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Dáil Éireann debate -
Wednesday, 15 Feb 1967

Vol. 226 No. 8

Income Tax Bill, 1966 (Certified Consolidation Bill): Report and Final Stages.

Question proposed: "That the Bill be received for final consideration."

I think it is time we turned our mind to this. We are following very exceptional procedure, and I will require your direction and assistance, Sir, in the matter of this consolidation procedure.

I want to remind Deputies that this is Report Stage and that the debate is limited. On Fifth Stage, the debate is somewhat wider.

On the Report Stage of this Consolidation Bill, a peculiar situation arises. We have discussed it in a special committee upstairs and we have done detailed work on the Bill. There are no amendments on Report Stage. I want to draw the attention of the House, and indeed the country, to the fact that Dáil Éireann is now presented with a Bill consolidating the income tax law in this country consisting of 561 sections and a large number of Schedules. While we are all agreed that it is a useful thing to bring within the compass of one Act of Parliament the entire corpus of law relating to income tax, I seriously want to put the point to the House that I do not believe that there is any living man in the Revenue Commissioners, in the public service, in any solicitor's office or in any accountant's office who really knows the contents of this Bill and Schedules.

I suggest to the Deputy that this does not arise relevantly on this Stage. This is not a Stage on which that matter can be taken up. This is really a discussion on the merits or demerits of a consolidation Bill, not a discussion on the merits or otherwise of items in the Bill which is before the House.

The Report Stage is always the Stage at which we consider amendments consquent on the Committee Stage of the Bill.

But the Deputy is discussing the merits or demerits of a consolidated Bill.

I am trying to bring the attention of the House to the dilemma into which not only Deputies but the whole community is drifting. This ought to be the Stage when anything that has not been done on the Committee State requisite to perfect the Bill could be done.

That may be correct but it is not the position.

I suggest that it is the position. On the Report Stage, we should be putting to rights anything we overlooked on Committee Stage.

That is not the position under the rules of order.

Why is it not?

I do not know. All you may discuss on the Report Stage is the Report of the Committee on the Bill.

That is what I am discussing.

No. The Deputy is discussing whether there should be a consolidation Bill at this Stage before the House.

I hope, if the Chair will permit me to say so, that my command of the English language is not failing. What I am trying to communicate to the Chair and to the House is that the nature of this Bill is such that there is no living creature who knows what it means. There may be, and probably are, in the public service——

I cannot allow the Deputy to proceed on that line. The Fourth Stage of a Bill, as laid down by the rules of order governing the procedure in this House, is that amendments moved and carried on the Committee Stage may be discussed and amendments moved on Report Stage. What the Deputy is seeking to discuss now is whether there should be a consolidation Bill at this Stage before the House. I cannot allow a discussion on the merits or demerits of a consolidation Bill.

Am I to understand that nothing may be discussed except the amendments submitted?

Amendments submitted and carried on Committee Stage and amendments moved on Report Stage.

Are you submitting that nothing can be discussed but amendments? There are not any amendments proposed.

Therefore, they cannot be discussed.

Therefore, there can be no Report Stage.

I did not say that. I said there is a Report Stage.

What is proposed to be discussed on the Report Stage?

I am not subject to cross-examination.

I am not cross-examining you; you are trying to cross-examine me.

I told the Deputy that amendments carried in Committee and amendments submitted at the Report Stage may be discussed. What the Deputy is seeking to discuss are the merits or demerits of the consolidation Bill and that cannot be allowed.

The Ceann Comhairle entirely misunderstands what I am trying to say and, mark you, I am usually pretty clearly understood and I believe I inflect the English language with remarkable clarity. On this occasion I do not seem to be communicating to the Ceann Comhairle what I am seeking to communicate to the House.

I cannot allow the Deputy to proceed. That is all.

But I am speaking strictly in order.

It is not in order.

What is not in order?

What the Deputy is seeking to do.

Do it on the Fifth Stage.

Except that I do not accept the proposition that it is not appropriate to the Fourth Stage of the Bill to direct the attention of the House to the fact that the ordinary procedure associated with the Report Stage is in fact nullified by the magnitude of this piece of legislation. We ought now to be considering amendments submitted for the purpose of repairing any oversights of any decisions reached as a result of discussion on Committee Stage. That is the purpose of this Stage. I was explaining to students last night that the Dáil gives itself the Report Stage so that if the Opposition make an impression on the mind of the Minister on Committee Stage that an alteration should be made, the Minister may say: "I will consider your amendment and before Report Stage, I will draft an amendment and we can then look at both. Perhaps I shall be able to come far enough to meet you to enable you to accept my amendment and withdraw your own".

There is no point in my going to University College, Dublin, on Tuesday night and explaining to students of politics that the Dáil has so arranged procedure if I come in on Wednesday and am told that I am not allowed to do that. I want, with respect to the Ceann Comhairle, to assert my right to propose an amendment to the Report Stage of this consolidation Bill if, in my judgment, the amendments made in the Bill did not fully repair its deficiencies and I seek to avail of this occasion to do that which, as a deliberative assembly, we failed effectively to do in Committee Stage.

I have no doubt the Deputy gave a very lucid lecture to the university students but he is not convincing me, and unfortunately he is not the person in authority at the moment.

I desire to maintain and sustain that authority as does every Deputy but I am not clear what in fact the Ceann Comhairle is saying. Is he saying that unless there are amendments on the Order Paper, one may not speak at all on this Stage?

I did not say that.

Am I entitled to say that the fact that there are no amendments on the Order Paper is in itself evidence of a defect in our procedure in dealing with this particular Bill? I looked for amendments because from my long parliamentary experience, I assumed the Special Committee that laboured very long on this extremely complex piece of legislation discussed a number of the infirmities that appeared in the original draft. I see that there are no amendments submitted on the Report Stage and the Ceann Comhairle may assume, or any other Deputy, that the reason for that is that the work done in Committee was so exhaustive and so perfect that no need for further consideration arose.

Hear, hear.

I am delighted to get that.

I can well imagine that is true but I am putting forward to you, a Cheann Comhairle, and to the House, an alternative explanation and I am directing the attention of the House to the dangers into which we are running. I am holding up a Bill with 561 sections and a very large number of Schedules and I am suggesting that in the desirable effort to consolidate income tax law, we are not producinig an instrument which is to the satisfaction of all: otherwise, I am confident that there would have been at least verbal amendments forthcoming on the Report Stage because 30 years of experience in this House teaches me that that is the invariable need and practice in dealing with a piece of legislation of this kind. I submit to the House that the reason we have not got the amendments is that no living creature knows what is in this Bill——

No, it is because it is a consolidation Bill. I suggest the reason that there are no amendments on Report is that it is a consolidation Bill and the law cannot be changed. We can only enact existing law.

It is, I think, a very useful thing even to have elicited this exchange of views. That is a legitimate reply to the dilemma I advance. I can move on then, on the Fifth Stage, to approach the matter from a different angle and if the Minister for Finance says to me: "I agree with the Deputy. It is an astonishing thing to see a Bill of this magnitude come to Report Stage without a single amendment being moved, by Deputy Sweetman, who was largely the spokesman of the Fine Gael Party on this highly technical Committee, or by the Minister for Finance himself, or by any of the members of the Labour benches, but the reason for that is that I was in a position all the way through to certify to the satisfaction of the Committee that there was no change in the law."

The truth is we made so many amendments in the Committee that there is no necessity now for any more.

The Deputy should look up the report.

Perhaps my intervention at this stage may not appear, a Cheann Comharile, so groundless as at first appeared.

The Deputy has forgotten the procedure on the Defence Forces Bill.

No. Seeing that I helped to develop this procedure——

If the Deputy looks at the procedure adopted after a Special Committee on the Defence Forces Bill some years ago, he will have the answer to all his problems.

The only course I am trying to take is to reassure the public and ourselves that legislation of this kind is both seemly and becoming and both the Minister and members of the Committee now concede that in the original draft of this Instrument, various amendments were submitted and accepted. However, we are faced here with the hard fact——

I would say there were 40 amendments, from recollection.

Approximately 40 amendments.

From recollection.

But the fact is that on Report no further amendment by either side has been brought here for the consideration of the House at large. I believe the reason for that is that no living creature knows what the Bill contains. I do not blame anybody for that. This is a Consolidation Bill and it is the accumulation of the law of years, going back, I suppose, to Gladstone.

The law was consolidated in 1918.

The Deputy should make up his brief before he gets into hotter water.

This is the consolidation of 50 years of law. All I am trying to put to Dáil Éireann now is that we have allowed the income tax law to get into such a state of chaos that nobody knows the law. That is not the case just here. It is becoming a great scandal, I think, of legislation in the United States of America. The same problem is probably beginning to arise in Great Britain. What I am putting to the Minister for Finance is: is there any means of reducing this monstrous document to dimensions which would be comprehensible by the people whose daily lives are regulated by it? There was a time when this law applied to a very small minority of the population. It now affects everyone who earns more than £6 a week. I suggest to the Minister this is a matter worthy of his consideration and, in that context, I shall have a word to say on the Fifth Stage when others have spoken their minds.

Perhaps I might be allowed to make some observations in relation to this. It was mentioned at the Special Committee that this Bill was so complex that it might perhaps have been a better procedure if the Minister for Finance had introduced a Bill for the revision of the income tax law before introducing the Consolidation Bill. I think it was one of the members of the Committee who suggested that, irrespective of whether the Bill for the revision of the income tax law or the Bill for the consolidation of the law came first, it was a matter of the hen and the egg. It is not for me to make any comment on that at this stage, except to say that I agree entirely with Deputy Dillon that, so far as this consolidation measure is concerned, while there is undoubtedly an official—there may be two—who knows what is in the Bill from the point of view of his being able to refer us in the Committee with the greatest possible speed not merely to the sections in the Bill but to the sections from which they derived, there is, at the same time, no living person— it is only fair to say this in support of Deputy Dillon—who is able accurately to determine the interpretation of each particular section here. Indeed if there were such a person, there would be no need for special commissioners, circuit courts, high courts or supreme courts at all. The fact is that the law of income tax has, as Deputy Dillon said, got into such a jungle that nobody really understands it.

This Bill comes here as a consolidation measure and, as such, it comes with a clean sheet, so to speak, because of the manner in which it was browsed over and worked on as a purely consolidation measure for so many years by one particular person, who is now in a higher position in the Office of the Revenue Commissioners, and because it was passed on by him to a man who made it his life's work for the past two years, and then dealt with by the parliamentary draftsman, and because, in the absence of some of us at the Committee, we were able to ensure that the amendments necessary to be incorporated in the measure to make it a proper consolidation measure, and no more, were included by the Special Committee.

Nobody suggests that the Consolidation Committee in bringing this Bill to the House has brought a Bill that is more intelligible than the existing jungle. We suggest, however, that we have put the law into one volume of 561 sections and 19 Schedules, the biggest Bill, I think, that has ever been brought before the Oireachtas. The function of the Consolidation Committee is simply to bring to the Dáil and Seanad the statute law in force at the moment. It was not our function, and we do not pretend it was, to bring to the House a Bill that, so to speak, cuts the Gordian knot from the point of view of disentangling the existing law. There are two methods of dealing with the present position in relation to income tax law. One would be to abolish income tax altogether.

No doubt the present incumbent of the Office of Minister for Finance will promise that at some stage, but will not give the cost. The second way would be to bring in an income tax Statute Law Revision Act which would cut down many of the difficulties in this Bill and, in particular, cut out much of the nonsense incorporated in the Finance Act, 1965, which nonsense we had to incorporate here and ensure, in so doing, that the statute law in relation to income tax would be such that the ordinary person could understand it. Deputy Dillon is 101 per cent right when he says there is nobody in the country who could understand and give with certainty an opinion on all the 561 sections and 19 Schedules of this Bill, but the Committee has to present to this House the re-enactment of what is the law and it remains for the Minister to bring in a Statute Law Income Tax Revision Bill simplifying the law and bringing it down to more intelligible proportions.

All of us are, at some time or other, asked questions about income tax by our constituents. By virtue of our membership of this House, we are deemed to know something about it—very often wrongly deemed to know. I must plead a massive ignorance as far as the laws concerning income tax are concerned, not having much acquaintance with that bracket myself. It is extraordinary that we can be told here by Deputy Dillon, supported by Deputy Sweetman, that we have had a committee of this House producing a document which is completely incomprehensive. What sort of Committee is that for Parliamentary purposes?

I do not think anybody said that.

There is nobody who can interpret it.

Nobody who knows the contents of the whole Bill.

This Bill is before the House and we are asked to pass it but there is nobody who understands it all. I do not understand it, and I doubt the ability of anybody else to understand it, but we are now being asked to accept it because it is a consolidation Bill. Surely that puts Dáil Éireann in a ludicrous position? It should not happen that a piece of legislation should be brought here of which it can be said that no one understands it. Surely there is an obligation that it should not be left to Deputy Dillon to raise this matter here, to seek clarification of our legislation? Surely it should not be left to the Report Stage of a Bill to ask for clarity? It simply amazes me that we should have this Bill before us in the state in which it is, in which no person in Ireland can understand it.

I think there is a good deal of misconception as to what this Bill is about. Like Deputy Sweetman, Deputy Dillon and Deputy Dunne, I would not like to set myself up as an authority on income tax law but the present situation may be traced to two causes. One is the large number of existing enactments even since the 1918 Consolidation Act and the other is that the law gives a large discretion to the administration and that the real difficulties of the law are not contained in its framework. This is a consolidation Bill. Deputy Dunne would be perfectly right and Deputy Dillon would have my sympathy if this were a Bill to amend the law but the Bill is nothing more than a preliminary effort to bring order into the existing law and to consolidate it without changing it.

The Bill as introduced to the House was to consolidate the law and it was referred to that Committee. It would be completely beyond the powers of the Committee to alter the law at all. The primary task of the Committee was the re-enactment of the enactments already on the Statute Book without changing them. The purpose of the Committee was to do that and there was no change in content. The Bill now comes before the House as a consolidation Bill and it is nothing more than the existing enactments brought up to date in language and put into one volume. The members of the Committee might have wanted to alter the law and this question may have been raised once or twice in the Committee but that was beyond our competence. This is merely a consolidation of the existing law. It modernises, as far as possible, the language of existing enactments and brings within one cover, for the benefit of the community and the citizens, the statute law.

Even Deputy Dillon will admit that it is a great advance to have within the one document the statute law. There is nothing in the Bill to give legal effect to anything that did not have legal effect before. There was a suggestion that only the experts of the Department know what is in this Bill and I feel constrained, as a member of the Committee, to make the following remarks. I have been a member of a number of Committees and, speaking for myself, I feel that this Bill left us to come before the House in circumstances in which we knew rather thoroughly what we had done. Deputy Dunne feels upset that in such technical matters a Deputy is sometimes in a difficult position but I feel, and every other member who attended regularly at that Committee must feel, that we know and are confident that a good job was done here.

In saying that, I do not wish to laud the members of the Committee but I must say that the staff work done in the Committee was without parallel, in my knowledge of this Parliament. I never had the advantage of serving on a Committee of this House in which the staff work was so well done. Our own Dáil staff, the staff of the Revenue Commissioners, the Attorney General's staff and the staff of the Department of Finance and the other Departments did their work excellently. Deputy Sweetman deserves some credit in his own right but the service which the Committee had from the staffs of the Departments and the willing service of information we got enabled the Committee to do a record job in record time. It is only right that that should be said here. The views of Deputy Dillon might be interpreted as a reflection on the efficacy of the work done and I think great credit goes to the staffs for the service they gave.

There is one other point I want to mention. As I say, it would be more proper for Deputy Sweetman to say the things I have said, but I should like to say that Deputy Sweetman's competence and energy contributed greatly to the success of this Committee and he should be proud of the work. I feel compelled to say this because of what Deputy Dillon said.

To get back to my original point, this is merely a consolidation Bill and Deputy Sweetman has given the reasons why there are no Report Stage amendments. The whole area of law reform, law improvement and law change, is in the hands of the Minister and we were not concerned here with that. If it were otherwise, I am afraid that Deputy Dillon might have had an ally rather than somebody speaking against him, in regard to things being debated here in the House, a principle to which I fully subscribe. I should like Deputies to understand that this was merely a consolidation Bill and comes before the House as such.

I just want to say a word about the point raised by Deputy Dillon and Deputy Dunne. I should not like the House, or indeed the general public, to get the impression that our income tax law is a completely incomprehensible jungle. This is undoubtedly a very large and complicated measure but it is so mainly in the interests of the taxpayer. Deputy Dillon pointed out that this Bill now affects everybody who earns more than £6 a week. It is precisely because it does that it is such a large measure. It would be a very simple matter for this House to pass a simple general type of provision which would say that everybody over 21 years of age will pay income tax and leave it to the Revenue Commissioners to work it out after that. It is precisely because it affects the livelihood of every citizen that we have to be careful and spell out in the greatest possible detail who is liable, and precisely to what extent he is liable, for income tax.

That is the first justification for the size of the Bill. It is complex because we live in a complex society. I do not think it is any worse than any other section of the law. I remember when I was in the Department of Justice, we had a figure of a quarter of a million cases stated which governed the general law of the land. If it is true to say that no one single individual understands all that is in this Bill, it is true to say that of many other branches of the law. Does any lawyer even understand every aspect of our criminal law? Does any lawyer understand every aspect of the law of negligence? I do not think so because the law of negligence consists of a number of statutes and an infinite number of cases stated, but this does not prevent the law from working satisfactorily.

Here we are engaging in a process of consolidation and I think that is an important reform measure. If the law is difficult and complex, then it is especially difficult and complex if it is contained in a whole variety of Acts to which reference must be made before you can understand any particular provision. Surely we are reducing the complexity and complications by putting all these various Acts together and by putting all the law together so that people will not have to refer to a whole series of income tax Acts to understand what the law is? So far as there is complexity and difficulty in the laws governing income tax, the complexity and difficulty are being enormously reduced by the passing of this measure.

I want to affirm that when this measure has been passed, it will be within the competence of most lawyers, most accountants and most judges to deal with any particular matter of interpretation of income tax coming before them. I do not want anybody to get the impression that this it such an incomprehensible maze that nobody can understand it or find his way through it. I do not think that is so. Most competent technicians will be fully able to deal with income tax matters fairly readily and fairly quickly, once this measure becomes law and once we get all the various enactments together in one piece of legislation.

It was pleasant to hear Deputy de Valera's tribute to the staff work done for the Committee which considered this Bill at such considerable length. As we are in a gracious mood, someone from the back benches, representative of the ordinary members of this House, should express a word of thanks to those of our members who sat on this Committee and who did such a thorough job on the Bill—tedious and even boring work as I have no doubt it was, the type of constructive work which is all too little appreciated outside this House.

Hear, hear.

From reading the reports, I can see that Deputy de Valera and Deputy Sweetman were conspicuous participants in the constructive work done in the Committee, as indeed they were also on a similar Committee some years ago on which I served, the Company Law Reform Committee. When we hear, as we so frequently do hear these days, Parliament denigrated, we can all take justifiable pride in the constructive Committee work done on these occasions. I agree with what the Minister has said, that this Bill represents a major convenience for tax practitioners, lawyers and accountants—tax mechanics, as I would call them. I can well believe that the amount of draftsmanship that has gone into the Bill has been most exacting and has taken a tremendous amount of time.

The Bill consists basically of the British Income Tax Act of 1918, as amended by our various Finance Bills since then. Deputy Dillon mentioned Gladstone and his Bill of 1853, and someone intervened to point out that in fact the base line to which the Bill goes back is this British Act of 1918. It is appropriate that we should remind ourselves that this Bill consists, as to 75 per cent or 80 per cent, of British law, that its root and core is that British Act of 1918, which, in fact, went back to the measure to which Deputy Dillon referred, the British Income Tax Act of 1853 and, indeed, the basic principles on which that was based go back 50 years earlier to the time of William Pitt. We are here re-enacting this British law, much of which is quite unsuited to our requirements and much of which is quite archaic in the modern times in which we are living. The Bill, in short, is really nothing very much to boast about.

We are going now to engage in the solemn farce of translating this British law into Irish, a process which will take, I am sure, years before it is fully perfect as the law of this land. If this law is turned into Irish, is that going to make it any more suited to our requirements? Of course, it is not. It is, as I said, a solemn farce.

It is time we took a firm grip on ourselves and faced up to the dire necessity to reform our tax law. Whatever about the Members of this House understanding all that is in this Bill or not understanding it, there was one body which sat in this country some years ago which clearly understood all of it and that was the Commission on Income Taxation which was established by Deputy Sweetman when he was Minister for Finance and which reported to Dr. Ryan when he was Minister for Finance, some years later. That Commission consisted of many able tax experts, representing a broad spectrum of Irish society. It consisted of experts and lay people. The Commission made many recommendations for the reform of our tax law many of which have not yet been implemented. The Minister, Dr. Ryan, who received the Report of the Commission was an arch-conservative. His successor, the Minister's predecessor, the present Taoiseach, as Minister for Finance, achieved nothing in the way of tax reform. Indeed quite the contrary, in the Finance Act of 1965, most noticeably in Part VII of that Act, he introduced provisions relating to a capital gains tax on property and land which are virtually incomprehensible, which have caused a tremendous furore amongst persons called upon to advise property owners and developers, which in its present form is creative of great hardship on simple people.

I am afraid the Deputy is getting away from the Report Stage and going back to the Second Stage.

Very well, I shall not pursue that line, but I do feel that this is a suitable occasion to make the point that this Bill is nothing very much to boast of in the creative sense. Unless the Minister can give us an indication that he will bring to bear a more constructive approach to tax reform than either of his two predecessors did, we will be left saddled with this archaic and outmoded British law, unsuited to our conditions, for a further indefinite period. I appeal to the Minister—he has an opportunity of speaking again on the Fifth Stage—to give us some indication of what he will do to implement the recommendations of the Commission on Income Taxation, for a start—those as yet unimplemented—and, in toto, to make of our tax law something more suited to Irish conditions.

I am disappointed with some of Deputy Byrne's remarks because I cannot agree with him for a moment that there is any element of farce involved in this Bill.

I was speaking of translating it into Irish as a solemn farce, and I am sure the Deputy agrees with me.

I do indeed, but the point which the Deputy made conveyed a very clear distinction to my mind, and I think the report will bear me out that he said this Bill was a farce and nothing to be terribly proud of.

I regard this Bill purely as a steppingstone and I think that is all it can be. I agree with Deputy Dillon that much of it is still incomprehensible. This was a matter which, on the Committee, caused us considerable heartburning because it was very difficult indeed not to be tempted to try to introduce discussion in an effort to amend the law in order to make it clearer and more comprehensible. Our difficulty—and it was made clear to us throughout—was that we were restricted in our deliberations to ensuring that the document which we would hand back to the House at this Stage would be one which enshrined the statute law as it stands at this moment, all in one document instead of being in a number of documents.

The state of income tax law is necessarily confused by reason of the fact that it has developed through piecemeal amendment and each amendment as it was put through in successive Finance Bills reacted on sections which were specifically mentioned and on other sections which were not specifically mentioned and further amendments started off a form of chain reaction. We have not got over this rather confusing situation by producing this Bill, but, at least, we have now made it possible for a reform of income tax law to take place. Up to now any drastic reform would have been impossible.

I am disappointed with Deputy Byrne because I think he was not listening to to the Minister as closely as he might have because I think the Minister made it perfectly clear—he did to me at any rate—that he regarded this as a steppingstone towards some general reform, I certainly am all in favour of that because the system as it stands is quite unsuitable and far too cumbersome, far too time-consuming and almost uneconomic. There is far too much time spent, both on the Revenue side and on the side of the taxpayer in trying to establish liability. This Bill, in itself, will not clarify matters to any extent, but it will give the Minister and the House in due course an opportunity for a complete and drastic reconsideration of the whole system.

The production of this Bill was quite an astonishing performance. It represents an enormous amount of very careful and detailed research by numerous State officials. We have been able to bring the Bill slightly more up to date on the advice of the parliamentary draftsman, and we have had to resist the temptation to go any further than he has suggested, but I do agree with Deputy de Valera that the amount of work which was carried out in order to produce this Bill at all was quite fantastic, and the way in which it was presented to us was absolutely beyond all praise. Even though it was good in its initial presentation, after a preliminary discussion, we asked for further analyses of the various provisions to assist us in our consideration of the Bill itself. This work was carried out with quite extraordinary speed and the additional information which was passed on to us as members of the Committee made it very much more easy for us to see which particular sections really needed detailed consideration and which we might safely pass, on the assurance that they were a verbatim repetition of existing legislation. All those officials did a tremendous amount of work and I should like to pay my tribute to them.

I feel, too, that we were particularly fortunate in having Deputy Sweetman as chairman because, while I think we all did work, he put in very much more homework than anyone else and as a result, our deliberations were reduced in length very considerably. He was most co-operative and helpful and also gave us the benefit of his expert knowledge. It is only right that I should add my tribute to him personally. It was a Committee which carried out much of its work in private. We all did our homework individually over the Christmas holidays. The actual working in Committee was very short when one considers the size of the Bill. We have taken a great step forward. My one reservation is that I hope it will only be the first step in a very drastic reform of the whole system of income taxation.

Question put and agreed to.
Question proposed: "That the Bill do now pass".

I think our intervention on the Report Stage has not been fruitless. First we have paid tribute for public service rendered by Deputy Sweetman as chairman of the Committee. Secondly, there were emphasised the industry and zeal of individual Deputies who sat under his chairmanship in performing the very formidable task entrusted to them by the Dáil. Thirdly, we paid well deserved tribute to the secretariat of the Committee, the Revenue Commissioners and the various Departments of State who placed their expert resources at the disposal of the Committee. I think it is a good thing that that should be put upon the public record.

I suppose, sitting in the back benches one has an opportunity of saying things one has not when sitting on the Front Bench. As the Third Estate, we are frequently reproached by the Fourth Estate for a lack of diligence, and in attending on public business. Our numbers are not infrequently counted. I intend to reciprocate the compliment. In discussing this matter which affects every single citizen of the State earning more than £6, there is one member of the Fourth Estate in the Press Gallery which I believe consists of approximately 30. However, I understand, of course, perfectly well that for the purposes of our deliberations, the presence of that one distinguished member of the Press is adequate for such a subject as this. I shall expect in the future similar understanding by the Fourth Estate that a moderate assembly of expert Deputies dealing with technical matters adequately represents Dáil Éireann as a whole which prudently delegates to its expert members that to which they individually feel they cannot make a substantial contribution by way of intervention.

May I tell the House that the first Consolidation Bill to appear in Dáil Éireann had its deliberations conducted by my humble self? The first Consolidation Bill ever passed by Dáil Éireann, a very technical Bill——

I was a member of the Committee.

And the Deputy present, the Minister for Finance, was a junior member of the Committee.

The Minister for Finance was a member only of the third Committee. I think Deputy de Valera and I were members of all three.

The Deputy was: I was out of the last one.

The Minister for Finance owes me many debts since he came to the House. He was also a pupil of my Public Accounts Committee, although I am sorry to say I do not appear to have imparted to him adequately the procedure in connection with Excess Votes, but doubtless the additional instruction I have given him in that regard has now registered on a more mature man.

I shall attend the Deputy's classes in UCD in future.

Now I want to turn for a moment to a matter which we began to ventilate. I think Deputy Dunne makes a mistake when he says, as emerged from our discussion here today, that the law has been allowed to get into a state in which no one can interpret the provisions of this Act. I do not think that is true. I do not think there is any provision in this Act which reproduces the law as it stands to-day which is not susceptible to interpretation by a machinery which provides an effective tribunal for interpretation as between the State, on the one hand, and the individual taxpayer on the other. The procedure is cumbersome, as all litigation is cumbersome. My complaint is that in common with many other countries, we have allowed income tax law over the years to get into such a state of complexity that there is no living person who knows all of the law relating to this matter which is allegedly down now in one Statute which should be comprehensible at least to some expert advisers. This is something to which we as parliamentarians should have regard.

Laws, if they are good, should be certain and just. Is there any Deputy who can maintain that the income tax law as contained in this Bill is certain or just? I do not think that under either criterion the law as it stands today is good law. The law to be certain ought to be comprehensible, once the attention of the person on whom it impinges is directed to the relevant provisions. It is unreasonable to demand that every citizen of the State should know where to look for the law but it should be possible for somebody expert on the matter to take a consolidation Act and say: "There is the law as it applies to your problem."

I should like to quote section 362 of the Income Tax Bill as it stands to-day, which relates to Part XXIII which deals with the sale of securities:

(1) If the first buyer is entitled under any enactment to an exemption from income tax which, apart from this subsection, would extend to the interest, then, subject to the provisions of this section, the exemption shall not extend to an amount equal to the appropriate amount in respect of the interest, as determined in accordance with Schedule 10:

Provided that if the first buyer is entitled as aforesaid and any annual payment is payable by him out of the interest, the annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to tax, and section 426 shall apply accordingly.

Subsection (2) states:

This section shall not apply where the exemption arises from the residence of the first buyer in Northern Ireland or Great Britain.

I accept of course that these matters derive much of their complexity, as has already been said, from the annual activity of the Revenue Commissioners in their advice to successive Ministers for Finance devised to prevent the avoidance of the intention of the Legislature as expressed in previous Finance Acts. Let us clarify our minds as to the distinctions that are to be made between lawful avoidance and illegal evasion. Illegal evasion could be dealt with by the appropriate legislation, but there is such a thing as lawful avoidance. The Revenue Commissioners rightly conceive it to be their duty to direct the attention of the Minister for Finance for the time being if a method of lawful avoidance has been discovered to frustrate the intention of the Legislature. The usual procedure is to advise the Minister for Finance to present to Dáil Éireann in the ensuing Finance Bill an appropriate section to render that method of lawful avoidance no longer lawful. As the years pass, these cases arise; sections are introduced in successive Finance Acts; the law becomes more and more complex until, eventually, it is all brought together within the covers of one document, which then assumes the grotesque appearance of the Bill we are at present considering.

This evil has gone much further in the United States of America. I think we have a lesson to learn from the experience of the people of the United States. I refer to the legislation governing Federal income tax. It has now become such a jungle of exceptions, qualifications and obscurities that the courts themselves are slowly drifting into the position to which Deputy Dunne refers, that is, that they cannot interpret what the Federal Legislature intends to be the law. I do not think we have got that far in this country, but, if we allow the situation represented by this Bill to drift along without a deliberate attempt to simplify the law, we are on the highroad to the situation in which the Judiciary itself will be in the dilemma of being unable to interpret what the Legislature really intended to do. Thus there will be introduced into our legislation the ultimate effect that nobody knows or is in a position to discover what the law is.

Deputy Byrne has referred to the confusion that exists as a result of certain provisions of the 1965 Finance Acts relative to income tax on property developments. Doubtless the Minister has heard of this himself, but to my certain knowledge, one individual of my acquaintance placed a problem of this character in the hands of a reputable firm of solicitors whose considered advice was—and I believe they spoke responsibly and accurately: "If I submit a case to counsel for advice, on this explicit problem there has been no decision and I can divide the Bar approximately fifty-fifty, and I can get fifty per cent of the library to give you an opinion in one sense and fifty per cent to give you an opinion in the diametrically opposite sense. My advice to you is that, if you attempt to have this matter resolved, you must end in the Supreme Court, because the Revenue Commissioners have their view and it does not correspond with yours." No competent tax lawyer in the country can be found to agree with another on this particular problem. Its determination is a matter for the ultimate judicial authority in the country. To create a situation of that kind and to stand over it is, in my submission, highly undesirable from every point of view, because it removes from the law that essential of virtual certainty.

I invite the House to consider for a moment what is further involved. Suppose some courageous litigant goes to court and is brought all the way to the Supreme Court, with all the expense that involves, and ultimately gets a decision there in his favour. He does so at immense cost. But there is no reason at all to assume that the decision secures even for posterity some valuable prerogative, because it will be the duty of the Revenue Commissioners to advise the Minister for Finance that the decision of the Supreme Court is at variance with the intention of the Oireachtas when the original Finance Act was passed and to propose an amendment for incorporation in the current Finance Bill to set right the incorrect interpretation of the section of the Finance Act on which the judicial decision was based.

When we are handing out tributes, we should remember that this consolidation Bill was undertaken by the present Taoiseach when he was Minister for Finance. I do not know who inaugurated the Bill.

Dr. Ryan.

Both Dr. Ryan and the present Taoiseach played their part, as well as the present Minister for Finance, in the deliberations leading up to the Bill. If the present Minister says, when replying, that this consolidation measure is no more than the inclusion of the existing law between the covers of one Act of Parliament for the purpose of clearing the ground, to clear away so far as is humanly possible all the ambiguities, obscurities and complexities of the existing code, then I think we shall all have a very much easier time.

I do not underestimate the formidable nature of that task. I am not really qualified to say in how far the Report of the Commission on Income Taxation set up by Deputy Sweetman when he was Minister for Finance did help in simplifying the law as it stands at present but I am certain that this Income Tax Act, as it will be known when it has passed through the Oireachtas, is fast becoming an instrument of injustice rather than justice.

I want to say something which I think will not please Deputy Sweetman and, I am sure, will enrage my colleague, Deputy Byrne. It is that the average businessman, the average wage-earner or salary earner, the average man going about his lawful occasions and trying to earn his living, is slowly and irrevocably being delivered into the hands of the experts like Deputy Sweetman and Deputy Byrne, Deputy Sweetman being a solicitor highly versed in the law and Deputy Byrne being an accountant by profession, and both dealing with matters of this kind, to the point that, going about your lawful occasions and your lawful work, you are no longer able to comply with the law except by keeping in constant consulation with experts of this kind.

I was recently sitting in the company of quite a distinguished chartered accountant and he used a phrase consisting, I think, of 15 words. I said to him: "Stop, stop; I understand the English language as well as the next one but what does that phrase mean?" He smiled blandly at me and said: "Turnover: it is the new lingo for ‘turnover'." You do not feel you are giving value for money now if you are an accountant and do not refer to turnover as the "arbitrament of the impact of influx and efflux, etc."

Cash-flow is another one.

All that tripe is now becoming the jargon of the Income Tax Acts. If you go back to Baggot, the 19th century economist, you will find that he was the first who said to bankers: "Never allow the atmosphere of mystery that surrounds you to be dissipated; otherwise they will all know that you are just moneylenders with a grand name." They have been wise enough to maintain the mystique and it has almost become a sacrilege to query the omniscient wisdom of the moneylenders in the places in which they live, fattening on the people whose interest supplies them with their handsome living. It is in the power of some of us to separate some of that mystique and expose them for what they are, pursuing the honourable but humble avocation of money lending. It is very difficult for anyone, however eloquent or public-spirited, to expose the mystique built into the 561 sections and the number of Schedules annexed to this Bill. I want to be assured that we are not content in Oireachtas Éireann with consolidating the law and that we have a firm intention to reform it. Can one picture the procedure that will go on in the remote cockloft of Leinster House when the translators begin translating this into Irish?

How much is that likely to cost?

There is a much graver aspect to it than that, and it is that the Bill will not become available and an Act of Parliament until it has been translated.

It will be available as passed by the Houses of the Oireachtas.

Yes. But it will not appear as an Act in the ordinary form until it has been translated and, meanwhile, solicitors and accountants will go around begging for copies of the "Green" Bill as passed by the House——

May I say that it is the intention to have an English-only version of this Bill, as an Act?

Pending the process of translation? I think that is a very wise and sensible provision. Deputy Byrne has spoken with edifying contempt of that fact that this is substantially British law. So is Magna Carta, and it is none the worse for where it is born. This Bill is no better and no worse than what we ourselves would produce because much of what is there comes from what is now relatively ancient British statute law.

I want to say just a few words. I had intended on the Fifth Stage to be more explicit in relation to the work of the Committee and of those who made the work of the Committee so easy. I agree entirely with Deputy de Valera that the staff work was such as I have never seen in any Committee here before. Like Deputy de Valera, I had some experience of the first Consolidation Bill that was sent by Deputy Dillon to this House, the Fisheries Bill. At least in this Income Tax Bill, we did not have to consider the definition of traps and nets and so on, although this Bill is full of traps and nets for the unwary, but it was in reasonably modern language. That does not in any way affect the fact, and it is a fact, that the service we got was something of which those who provided it can very well be proud.

I am grateful for the gracious tributes paid to me by Deputy de Valera and Deputy Booth but in fact it was the other members of the Committee who made the work so easy. There is only one point I want to make at this stage. When the Companies Act, 1963, was published, there was a special issue made available at once on long white foolscap without translation in hard-back covers. It was indeed a vital necessity for practitioners. The same applies to this Bill. If it is not issued quickly in some suitable form like that, it will disintegrate in one's hands very soon. Secondly, I hope it will be possible at a very early date to provide something in the nature of an official index. I understand that some work has already been done towards that end but this is a Bill, which without an official index, will be extremely difficult for a long time for people trying to find their way through the sections. Even though when they get the section they want, they may not be able fully to comprehend the effect of what is there, at least we should like to be able to find our way to the section with reasonable speed.

This is my third point. I do not know whether it will be possible to ensure in relation to this that there will be something in the nature of a copy of the procedure adopted for the stamp duty legislation, some type of loose-leaf binding and printing by which it will be possible each year at the time of the Finance Act to take out the existing pages and put in new ones. I sincerely hope that having regard to the size of this, the major task on these occasions will be to take out pages and that the number of pages we will have to insert will be less. Certainly something in the nature of this loose-leaf system which is adopted in relation to the taxation law in Sweden, so far as I recollect, would be highly desirable. I hope it will be possible to have an undertaking from the Minister that such will be produced at an early date.

Before the Bill passes, I should like to avail of this opportunity to pay tribute to the manner in which the Joint Committee of both Houses of the Oireachtas dealt with this measure. As has already been pointed out by a number of Deputies, this Bill, the largest which has ever come before the Oireachtas, is an extremely complicated piece of legislation, and it is perfectly valid to say that the Committee gave it both detailed and expeditious consideration. When it is enacted, we will have in this country for the first time all the statutory provisions relating to income tax in one Act.

This, of course, will be of considerable assistance to everyone concerned, whether they are concerned as taxpayers, or advisers, or administrators, or in the courts. This is an achievement of which the Joint Committee can very well be proud. I think all concerned should be congratulated. I want to endorse the tributes paid to the Chairman of the Committee especially, and also to the individual members, to the Revenue Commissioners and their staff, the Attorney General and his staff, including the Consolidated Law Reform Office, the staff of the Houses of the Oireachtas and, indeed, everyone concerned in this monumental undertaking.

This is an important and significant step forward, and I should like to assure Deputy Sweetman that the suggestions which he has made are being favourably considered. It would be a pity if, having got this far with the consolidation of the income tax law, we were to allow the situation to deteriorate again at any future stage. We should now continue with the good work and keep the law, complicated though it may be, at least in a readily accessible form. In so far as we can achieve that, I will give the House an undertaking that we will certainly do it.

Finally, I should again like to thank the Joint Committee and all concerned for the excellent work which they have put into this very significant measure of consolidation.

When will the Minister deal with the other half of the problem—corporation profits tax?

I would have to have notice of that question.

Question put and agreed to.