniscorthy he would not make a living. Whether he travels by public transport or not I do not know. This amendment is so framed that the allowance would be made to anyone who travels by public transport. It is reasonable to assume that if the Minister accepted the amendment many of these people who do not travel by public transport would do so. It is a reasonable proposal because it is limited to £52 in the year or £1 a week. There are other people teaching languages who have not got their pupils in one place and who have to travel all over the county. This applies to vocational teachers in every county. The vocational teacher who has to travel to different parts of the county in which he works gets no allowance whatsoever. In spite of what Deputy Lemass has said, I do not think there is anything in the income tax code which enables people to get an allowance for travelling expenses. The Minister is adequately safeguarded by the phraseology in the amendment and I hope he will accept it.

Progress reported; Committee to sit again.