Dáil Éireann debate -
Tuesday, 7 Nov 1967

Vol. 230 No. 12

Finance (Miscellaneous Provisions) Bill, 1967: Second Stage.

Minister for Finance (Mr. Haughey)

I move that the Bill be now read a Second Time.

Deputies will recall that in my Budget Statement this year I announced that I proposed to recast extensively the legislation on the taxation of profits from dealing in or developing land which was originally enacted as Part VII of the Finance Act, 1965 and is now contained in Chapter VII of Part IV of the Income Tax Act, 1967. I also announced that I proposed to include my proposals in a Finance (Miscellaneous Provisions) Bill in the autumn. The recasting of the provisions of the 1965 legislation is the primary purpose of the present Bill. I therefore propose to discuss Part IV of the Bill, which contains my proposals for the replacement of the 1965 legislation, before going on to deal with the remaining provisions of the Bill, many of which are also of considerable importance.

There is no disagreement on the fundamental need for legislation which would charge to tax profits or gains from dealing in or developing land and the criticism of the existing legislation has been directed not at the principle on which it was based but rather at the fact that the tax liability operated over too large a field. The 1965 legislation imposed in the first instance a very wide charge and then excluded from that charge various cases in which relevant transactions could not be regarded as profit-making ventures of a trading nature. The main criticism of that legislation arose from the fact that the exemptions did not embrace all appropriate cases.

I decided at the outset that, instead of attempting to amend the existing provisions, a fresh start should be made. Part IV of the Bill represents an entirely new approach to the problem in that it confines liability to cases in which a business of dealing in or developing land is carried on instead of laying down a very wide charge, with exemptions, as the existing legislation does. The new provisions will be fully retrospective in so far as they give relief, but they will operate only as from the 6th April, 1968, in so far as they may impose any additional charge.

Before going on to discuss the provisions of Part IV in greater detail, I should mention that when the Bill was circulated I invited interested parties to make any representations they considered necessary, and that, in response to this invitation, memoranda have been submitted to me by a number of bodies and associations concerned with tax matters. I have considered the views of these organisations and I have arranged discussions on the points involved in a number of cases. Some of these points have been disposed of satisfactorily either in correspondence or in discussion, and I am considering the outstanding points with a view to introducing any necessary amendments at Committee Stage.

Part IV of the Bill comprises sections 15 to 22. Section 15, which contains a number of definitions and other provisions dealing with interpretation, closely resembles the corresponding section in the existing legislation.

Section 16, the new charging provision, is the main section of Part IV of the Bill. As I have said, it represents a new approach in that it confines liability to cases in which a business of dealing in or developing land is carried on. Broadly, the section provides that certain profits, not taxable under the general law, on disposals of interests in land are to be treated as trading profits and charged under Case I of Schedule D accordingly. The profits concerned are those which would be taxable under the general law, but for the circumstances that the interest disposed of was not the full interest held by the disponer or that he did not acquire his interest with a view to turning it over at a profit.

The modifications of the general law provided for in section 16 will apply only in cases in which dealing in or developing land is carried on in such a way as to constitute a business. The section does not attempt to define the expression "business of dealing in or developing land" but leaves it to bear its ordinary meaning.

Section 17 lays down the principles to be followed in computing the profits of a business of dealing in or developing land which is, or is deemed to be, a trade or part of a trade. Broadly, the treatment provided for is that acquisitions and disposals of interests in land are to be treated as purchases and sales of trading stock. Any consideration other than rent is to be brought in as a trading receipt. Rent is, of course, fully taxable under the general law.

Section 18 is designed to prevent a person chargeable on profits from dealing in land from avoiding liability by buying the land at an artificially high price or selling it at an artificially low price in cases where the transferor and the transferee are "connected" persons within the meaning of section 15 (3) and one of them does not carry on a trade of dealing in or developing land. Instead of the artificially high or low price, the section provides that for tax purposes the price will be deemed to be a price equal to the market value.

Section 19, which is an anti-avoidance measure, reproduces section 101 of the Income Tax Act, 1967 with modifications which confine its application to cases in which the profit arising on the type of sale with which it is concerned would be taxable under the earlier provisions of Part IV of the Bill. The section deals with a case in which a company formed to erect a building would, if it sold the building in the ordinary way, be chargeable on the resultant profit. If, however, effective control over the building were transferred to the prospective purchaser by the sale to him of the company's shares, the previous holders of those shares would, in the absence of special provision, be able to obtain their profit in non-taxable form. The broad purpose of the section is to secure that in such a case the consideration received by a previous shareholder will be taxable up to what would have been his share of the taxable profit which would have arisen to the company if it sold the building.

Section 20 is designed to apply the provisions of section 19 to cases in which another company, or companies, is interposed between a company which would be within section 19 and its ultimate proprietors. Where shares in such a holding company are sold to a person who wishes to acquire a building which a subsidiary has constructed, the seller of the shares in the holding company will be liable under section 19.

Section 21 contains miscellaneous provisions bearing on the interpretation of sections 19 and 20.

Section 22 provides that for the years 1965-66 and 1966-67, Part IV of the Bill will have effect in substitution for Part VII of the Finance Act, 1965 and that for 1967-68 and subsequent years it will apply in substitution for Chapter VII of Part IV of the Income Tax Act, 1967. This is subject, however, to the proviso that, for the years 1965-66, 1966-67 and 1967-68, the application of the new provisions is not to result in increased liability in any case.

I turn now to the other provisions of the Bill, most of which will make worthwhile changes in the law relating to income tax, sur-tax, corporation profits tax and stamp duties.

Part I of the Bill is concerned with Income Tax and contains a number of important provisions.

Sections 1 and 3 implement a recommendation in the Seventh Report of the Commission on Income Taxation to the effect that "the Special Commissioners should be an appellate body only, and that all their administrative functions should be transferred to the Revenue Commissioners, who should not then be ex-officio Special Commissioners". The Commission also considered that the title "Special Commissioners" was not an apt one and recommended the substitution of "Appeal Commissioners". This too is being done.

Section 2 will enable the Revenue Commissioners to delegate to an authorised officer the power to make certain assessments which is being transferred to them from the Special Commissioners by Section 3 of the Bill.

Section 4 deals with the time-limits within which income tax and sur-tax assessments and claims to repayment of such tax may be made. I need hardly remind the House that we devoted a considerable amount of time on the Committee and Report Stages of the Finance Bill, 1967 to this question of time limits. Since the Finance Bill debates, I have given a great deal of consideration to the matter and I have decided, in deference to the views expressed by Deputies on all sides of the House, to provide in this Bill, for the implementation of the recommendations of the Commission on Income Taxation on this question of time-limits for making assessments. Section 4 of the Bill will introduce a new time-limit of ten years within which income tax and sur-tax assessments may be made but this is subject to two qualifications: first, that in a case involving fraud or neglect (which is defined), assessments may be made at any time, and second, that except where there is fraud or neglect, assessments may not be made for a year earlier than 1961-62.

Section 4 also extends to ten years the time-limit for making claims for repayment of income tax and sur-tax subject to the condition that this will not apply to tax for any year earlier than 1961-62. This condition, which is in line with the provision regarding assessments, will ensure that years which are now closed cannot be reopened.

Section 5 creates an obligation on persons who are chargeable to income tax and who have not been served with return forms, to give notice of their chargeability. A similar obligation already applies to persons chargeable to sur-tax and companies chargeable to corporation profits tax.

Section 6 repeals a number of sections in Part VIII of the Income Tax Act, 1967 which are concerned with the machinery for issuing and obtaining returns and other information necessary for the purpose of income tax assessments. The provisions in question no longer serve any useful purpose and some of them could possibly be a source of difficulty. Subsections (2) to (7) provide for amendments which are consequential on the repeal of section 167 of the Income Tax Act, 1967.

Section 7 provides a new relief, retrospective to the commencement of Part IX of the Finance Act, 1963, which concerned the taxation of income from rents out of lands and buildings. The section, which will be of limited application, is designed to secure the allowance of relief by way of carry forward in respect of interest on borrowed money employed in the purchase, improvement or repair of the premises where the taxpayer's circumstances are such that effective relief cannot be granted in the year of assessment.

Section 8 corrects a minor drafting error. Section 9 exempts from Irish tax, with effect from 1967-68, retirement pensions and annuities payable under the United States Social Security Act or the United States Railroad Retirement Act. As things stand, these retirement benefits are not chargeable to tax in the United States and it has been represented that the fact that they are liable to tax in this country is not alone unjust but is also a serious disincentive to persons of Irish origin and other who now reside in the United States from coming to live in this country on their retirement.

Part II of the Bill, which deals with Stamp Duties, contains three sections, all of which are designed to reduce the duties on certain kinds of instruments.

Section 10 is designed to bring the duty on a life insurance policy for a period not exceeding two years into line with that charged on a policy of insurance against accident, by substituting a duty of sixpence for the present ad valorem charge of ten shillings per £1,000 of the capital sum insured.

The purpose of Section 11 is to reduce the cost of equipment-leasing schemes by limiting the charge of Stamp Duty on agreements for the hire of goods, wares, merchandise, plant and machinery to the fixed duties which now apply in the case of hire-purchase and credit-sale agreements. Instead of the existing rate of 2s. 6d. for every £5 of the periodical payment, the new fixed rates will be 6d for an agreement under hand and ten shillings for an agreement under seal. The section also exempts from the greater charge guarantees of sums payable under agreements for hire.

Section 12 is designed to reduce the heavy Stamp Duty which would, under existing law, be charged on a foreign issue of bearer bonds. Instead of the present rates which run as high as £2 per cent, duty will, under this section, be charged at the rate of 2s 6d per cent in the case of a foreign issue of bearer bonds made by a concern within the State and expressed in the currency of a country outside the sterling area.

Section 13 provides time-limits for corporation profits tax assessments corresponding to those provided for income tax and sur-tax assessments by section 4. Section 14 and Part V of the Schedule provide that the appellate functions exercised by the Special Commissioners in relation to corporation profits tax will be transferred to the Appeal Commissioners.

I now come to Part V of the Bill. Section 23 provides that references to the Special Commissioners in the enactments relating to turnover tax are to be construed as references to the Appeal Commissioners. The provisions of the turnover tax enactments containing such references apply also, as appropriate, to wholesale tax. Section 24 amends section 27 (3) of the Civil Service Commissioners Act, 1956, so as to secure that it will apply to persons appointed as Appeal Commissioners as it has hitherto applied to persons appointed as Special Commissioners.

Section 25 is designed to remove a doubt as to whether the Collector General is a creditor within the meaning of the Bankruptcy Acts so as to enable him to take proceedings in bankruptcy in his own name.

Section 26 provides superannuation terms for established Appeal Commissioners who are not established civil servants before appointment as Appeal or Special Commissioners. As Deputies will be aware, it has been a long standing practice to appoint one of the Special Commissioners from outside the Civil Service. The person appointed has usually been a barrister of standing and, because of the relatively late age at which such a person is appointed, the superannuation position can give rise to difficulties. It is essential, of course, that if persons of the required calibre are to be attracted, special superannuation terms should be offered. Since the post of Appeal Commissioner is a quasi-judicial one, it is reasonable to apply to it superannuation terms in line with those enjoyed by district justices and county registrars instead of the normal Civil Service terms.

Section 27 contains the usual provisions on short title and construction.

I think that, in principle, the provisions contained in this Bill will be welcomed by Deputies on all sides of the House. It contains little if anything of a disagreeable nature. Some of its provisions are necessarily complex but I will be glad to give any explanation which may be called for at the Committee Stage.

I now ask the House to give the Bill a Second Reading.

Mr. Sweetman

The Minister is, of course, correct in saying that the main reason for this Bill is Part IV, and the only reason why Part IV of this Bill has to be introduced is because of wooden obstinacy by the Minister's predecessor, who is now Taoiseach, in 1965. In 1965, everyone told the then Minister for Finance that Part VII of the Finance Bill for that year—the part dealing with the profits or gains attached to developing land—would not work. Everybody told him his approach to it was all wrong but he would not give one inch.

What has been the result? One of the worst results of it has been the creation of a shortage of building land around the city of Dublin which has pushed up inevitably the high cost of site developments in and around the city of Dublin. There is no doubt whatever, as anybody who is at all acquainted with the position will verify, that the prime follow-through from the wooden approach in the 1965 Act was to mean that land was held back that otherwise would have been available much earlier for building development. It is only, in fact, since the announcement by the Minister for Finance in the Budget of the broad outline of what was intended now that more land has been coming forward.

While I agree with what the Minister said today at the end of his statement about Deputies quarrelling with this Bill in broad outline now, at the same time it must be put on record that it was the Fianna Fáil Party, and the present Leader of the Fianna Fáil Party, who created the mess from which the present Minister for Finance is trying to extricate the existing legislation. I do not think he has done it entirely successfully in this Bill. I think there is considerable room for uncertainty in some of the provisions of the relevant sections.

The definition section, section 15, and the charging section, section 16, still leave a very great opening for uncertainty. I appreciate, of course, that we shall discuss these things in much greater detail on Committee Stage, but it is only right we should indicate to some degree the defects that people outside see in the interpretation of the Bill as introduced. I am afraid the second paragraph on page three of the Minister's statement is not true. The modifications of the general law provided for in section 16, according to the Minister's statement today, will apply only in cases in which dealing in or developing land is carried out in such a way, et cetera. It does not attempt to define the term "business of dealing in or developing land". It does not attempt to define "business" but it most certainly attempts to define "development"; and one of the quarrels I have with this Bill is the way in which "development" is defined.

As I understand the approach in relation to this Bill, it is desired not to bring into the tax net a person who has no connection of any sort with developers themselves, be they builders or other developers, but who wants to dispose of property so that someone else entirely unconnected can develop it and so that the transaction or transactions by the owner will be entirely capital transactions. I admit that is not a very systematic definition but it is a rough, round statement.

That was what the then Minister for Finance in 1965 alleged he was attempting to do in that year, but we told him at that time that he would not achieve it—that he would merely create a situation in which no one would know where he stood. Everybody will agree, and the Minister for Finance would be the first, that one of the essential things in relation to taxation is that the incidence of that taxation would be certain. Where are we in relation to taking the Minister up on this paragraph dealing with development? "Development" means, according to section 15:

in relation to any land, the construction, demolition, extension, alteration or reconstruction of any building on the land or the carrying out of any engineering or other operation in, on, over or under the land to adapt it for materially altered use; and "developing" and "developed" shall be construed correspondingly.

"The carrying out of any engineering or other operation in, on, over or under the land to adapt it for materially altered use." Take land used as grassland for many years. If it were ploughed, it would have an engineering or other operation. It would be a "materially altered use". If it were then sold, that would be "development". There should not be any doubt whatever that that is not intended in the Bill. There could be, for example, a man—there is one very near my own home—who has some land that he wants to sell for building sites, which is entirely desirable. He fences three sites off and sells each of these sites to three different people who want and need a site badly to erect a house. The mere fencing-off of these sites undoubtedly brings him within the phraseology of "development".

When one bears that in mind and when one goes on to consider, then, the wording of section 16, we see that the activities of a business of dealing in or developing land are included in that section. The word "business" is not defined. It is undoubtedly not merely possible but easy to argue that the sale of sites 1,2,3, consecutively, in a short period of time, means that there is a business in selling sites. Because of the word "development" and the meaning of "development" in section 16, it means that the man who has marked off and fenced off these three sites is thereupon involved in the business of developing land under this section and, as such, is subject to what in fact is, in that case, a capital gains tax.

If we are to be able to provide—I think we should provide—a method by virtue of which there should not be a capital gains tax on one sort of property alone, then it seems to me clear that we must make this Bill far more certain and, at the same time—and I give this completely to the Minister— make it far more certain in a way that will not permit of avoidance by those who are in fact engaged in what we commonly call the building industry. But we must make the provisions of the Bill such that the ordinary case cannot be caught.

This is not something that has been thought of merely by one or two people. Virtually every memorandum I have seen on this Bill, and every article that has been published in any paper, makes the comment that there is no certainty that the type of capital transaction that I have indicated will not be caught. It is all very well to say that this is not intended and that nobody need worry about it. That was one of the arguments used in relation to the 1965 Act. Yet, the effect of it has been that, since that Act was enacted, a great deal of time and ingenuity has had to be spent in endeavouring to see if ways could be found to ensure that, within the provisions of the law, people would be enabled to carry out their business as the then Minister for Finance suggested they should but which, in fact, within the ambit of that Bill, was not possible and, in consequence, many people held back what otherwise would have been satisfactory building sites, with the consequent scarcity which we have seen in the past two years.

The Minister, I think, quite deliberately, probably, used the word "business" and refused to define it but made the mistake, as I have indicated already, in doing that, of defining another word that came into the operation of the section. As far as I know, the first use of the word "business" in a taxing Act was in 1915 in the excess profits tax inclusion there. It was used, further on, in corporation profits tax. Since then, the courts have always construed the word "business" in tax cases in its widest possible sense.

When one considers that aspect on the one hand, and when one considers, on the other, that the business must be related to the definition included in subsection (1) of section 15, which definition includes for "development""any engineering or other operation in, on, over or under the land to adapt it for a materially altered use" we then see that this so-called relaxation as drafted now is something that requires much more than the wooden approach of the Minister for Finance of 1965. We shall have opportunities, on Committee Stage, of going into the wording of it.

Let nobody think, however, that the Minister for Finance, in introducing this Bill, is conferring a great Fianna Fáil benefit on mankind. He is making an effort to redeem or to attempt to redeem a serious blunder made by his predecessor who is now the Leader of his Party and of the Government. The reason I have said "attempt" is that I think the Minister has completely failed in his purpose. The memoranda submitted to the Minister by some of the people concerned indicated their difficulties in this respect. I know that some of these bodies, in submitting memoranda to him, have had the advantage of opinions of counsel well qualified to deal with company and taxing matters. We have seen similar comments in the newspapers. An article in the Irish Times of 3rd October, 1967, for example, makes it clear that the weakness of the Bill lies in the charging section. It seems, according to the barrister who made that comment there, that the attempt to be definitive has had the result that a charging section with the dual purpose that is involved in section 16 seems to include virtually any transaction without exception.

The Minister must also take note of articles that were written in another newspaper. Unfortunately, I have not got the date of it and I think by the type that it was also the Irish Times but I am not sure. In it comment was made on the wide legal and judicial definition of the word “business”. In the article it was set out that if the courts here were to follow the definitions in British courts of “business” in the various tax cases that have been heard it would seem inevitable, on the same line of reasoning, that anyone who sells land with a view to profit must be held to be carrying on a business of dealing with lands, no matter for how long he had held that land, no matter whether the necessity for the sale of the land arose because, perhaps, of death duties payable on the death of a predecessor in title, or perhaps because of a sale being necessary by reason of the Landlord and Tenant (Ground Rents) Act, or any other reason of that sort where property is sold by consecutive transactions rather than by one global transaction.

I do not think that the effect of that uncertainty that there is in relation to Part IV of this Bill is going to achieve what I desire, that there would be a greater availability of sites for building without the capital gains tax on that availability. We shall, therefore, have to consider very carefully in Committee the desirability of an amendment to it. I should like also, apart from commenting on Part IV, to ask the Minister some general questions in relation to taxation. I understood that we were going to have made available to us a copy of the Income Tax Act, 1967, in loose-leaf form. I am disappointed to see that there has been no progress yet towards that availability. The loose-leaf edition of the stamp legislation has been of inestimable value and it is to be hoped that something similar will be made available in relation to the very bulky income tax volume.

I understood also, as I am on the question of separate types of Acts, that we were going to see long before this a new consolidating book, as apart from consolidating statute, in relation to the Death Duties Acts, that we were going to be able to get something in relation to death duties on the same basis as we have already got in relation to stamp duties. I am disappointed that the Minister has not made adequate staff available to get that work done. I say that the Minister has not made adequate staff available to get that work publicised because I know that those who are concerned in the Estate Duty Office in the preparation of that type of volume, from the Assistant Secretary in charge of that office downwards, must be, and are, particularly anxious to provide that the benefit of their work and research would be available to the public as a whole.

I must confess also that I find great difficulty in understanding section 2 of this Bill and the manner in which there has been no restriction at all in it. As I follow it, it says that anything that the Revenue Commissioners may do they may delegate to any officer, no matter how lowly or how junior that officer may be. It is no argument to say that the Revenue Commissioners are not going to delegate their function too low, there should be a statutory restriction in a delegatory power of that sort to make quite certain that the delegation must be held up to a certain level and that they cannot delegate functions below that particular grade. In fact, there has been a general tendency in all legislation, not merely in taxing legislation, to provide that where a Minister is empowered to delegate to certain personnel that the grade to which that delegation can be effected must be specifically nominated. It is widely so in various aspects of the Land Acts, in Agricultural Acts, Fisheries Acts and in Factory Acts where there is any question of inspection and so forth. This is the nearest analogy I could get to that.

There has been a lot of ballyhoo by the Minister and by people writing about this Bill in relation to section 4. I do not think that section 4 conveys at all the widely publicised benefits that are alleged in respect of it. What does it say? It says that an assessment cannot be made at any time later than ten years provided that it is not a case in which there has been any form of fraud or neglect. Of course, we all accept that if there is any question of fraud at all the Revenue Commissioners must be entitled to go back. There was considerable argument here about whether the fraud was to be fraud in the opinion of the Revenue Commissioners or fraud in the opinion of the courts. That seems to be gone now. Then it refers to any form of neglect. There is, for example, a statutory obligation on every person to produce a proper return of his taxable income. If a person sincerely believed that something that has occurred in his affairs was not taxable, did not, therefore, include it in his return and it was discovered by the Revenue Commissioners 12 years later, he could be made amenable for it under this section because he had been in neglect of the statutory obligation to return all his income. That is no concession at all.

Mr. Haughey

It is all you asked for.

Mr. Sweetman

No, it is not. What we asked was in relation to preventing fraud but otherwise to provide that the ten years would be there. But it virtually means, because of the statutory provision, that every single case can be caught without any restriction to the ten-year rule. I thought also that there was a clear implication in the report of the taxation commission that, while there would be the restriction on the one hand for ten years, equally on the other hand the period for repayment would go back for ten years. In fact, it does not. The effect of subsection (5) (b) of section 4 means it goes on from 1961-62 but not behind that year. In other words, it goes back six years from now but hereafter the restriction is for ten years, not six years. The same balance is not preserved. What is sauce for the goose should be sauce for the gander.

Mr. Haughey

It does do that.

Mr. Sweetman

If the Minister considers subsection (5) (b) he will find it does not operate in that way. The reason in relation to the provision for neglect is contained in section 5 of the Bill itself, which provides for what is, in fact, neglect. Some people might say that section 8 reveals that there is something slipshod in the consolidating Income Tax Act of 1967. It is a tribute to those who drafted and dealt with that Act that only a very trifling thing like this has turned up.

I will admit frankly I do not quite follow the reasoning behind section 12 of the Bill unless because where bearers of securities are transferring outside the State it would be virtually impossible for the Minister to succeed in any event in collecting duty. He may have been making the best of a bad job in making it not illegal to have these transfers because, even if they were illegal, he would have no power to control operations outside Ireland.

There are some other matters I would have hoped the Minister would have included in his Miscellaneous Provisions Bill. One of the effects of the rebate and allowances provided in relation to children for death duty purposes in section 29 of the Finance Act, 1965, as amended by section 19 of the Finance Act, 1966, has been that, where there is a provision that a child will succeed if and when it attains a certain age, then no allowance for death duty purposes is given in respect of that child when the claim arises. It means, therefore, that if there is a provision that a testator, for example, gives property to a widow for life and equally among such of his children as may attain the age of 21 years, no allowance is given for the children at this stage. When the children do attain 21 years the allowance is then given. That is a most cumbersome method of dealing with the situation. It would be far better to reverse it around and to provide that the allowance would be given forthwith, but that if a child died and did not for that reason attain a vested interest, if his or her contingent interest became divested, there would be an extra claim for duty to the extent of the allowances made. Otherwise, duty has to be paid now with a rebate later on, with the consequent trouble involved. In addition, it means that the duty is being paid at a time when there is inevitably a greater shortage of funds rather than when, by reason of a death at a later stage, a claim would not arise.

Complaint has been made to me also in relation to section 9 of the Bill, which exempts payment under the American Social Security Act and the Railroad Act there. The complaint is that it is unfair to people afforded a pension by a foreign government, particularly people forced to emigrate in their early years, who then came back here to finish their days in their own country. Why would they not likewise receive the concessions included in section 9, particularly when we bear in mind that by their coming here they are improving our balance of payments position? I was surprised, too, that the Minister did not in relation to a miscellaneous tax Bill consider attuning our taxation laws more to the European Community. Perhaps he has made up his mind that that is so far away he is going to have plenty of time to consider what would be desirable there.

The basic problem every individual has to consider in relation to salary is what his take-home pay, his purchasing power, is going to be. I came across this week in one of the journals, Management Today, some rather interesting figures, which, unfortunately, do not include us. It makes quite clear one of the reasons why they are complaining on the other side of the brain drain. When we go on to consider how we stand in relation to similar people in the United Kingdom, we can see that we are in the same danger. In terms of a person carrying on the same job in the UK, Germany, France, Holland, Italy and Denmark, the job has been assessed by this international firm as carrying in the United Kingdom a salary of £2,000 a year—and this is before tax—of carrying in Germany the equivalent of £2,600; in France, £2,780, in Holland, £2,410; in Italy, £2,540, and in Denmark, £2,600. The purchasing power, after taxation has been taken, is, in the United Kingdom, £1,640; in Germany, £2,110; in France, £2,020; in Holland, £1,740; in Italy, £1,820; and in Denmark, £1,620.

Taking that analogy, and so far as we can make an analogy here, after any provisions of the 1967 Budget, it would seem that our people, whom we must consider from the point of view of a brain drain would be about equivalent to the United Kingdom personnel, would be very much worse off than the French because there is a quite substantial percentage worsening as between us and France. Our take-home pay would be about 85.4 per cent on this level for a married man with two children, as was the assessment taken in Management Today to which I have referred, compared with 94 per cent of France. We would be worse off than all those countries in the Community, even if we are to accept that we are more or less on a par as regards purchasing power and take-home pay after tax, with the United Kingdom. That will not help us at all to develop in this technological age when we must make an effort to take advantage of every possible piece of brainpower that the country has and could use.

I was hoping, too, we might see in this Bill something towards the oft-expressed views of Fianna Fáil Ministers for Finance that we intend to do something to streamline and to reduce the Civil Service. I remember the great flourish of trumpets that the then Deputy Dr. Ryan made when he took over as Minister for Finance and said he would succeed in reducing the numbers of civil servants and streamlining the Civil Service machine. We have had that intention or promise oft-repeated by Fianna Fáil Ministers for Finance. We have not seen any sign whatever of their being able to make any successful move in that direction.

I wonder did the Minister, if I might conclude in a lighter vein, come across an article by Anthony Lejeune where he advocated that the only way of reversing Parkinson's Law in relation to a civil service was to provide that any civil servant who succeeded in abolishing another civil service post should for the remainder of his career receive the salary of both jobs.

Mr. Haughey

That would be a sort of cannibalism.

Mr. Sweetman

Without going quite as far as that, I do think there is not enough inducement in the Civil Service for people to provide ideas, to push their ideas and to ensure that, when they see, as many of them do, personnel waste, and waste in administrative procedures, that waste would be eliminated. The tendency, unfortunately, is far more the other way. I would have hoped, without going further into that humorous vein, that we would see some real results along the road of streamlining the Civil Service today in Ireland and making its procedures more in accord with the job that has to be done by a civil servant nowadays, which is not merely restricted as it used to be in the Department of Finance to preventing unauthorised expenditure. The job should be very much more to ensure that there is better value for that expenditure, and that the productivity which is so frequently preached by Ministers for Industry and Commerce would be brought home to the Departments of which Ministers are the political heads.

Mr. James Tully

This measure like all tax legislations, is mainly a Committee Stage Bill, and to try to discuss it properly here tonight would take very much longer that is available to us. I propose therefore to be very brief, but there are a few comments which I think should be made.

Deputy Sweetman referred to the brain drain and expressed concern about the effect of the tax laws on the people in that category. I would be more concerned about the brawn drain because the tax laws on those who are earning by the sweat of their brows, so to speak, are so severe that the drain from this country is very substantial. A question answered today by the Parliamentary Secretary to the Taoiseach showed that there was a loss of 150,000 jobs from 1951 to date. I am afraid a lot of this can be put down to the fact that our tax laws are becoming more and more severe on the unfortunate man who has to earn his living as a labourer or a craftsman.

I do not know whether the Minister remembers, but when the Budget debate was going on in this House earlier this year, I brought to his attention the fact that since 1955 no alteration has been made in tax concessions to workingclass people, that at the time the taxable income of a single man was about £6 5s. per week, and since the average wage in rural Ireland, indeed in many of the towns, was then about £5 a week, he could earn over a £1 of this money or one-fifth of his earnings as overtime without being taxed. We have now reached the stage where wages are between £9 and £14 and the taxable income is still around £6 5s.-£6 10s. It is ridiculous that when legislation dealing with taxation is introduced, some attempt is not made by the Minister to remedy such a situation.

I agree also with Deputy Sweetman when he says that what is sauce for the goose is sauce for the gander. The Minister said that the same law applies to tax assessment as to the question of the date from which tax can be recovered. I have been reading through the Bill. It did not appear like that to me but if the Minister says it I will take his word. There is very little concession made for the person who has made a mistake. The Minister uses the words "fraud or neglect". All of us will accept fraud. An error of any kind can be attributed to neglect. A person deemed guilty of neglect is liable to have his assessment brought back to the commencement of the State. The case was well made before by a Deputy on these benches that a person might have been in a position to pay tax if it was known to be due whereas ten, 15 or 20 years later that person might not be in a position to pay the tax without grave hardship. If, due to error on the part of a citizen, liability to tax was not apparent it is most unfair that tax should be recoverable with the result, as in one case that I know of, a person in a small line of business could be put out of business. The Minister should have another look at that section. "Neglect" covers a multitude and the Minister might be a little more explicit.

In my opinion, Part IV is the kernel of the Bill. We will all welcome anything which will obviate a situation which has been building up for a number of years, mainly due to the Planning Act of 1965, that the amount of building land available became scarcer and scarcer and people were being forced into areas around towns and cities and even villages. While this was happening the sharks were sailing around waiting for somebody to tip them the wink that certain areas would be areas for development and then they bought up all the land and waited for the demand to grow, until the scarcity of land became apparent. The result is that land which they bought at £50 to £100 per acre is being sold at £500 to £1,000 for a site comprising 50 feet by 100 feet. Anything which will have the result of taking illgotten gains from these people should be welcomed by the House.

We talk about what happens in Dublin City, but I know of rural areas where the local authorities have been asked for £2,000 per acre for undeveloped land because the people who own the land or who had bought the land in a hurry realised that they could cash in. The local authorities could not buy it and the persons concerned were able to hold on until somebody with more money came into view and then they made a quick profit and got out.

There is one other matter about which I am not clear and the Minister may possibly explain it. The definition of land is probably in some other Act. It is not in this Bill. Do sites on which there is already a building constitute land? If so, does it mean that somebody in this city who buys an old building and allows it to go into disrepair, knocks it down or resells it, is caught by this Bill or is he able to get out because of the fact that there is a building on the site? Recently I had the experience of the argument being successfully upheld that a site was not land within the meaning of the Act. Would the Minister tell me whether or not the definition is contained in some other Act and, if not, what is land within the meaning of this Bill? It is important that this should be known.

There is far too much of this thing of people thinking it is smart to know how to get information and how to use it and that we should be inclined to be amused by the clever fellow who has got enough money to use information —no matter where he got it. We should remember that these people are doing a great disservice to the State and to their neighbours and to those waiting to get homes of their own. While this Bill means that the State will get certain moneys from these people it will not remedy the situation because, as Deputy Sweetman has said, a great deal of harm has been done over the past few years and I would agree with him that the Finance Act and the Planning Act of 1965 were mainly responsible for the situation that we now have.

Has the Minister any comment to make on the question of streamlining our tax laws? We hear a great deal about the EEC and the harmonisation of tax law that is in operation. Has the Minister considered that matter or will he continue the existing tax law? Does he feel, as Deputy Sweetman suggested, that there is ample time in which to make a change and that the next decade does not matter very much as far as harmonisation of tax law is concerned?

Mr. J.A. Costello

Notwithstanding the rather murmured remarks of the Minister towards the end of his introductory statement, I understood him to say something to the effect that there was nothing very distasteful in this Bill. I must take issue with him on that. I think the Bill could generally be described as another piece of machinery emanating from the Department of Finance designed and calculated for the express purpose of enabling the Revenue Commissioners to get more money from the taxpayer and to cause greater anxiety and more concern to the unfortunate people who are the subject matter of the Revenue Commissioners' researches. Certainly, whether that description of the Bill be correct or not, there is no question whatever that there is not a single portion of this Bill that gives the taxpayer any ease of any substantial measure at all and there is certainly nothing in it that conveys any incentive to industry to expand or any hope for a further increase in agricultural or industrial employment or production. This is a Bill merely to get more money, as I understand it, and it will cause more anxiety, concern and harassment to the taxpayer.

It will be of no great consequence to the ordinary taxpayer to know that this Bill will give a measure of relief to those people who are unloading foreign bonds in this country. It will not be of great concern to anybody to learn that that heavy taxation will be relieved. There is very little hope either for the general taxpayer in the reduction from 10/- to 6d on the very small policies of insurance referred to in the Bill.

I can see nothing in this Bill to give any hope to the taxpayer, nothing in the Bill to fulfil the functions that a Finance Bill ought to fulfil as being an instrument of economic concern and the furtherance of the economic betterment of the country.

Deputy Sweetman has referred to Part IV, and so has Deputy Tully, on the question of what is now to be called, as I understand it, taxation of the business of carrying on the development of land. Deputy Tully will have no great difficulty in learning from experience that in no Act is there a definition of "land." So far as I can see this is a matter more for Committee Stage than Second Stage. The part of the Bill dealing with the carrying on of the business of development of land may result in bringing more revenue into the Treasury, but it certainly will not result in bringing more houses at economic rents or prices to the hard pressed community who are looking for houses.

As I have already said, this is really a Committee Stage Bill. I want to deal with two topics only in any great detail. I should like to deal first with the provision relating to the Appeal Commissioners. This was put in at the outset of the Bill and I suppose the Minister, when he said he was carrying out the recommendations of the Commission on Income Taxation, thought he was doing something grand. It goes a little distance, but only a very little distance, to cover the area dealing with these Appeal Commissioners. This should have been long since covered, and it should be covered in this Bill. These people were known as Special Commissioners and the Minister is now calling them Appeal Commissioners. He is taking away the administrative duties which they had before, nominally at least, but which in recent years they did not carry out to any great extent. They become Appeal Commissioners.

The House should appreciate the fact that these people who are now called Appeal Commissioners are very important from the point of view of the taxpayers. They should be their guardians and the persons to whom they can look for justice from excessive depreciations by income tax inspectors, and excessive charges for income tax and sur-tax. They are the persons provided by law for appeal against assessments of income tax and other surcharges of that kind. They ought to be in a judicial position. It is recognised in this Bill that they are not in a judicial position. The Minister gave the show away, gave his whole case away, when he said they are in—and I think this is the phrase he used—a quasijudicial position. If that is the position he wants them to be in, and that they are in under this Bill, the sooner they are taken out of that position the better.

They ought to be in a judicial position and they are not in that position at present. That is what I want to advocate on this stage of the Bill and in subsequent Stages, so far as I can. They are called Appeal Commissioners and they should be judicial functionaries. Their whole function should be to stand between the taxpayer and the Minister for Finance. The taxpayer should be in a position to know that when he goes to have his case heard, the person hearing it is independent of the Minister for Finance, a person he can trust to give an independent hearing to his case, and that they are not civil servants as they are at present. Some little advance has been made. When I went originally as counsel before the Revenue Commissioners— these people were called Special Commissioners then—they were sitting cheek by jowl with the inspector of taxes before the taxpayer I was representing came into the room and they had probably discussed it beforehand with him.

Mr. Haughey

Why did not the Deputy change it when he was Taoiseach?

Mr. J.A. Costello

Why did I not get a little longer and I would have done a lot more?

Mr. Haughey

I am doing it.

Mr. J.A. Costello

The Minister is not.

Mr. Haughey

I am doing it.

Mr. J.A. Costello

I was in office for 6¼ years altogether. I forget the number of years Fianna Fáil have been in office—about 20 years.

Mr. Haughey

It is being done now.

Mr. J.A. Costello

It is no answer for the Minister to ask why I did not do it.

Mr. Haughey

It is being done now.

Mr. J.A. Costello

They are now to be called Appeal Commissioners but they are being allowed by a subsequent section in the Bill to remain civil servants. Section 24 provides:

Section 27 (3) of the Civil Service Commissioners Act, 1956, is hereby amended by the substitution of "under section 156 (1) of the Income Tax Act, 1967, to be an Appeal Commissioner" for "under subsection (1) of section 67 of the Income Tax Act, 1918, to be a commissioner for the special purposes of the Income Tax Acts".

Section 27 of the Civil Service Commissioners Act, 1956, provides that the Special Commissioners who are now to be called Appeal Commissioners are to be appointed by the Minister for Finance in an unestablished position unless he makes them established. The position is that they are to be appointed by the Minister for Finance, in an unestablished position, as civil servants and to remain civil servants, servants of the Minister for Finance who is collecting revenue from the taxpayers and they are supposed to stand in a judicial position between the taxpayers and the Minister for Finance. It is utterly wrong that that should be so, and the Minister merely glibly throws across the floor of the House "Why did you not do it?" That merely shows how weak is the ground he feels himself on. Whether I was wrong does not answer the question and whether I should have done it does not answer the question.

These people are Appeal Commissioners and they are being allowed under this Bill to remain civil servants appointed by the Minister for Finance in an unestablished capacity, if the Minister thinks that right. No judicial person should be in that position. How will they get the trust of the people whose cases they are trying unless they are in an independent position. These people should be independent of the Minister and there should be a provision in this Bill to the effect that they hold their office, like judges, on their good behaviour and they should be appointed by the Government certainly, not by the Minister for Finance.

Major de Valera

Where does the court come in here?

Mr. J.A. Costello

Deputy de Valera has long since ceased practising as a barrister——

Major de Valera

Is the judicial side not covered? Has the person not got his ultimate judicial remedy?

Mr. J.A. Costello

He should not be put in that position. He should have this resort to a cheap and easy tribunal.

Major de Valera

The Appeal Commissioners are the administrative side. The courts are functioning the other way.

Mr. J.A. Costello

That is absolute nonsense. This is supposed to be a cheap tribunal of easy access. A person is supposed to be able to go in with his accountant and deal with the matter in a business-like way and not have to go to the expense of going to the courts. This is what should be done here. It should be taken away from the Department of Finance and given to the Government—like the judges. These people should not be in the position of being unestablished civil servants. They have to deal with taxpayers' rights of a very difficult and very trying character. They are vital to the taxpayer.

The second and last point I want to speak to on this Bill has already been dealt with by Deputy Sweetman and Deputy Tully, that is, section 4. This section means, in fact, that there is no limitation in relation to the raising of additional assessments no matter what the period of time. As has been stated both by Deputy Sweetman and Deputy Tully, nobody objects to the Revenue Commissioners having power to make additional assessments when fraud is involved.

No matter what the Minister may say, I can say for myself that I personally took away from the Land Commission the privilege of having unlimited time for the recovery of debts. That was done under the Statute of Limitations. Revenue are the only ones left now and this means that there will be no statutory limitation of any practical kind in connection with the assessment of people. There is no doubt about that. The Minister was an accountant and he must remember; there is no doubt about that proposition. I know places in which pressure was brought to bear and the people involved suffered nervous breakdowns and were almost brought to the verge of insanity. People go through quite extraordinary mental anguish when they are caught up in the turmoils of income tax.

There should be a specific limitation on the right of an inspector of taxes, or anybody else, to re-open a transaction that has been closed, unless on the grounds of fraud. Fraud is always a let-out in relation to a statutory limitation. The situation should be the same for the Revenue Commissioners and only in cases of fraud should they be allowed to re-open transactions. Under this section, any transaction can be re-opened up to a period of ten years. Thereafter any transaction can, in effect, be re-opened because of the definition of neglect. I should like Deputy Tully to consider the position of a workingman under this section. He is bound to write to the inspector of taxes or walk into the office and say: "I am subject to tax. Will you please assess me?" It will be a new thing in this country to have people in the category of workingmen, who are subject to income tax, having to walk in to the inspector of taxes and ask him to please assess them. If a workingman liable to income tax does not do so, he is liable to a penalty and ten years later he is liable to have his entire tax position opened up.

In subsection (2) (b) neglect means negligence. As has already been pointed out, negligence has a very wide interpretation. An honest mistake can be made; that honest mistake can result in a person being harassed by an inspector of taxes for 15 or 20 years afterwards. Neglect means negligence or a failure to give notice. An unmarried man earning £20 a week must sit down and write to the inspector of taxes telling him that he is liable to tax. If he does not do so, he can be assessed any time thereafter. To say there is nothing distasteful in this Bill is a misdescription.

Mr. Haughey

The Deputy is a very ungenerous man.

Mr. J.A. Costello

I am a very realistic man. I know what I am talking about, Everything I have said stems from genuine practical experience. I know what has happened. I know the effect of income tax letters on people, particularly on elderly women living on fixed incomes. They go through torture.

Mr. Haughey

But this is improving the situation. It is putting in a statutory limitation.

Mr. J.A. Costello

My criticism is that it seems to do that, but, in fact, it does not.

Mr. Haughey

This is what the Deputy's Party spokesmen asked for.

Mr. J.A. Costello

I do not know what my Party spokesmen asked for.

Mr. Haughey

Clearly the Deputy does not.

Mr. J.A. Costello

I know of no Party decision asking for this, that, or the other. This is nonsense and the Minister is reduced to a low level indeed if that is the only answer he can make to cogent, practical considerations.

Mr. Haughey

We had a reasoned argument on the Second Stage of the Finance Bill and the Deputy's Party asked for this.

Mr. J.A. Costello

I am criticising this Bill and, if the Minister can answer my criticism, let him answer it by reasoned argument. It is no argument to say that somebody's spokesman said this, that, or the other, and it shows that the Minister is in a parlous position indeed when that is the only thing he can say.

Mr. Haughey

The Deputy is a very ungenerous man. We are being very generous.

Major de Valera

It is a pity— perhaps it is the by-election—that Deputy Sweetman introduced a particular note into his speech on this Bill. I am sorry that happened because it would have been better had he approached this in an objective way. Extreme interpretations do not help. I am sorry Deputy Costello has left the House because I wanted to ask him a few questions.

In this Bill the Minister is obviously trying to meet a certain situation and certain arguments which were made. I have no close association with either the Department of Finance or the Revenue Commissioners and I hold no particular brief for them, but these people have a job to do. Nobody will agree with that quicker than Deputy Sweetman.

Mr. Sweetman

And Deputy Sweetman never says anything to the contrary.

Major de Valera

I do not want to introduce a personal note. I want to talk about the job of work that has to be done by the Department of Finance and the Revenue Commissioners. I should like to remind Deputy Tully that we are all very vocal when we want something. We are very vocal about social services and all sorts of State expenditure, but we seem to take a different line when it comes to the question of getting money to pay for it. That might be a salutary thought to start a discussion like this. We have had huge State development sought by every Party in this House and that development has to be paid for. Therefore, we must face a Bill of this nature with the realistic knowledge that no matter how much a Minister wants to do—and in this case the Minister is trying to meet the constructive points made on a previous occasion—he and his Department have the task of seeing that revenues are furnished for running the State.

The reason I make that comment is simply because extreme attitudes such as those adopted by Deputy Costello do not help in those circumstances. Those problems are not easily solved nor can they be solved as Deputy Tully seems to think when he talks about relief of taxation and so forth. Deputy Tully on other occasions would be the very one who would want to spend more money. If we can get this Bill back into perspective we might get further on it.

To my mind it is encouraging that even with the pressures that are there in modern times a Bill like this should be introduced with the present approach behind it. I have no doubt I could suggest some very admirable amendments or suggestions for inclusion in this Bill which would get very popular acclaim but I can equally well imagine that these could hardly be implemented for very good and practical reasons. What really got me on my feet about Deputy Costello's speech was his strong advocacy. There might be a different point of view on this. I for one am prepared to advocate a different point of view on the function of the Appeal Commissioners. He seized on the word of the Minister "quasi-judicial". I want to say that provided the proper judicial functions are preserved it may be administrative efficiency to provide for quasi-judicial functions within the framework of the Civil Service which may save time and money for the State and for the client. I would go all the way with Deputy Costello if there was not the judicial appeal available but as I understand it and I would like to be corrected on this if I am wrong, I have not practised law for 17 years——

Mr. Sweetman

Is it as long as that?

Major de Valera

It is 17 years.

Mr. Sweetman

Time goes very quickly.

Major de Valera

If I am wrong I would like the lawyers to correct me but I seem to recollect, having done income tax cases both in the High Court and the Circuit Court—I do not know whether they still go on, Deputy Sweetman could tell me that——

Mr. Sweetman

I would not like to be out of order.

Major de Valera

I fail to see, when there are appeals to the court available, the force of Deputy Costello's argument. On the other side, I see the advantages of having an administrative procedure that will make it only necessary to appeal to the courts when there is some fundamental question of right or where the court should be appropriately invoked. The difficulty about this taxation business is that it is so much on the borderline between what I might call individual rights which must be safeguarded and administration. I would be prepared to argue the case for the present set-up if Deputy Costello were challenging that, always, of course, on the basis that there is the appeal to the courts. On the other hand, I would go a little bit further and perhaps tease Deputy Costello with this thought: there are a number of people who are concerned and I am one of them with the constant filching of jurisdiction—I do not want that word "filching" to be taken in any wrong sense—but there is under modern conditions in every modern state that I know of this side of the Iron Curtain a tendency for judicial functions and jurisdiction of the courts to be appropriated by the administration in the name and under the duress of efficiency. This, I feel, is something that should be resisted as far as possible. The stock argument against the normal procedure of the courts is the question of time and cost but notwithstanding that I feel the principle is extremely important and that it is better wherever possible to leave the full jurisdiction in the courts. If Deputy Costello wants to set up a fully judicial tribunal within the Service or something like that it seems to be cutting across the appropriate functions of the courts. At least that is how it seems to me. It was to make those points that I got up. The difficulty about Deputy Costello's point is his extreme advocacy here and his extreme interpretation and approach to this which has not been very helpful and there is another point of view.

To my mind an important thing is that machinery provides as far as possible for fairness. I hear an awful lot by implication. It seems to be fashionable to suggest that all inspectors of taxes and people like that are ogres going about seeking whom they may devour. I have no brief for them but there are an awful lot of people who would evade their lawful debts also and there is a function to be performed for the community here. I do not think it helps to approach the taxpayer on the basis that he is a complete criminal because most people are fundamentally honest and let me say that one can go too far in assuming powers just to get those people who are fraudulent but there is a balance to be struck. But then, one should also realise that the people with the responsibility of dealing with these matters on the official side are equally worthy human beings and that, by and large, the same standards of integrity and honesty at least would be found among them as among the body of the public. There is no point in approaching this from the ogre complex point of view.

Mr. Sweetman

Surely I did not suggest that?

Major de Valera

Indeed, I did not accuse the Deputy of that.

Mr. Sweetman

I thought the Deputy did.

Major de Valera

What I did accuse the Deputy of was setting the ball rolling on the wrong lines with a somewhat carping approach to this Bill. I did not accuse the Deputy of the other certainly. When Deputy Sweetman intervened I was about to say that one of the things that has struck me outside — Deputy Byrne might perhaps confirm this—is that accountants and people who have to deal with the State machinery in these matters—I have very seldom heard anything from people of that category who are dealing with those problems that would suggest what I might call any shortcoming in the personal way or in integrity. They quarrel with the legislation and the interpretation of it but I have very seldom heard anything in that way that would remotely suggest anything touching on the integrity of the body administering the law in this regard.

I might recall something which was said already, and which I see no reason for not saying again. I refer particularly to the committee which sat on the Income Tax Bill. Those of us who sat on that committee certainly had an opportunity of seeing the point of view from which the whole problem of taxation was approached and the efficiency of the approach. Everybody without exception expressed their admiration—I do not think that is too strong a word to use as the record is there— for the people who deal with taxation. I feel it should not be necessary to say those things but for the suggestion of Deputy Costello that there is something all wrong. I do not mind that he reacted to something that was said but when he was talking he said if he had so many years to do it he would have done this, that and the other. Was there so much to be done in that particular way? There will always be plenty to be done but the suggestion that everything was completely wrong from the very beginning may be a misleading one for a debate such as this.

There is one thing which perhaps I might ask in common with Deputy Sweetman and that is in connection with the question of limitations. Everybody agrees that if there is any taint of fraud there should be no limitation. Deputy Costello recalled that the Statute of Limitations had tidied up a number of those things. If there is a point, as Deputy Sweetman seems to think, that the limitation might be more explicit, we might work at that but that is a detail which we can take on Committee Stage. I think this is a Bill which can fairly be described in the words which the Minister used at the beginning and that as I have said at least twice already and if it is used for the scoring of points it does not help with this type of legislation.

Mr. P. Byrne

With regard to Deputy de Valera's last point it cannot be too often reiterated, particularly from this side of the House, that we in this country are most fortunate that we have in the Revenue Commissioners and in their staff from the inspector of taxes down, as indeed we have in the entire Civil Service, a body of dedicated men of high integrity, whose service to the State is probably without parallel. Deputy Sweetman has frequently made that point but in so far as Deputy de Valera appears to imply that we on this side of the House have been harping in a personal way where State officers are concerned, I hasten to assure him that this is not the case.

Indeed, I am only too well aware that at the present time inspectors of taxes are overworked and under-paid. In passing, I would mention to the Minister if this is so still more is the case that the professional gentlemen who deal with them primarily, namely the Minister's professional colleagues and my colleagues, are subject to tremendous harassment with staff difficulties and shortages at the present time and so far as the computer is now working efficiently the assessments this year in the Dublin area have been out three and four months earlier than they were in previous years. I would ask the Minister to drop a hint, if it may be needed, to ask them to be as forbearing as they can in dealing with members of our profession if they are a bit behind time in their work which is due to no fault of their own.

I have nothing much to say on this Bill. I was not aware it was coming up tonight and have come without my brief. I wish, therefore, to speak for a very limited purpose. This is a Bill which is making a general provision in connection with finance. It is not in every Finance Bill that we have provisions relating to the Special Commissioners, now the Appeals Commissioners, and as their position is being dealt with I want to make a case to the Minister that it is time to extend the powers of the Appeals Commissioners who deal with death and estate duty problems.

I want to draw the Minister's attention to the fact that in recent months there has developed in the Estate Duty Office a degree of rigidity and harshness in dealing with the valuation of small, private family businesses. This is a harshness which is something new and something to be deplored. I want to draw the Minister's attention to the fact that there are no people who easily avail of the appeal tribunal from the Estate Duty Office unless they are income tax, surtax and corporation tax matters. The only appeal is to the courts, which is an expensive business and this is a situation which is exploited to the taxpayer's disadvantage as far as estate duty is concerned.

We have in recent months a system of dealing with the valuation of small private businesses as if they were public companies. You can have a twopence-halfpenny business in the provinces dealt with as if it was Jacobs or Bolands. As far as I can recall the Institute of Chartered Accountants, a body to which the Minister and I have the honour to belong, in their submission earlier this year adverted to this matter of an informal appeal in relation to death duties. As the Minister is now dealing with the powers of Appeals Commissioners and the position of Appeals Commissioners it seems that this would be an appropriate time to deal with this matter. We can consider this aspect more fully on the Committee Stage. We are indebted to Deputy Costello for his exposition here tonight of the position in relation to negligence and the interconnection between section 4 and section 5 of this Bill. Having said that, I want to say in fairness that I can see that the Minister is going a long way to meet the amendments in relation to the time limits which we on this side of the House tabled a few months ago.

Once again it is my pleasant duty, as it was in relation to the amendments brought in in regard to the health expenses, to acknowledge the Minister's action and to tell him that we are pleased to see him, to the extent that he is doing so, taking a leaf out of our book.

In connection with Part IV, it seems to me and I am not an expert on property development, that the Minister is restoring what we might term the status quo; that instead of the broad charging sections comprised in the 1965 Act, he is now approaching this problem of property development from the right standpoint. I have nothing further to say on the matter.

Mr. Haughey

May I begin by saying that the way of the reformer is hard? I have come in here today with a piece of legislation, the whole purpose of which is an easement of the situation of taxpayers of one sort or another. As thanks for the reforming efforts I have made, I have to listen to Deputy Costello complaining about old ladies frightened to death by the Revenue Commissioners. I found on previous occasions when one comes in here to attempt to improve some altogether draconian provision that has been there for a long time, one is not given any credit for the improvement of the original provision which one is trying to achieve. However, this attitude by Deputy Costello will not debar me from continuing to try to improve the legislation governing our taxation system.

I want to appreciate on the other side the gracious remarks of Deputy Byrne and perhaps to refer very briefly to the fact that he and I were members of the same profession at one time. However perhaps I shall say for the benefit of the Fine Gael candidate in the Cork by-election, that I am not a member of any firm of accountants and have not been for some time.

This is, of course, a measure which can be more properly and adequately discussed on Committee Stage. I want to assure Deputies opposite that I am certainly prepared to take plenty of time on this piece of legislation. This is a complex and difficult area and the provisions which we have before us are the results of long and assiduous consideration by myself and my advisers. They represent the best effort we can make at this stage to come to a solution.

As I indicated in my opening remarks, we have been, and are prepared to continue, discussing these provisions with all the interests concerned and listening to every point of view which has been put forward, and listening seriously, and that applies to every Deputy. I want to assure Deputies that any amendment which is put down on any aspect of these particular provisions will receive very earnest and serious consideration. I am quite open to make any changes in these provisions which would help to make the situation more certain or definite to enable the taxpayers concerned to understand precisely how they stand.

Deputy Sweetman suggested that we were not quite keeping the balance between the Revenue Commissioners and the taxpayers so far as this question of going back to re-open assessments is concerned, but I submit that we are. The business of the year 1961-62 simply arises because of the practice to which I adverted on the other Finance Bill of not going back beyond six years. But, with regard to the other side of the question, we are providing in the case of the Revenue Commissioners that they cannot go back beyond ten years and in the case of the taxpayer, he cannot claim for more than six years. Whereas there can be fraud or neglect on the part of the taxpayer, the same cannot apply to the Revenue Commissioners. We cannot attribute any fraud or neglect to the Revenue Commissioners and that is perhaps why Deputy Sweetman suggested there might be some difficulty. In fact, we are making these provisions equally applicable, whether it is a taxpayer looking for a refund or the Revenue Commissioners seeking to raise additional assessments, subject only to the question of fraud or neglect.

Again, Deputy Costello is a lawyer and one has to excuse him for overstating cases. He very dishonestly quoted from section 4 (2) (c) while refraining from adverting at all to the proviso, which is fairly generous, and which states that:

Provided that a person shall be deemed not to have failed to do anything required to be done within a limited time if he did it within such further time, if any, as the Revenue Commissioners or officer concerned may have allowed; and where a person had a reasonable excuse for not doing anything required to be done, he shall be deemed not to have failed to do it if he did it without unreasonable delay after the excuse had ceased.

If any Deputy wants to suggest any further modifications of these provisions that seem to be reasonable, I am perfectly prepared to consider them. Deputies will recall that I argued here very strongly against there being any necessity for a statutory provision of this sort but I think it was Deputy Booth who finally tipped the scale by coming in here and supporting the case which had been made by some Opposition Deputies and caused me to wonder whether I should perhaps re-examine my own thoughts on this matter. Having done so and having discussed it, as I promised, with the Institute of Chartered Accountants and others, I brought in provisions which seem to me to do exactly what the Opposition Deputies and Deputy Booth sought on that occasion. I argued that the practice was there and that the practice was sufficient and the main case put forward by the Opposition was that a practice was not good enough—that we should give statutory effect to it. That is what I am doing here now.

One point made by Deputy Costello was about the provision that people will have to bring to the notice of the Revenue Commissioners the fact that they are chargeable to tax. That is an eminently reasonable, sensible provision because I do not think anybody pays taxes with joy. Certainly the thing that annoys people most is the suspicion that while they are paying their taxes, others are getting away with it. A great deal of pain would be taken out of tax-gathering if the person knew every other taxpayer was paying his full share.

Deputy Costello spoke about workmen earning £20 a week. Surely any such workmen are paying their full stint under PAYE and surely such people want an assurance that every other person earning £20 a week is also paying his share? It is eminently reasonable, therefore, that every taxpayer should do this, not only in the interests of the Revenue Commissioners, of the running of the State and of the raising of finances, but also in equity and to provide the assurance to taxpayers that they are not being asked to bear all the burden while others, equally able to pay, are getting away with it.

Deputy Sweetman asked about the loose-leaf edition of the Income Tax Act, 1967. I am afraid I can do no better than fall back, though fall back truthfully, on the old public administration cliché: "It is at present with the printers and every effort is being made to expedite its publication."

Mr. Sweetman

I suppose the same will be the excuse in regard to the death duty work.

Mr. Haughey

Deputy Sweetman should not press me for all-out economy in the public service and at the same time, ask me to allocate more staff for this and that and criticise me for delegating functions down to the lowest level of the Civil Service.

Mr. Sweetman

The production of these Acts in consolidated form would lead to a streamlining of the public service and accordingly to the necessity for fewer staff. What is the position about the death duty work?

Mr. Haughey

Every effort is being made.

Mr. Sweetman

In other words, there is not anybody here from the Estate Duty Office. Fair enough.

Mr. Haughey

I wish again to say the principle of this Bill is complicated and difficult. It is one in respect of which I invite every Deputy interested to bring his intelligence, his experience and his knowledge to bear and I assure every Deputy who does so that his contribution will receive very careful and serious consideration. I hope we shall be able in this way to evolve a piece of legislation which will achieve the purpose it sets out to achieve.

Mr. Sweetman

I should like to ask one question. The Minister said the new provisions will not operate until 6th April, 1968. While that is perhaps technically true, in one respect will they not operate for 1968-69 based on the factual position in 1967-68?

Mr. Haughey

Yes.

Mr. Sweetman

In fact, they will operate on what has occurred since 6th April last?

Mr. Haughey

In so far as they form the basis of assessments for the following year.

Mr. Sweetman

In other words, it is a previous year's assessment.

An Ceann Comhairle

Next stage?

Mr. Haughey

This day fortnight, and I hope Deputy Byrne will have his brief.

Mr. Sweetman

I will present the Minister with some amendments tomorrow.

Question put and agreed to.

Committee Stage ordered for Tuesday, 21st November, 1967.