Vol. 224 No. 12
asked the Minister for Finance if he is aware that traders in the confectionery trade who applied to register in respect of the wholesale tax were informed that unless a firm or trader was purchasing taxable goods to the value of £100 per month, the firm could not be registered; and that this decision imposes unfair trading on small firms; if he will have the matter reviewed; and if he will make a statement on the question.
9.
asked the Minister for Finance whether he is aware that in relation to the bakery trade up to 90 per cent of the firms engaged do not qualify for registration for wholesale tax because they do not use a minimum of £100 of taxable material per month, with the result that all these small firms will now be obliged either to stand the tax on materials purchased for the making of bread and cakes or to pass the tax on to the consumer; and if so, what effect this will have on the trading position with smaller firms as against the larger ones or on the cost of living.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 8 and 9 together.
The Finance (No.2) Act, 1966 provides that a person manufacturing exempt goods may register for the purposes of the wholesale tax if he uses taxable goods in substantial quantities as materials. Registration allows the person concerned to buy his materials free of tax but involves him to some extent in the keeping of records and in the making of returns, and renders his books liable to periodic inspection.
The Revenue Commissioners originally took the view that a fixed sum of £100 a month would be a reasonable figure to set as the limit above which manufacturers should be allowed to make tax-free purchases of materials, and so become eligible for registration. Subsequently, however, in discussion with the Revenue Commissioners, many of the smaller manufacturers expressed concern at the effect on them of a limit as high as £100 a month, and the Commissioners then issued instructions to the Collector-General and to inspectors of taxes to the effect that small manufacturers should be allowed to register if they show that in their circumstances their purchases are substantial in relation to the size of their business.
The Deputies may rest assured, therefore, that any small confectioner or baker who has been refused registration will have his case reviewed sympathetically if he resubmits his application with an explanation of his circumstances.
Can the Minister say if that will enable him to be treated in the same way as traders who hitherto did business exceeding £100 a month?
Yes, that is the purpose of it.
Will the Minister agree that any system which differentiates—it does not matter what the differentiation is—in relation to the tax as between the bigger person and the smaller person is not sound, that it should be the same for all?
Anomalies occur in all tax systems but, in so far as they do here, the Revenue Commissioners have been doing their best to eliminate the anomalies.
Surely the position is that a tax is imposed by the House with the intention that it should be of equal application to all? It seems to me from the Minister's reply—I do not know whether he will agree with me or not—that, in fact, what we have done is handed over our discretion to the Revenue Commissioners so that they can adjudicate and decide whether or not purchases are substantial in relation to the size of a firm's business or not. Surely the Minister will agree that that is a matter that should be settled here?
It is not possible to settle every detail of that nature that would arise and write it into legislation but, in the long run, the tax would have to be paid and the tax usually transmits itself down along the line.
