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Dáil Éireann debate -
Wednesday, 15 Jan 1975

Vol. 277 No. 2

Financial Resolutions. - Financial Resolution No. 6: Excise—Bets.

I move:

(1) That the duty on bets imposed by section 24 of the Finance Act, 1926 (No. 35 of 1926), shall (subject and without prejudice to the provisions of section 20 of the Finance Act, 1931 (No. 31 of 1931) be charged, levied and paid on bets entered into on or after the 20th day of January, 1975, at the rate of 20 per cent of the amount of the bet in lieu of the rate of 15 per cent mentioned in section 40 of the Value-Added Tax Act, 1972 (No. 22 of 1972).

(2) It is hereby declared that it is expendient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

The effect of the resolution is to increase the rate of betting duty from 15 per cent chargeable under section 40 of the Value-Added Tax Act, 1972, to 20 per cent with effect from 20th January next. As the majority of bookmakers pay duty on the basis of weekly returns the increased rate is being made effective from the first Monday after the budget. It is estimated, as was stated in the budget speech, that the increase in the yield of betting duty will amount to £1.3 million in a full year and approximately the same figure this year.

For the information of the House the net receipts from betting duty during the last five years was as follows: 1970, £1,936,000; 1971, £2,003,000; 1972, £2,365,000 and 1973, £3,883,000. The provisional estimate for last year is £4,763,000.

I should like to ask the Taoiseach, and the Minister for Finance, if they realise the people they are hitting by this increase? I appreciate that many people would not have sympathy for the punter or the bookmaker but it is not the bookmaker who is being hit in this instance. As Deputy Coughlan realises it is definitely the punter who places a small bet who will be hit.

That is not so.

We all know that betting or an interest in horse racing or dog racing has become part of our way of life. An Irishman, by nature, is a sporting individual and likes to have his little flutter. Thousands of people have a flutter on the SP. The majority of those who bet at offices are the lower paid workers and these people will be caught by this taxation. Quite a number of these, even though they can ill afford a bet, are old age pensioners. It is part of their interest in life.

The same applies to on-course betting where the punter who wagers a small bet will be hit. A person who wagers a £1 or 50p bet will have to pay tax on his return on the course whereas at office level a punter will pay the extra taxation when he places his bet. In fairness, and I am not castigating the bookmaker when I make this statement——

We are a noble profession.

——the punter who wins, occasionally, thousands of times has an arrangement whereby he is not always caught for the taxation. This is true and I know it to be so. The punter who wages a small bet in an office or goes to Deputy Coughlan at a racetrack——

The Deputy was one of the best customers without disclosing the identity or the enormity of the transaction.

I admit I like a flutter.

I dislike interrupting the Deputy but I must point out that Deputies should avail of this opportunity to elicit information on the resolution rather than to make speeches. Speeches, or matter of detail, should be left for the General Resolution.

I should like to ask the Minister if he realises that the small wage earner, the man who can only afford a small bet, is the person who will be hit by this? The punters who place big bets will not be caught for this and it is wrong that the small wage earner should be victimised in this way in his enjoyment. I should like to ask the Taoiseach, who is interested in the racing world and who attends race metings, if he realises what is being done here? The Government are inflicting a further hardship on the small wage earner.

The Deputy is a bit off-beam because what is happening in this issue is the difference between a tax and a levy. Half of the 5 per cent being put on on course betting goes by way of levy to increase the stakes. The Deputy is a horse owner. The Deputy will get some of this by way of increased stakes.

I am not a horse owner.

The Deputy was and, with the help of God, he will be again. That goes towards improving the industry and making it competitive with other European countries by way of increased stakes.

With regard to what Deputy Barrett said about the thousand pound man, that he does not pay tax, any professional man in my business who is found out in the evasion of tax automatically loses his permit for two years. Not alone that, but he loses his right to operate a stand at any racecourse.

That is not true.

That is true. Do not tell me. I am 40 years in the business. Deputy Molloy goes to Galway races once a year. Deputy Molloy should confine himself to the one-armed bandits in Salthill where he is directly concerned.

(Interruptions.)

Order, please, Deputy Power.

I would prefer to have an assurance from the Taoiseach rather than Deputy Coughlan in regard to the amount of money that will accrue to the Exchequer from these new proposals that will go directly to the Racing Board and to increased stakes. Am I to take it— Deputy Coughlan mentioned 2½ per cent out of the 5 per cent on on-course betting—that roughly half of this £1.3 million to be raised will go to an industry in a bad way and which showed definite signs of having been in a very bad way during the past year? Would the Taoiseach agree that half of that £1.3 million will go directly to the Racing Board?

There seems to be a bit of confusion here. This duty is on off-course bets. While I fully appreciate what Deputy Barrett has said, the small man will pay the appropriate percentage only. If he bets small, his percentage will be increased from 15 per cent to 20 per cent. If he bets big it will still be 15 per cent to 20 per cent. Therefore, it depends on the size of the bet. So far as on-course bets are concerned, those are not covered here. There has to be a special amendment of the Racing Board and Racecourses Act and that will be made later in the year. All of that revenue goes to the Racing Board and it is within the discretion of the Racing Board as to how much of the increase goes on stakes. Up to the moment the maximum on-course levy has been 5 per cent. This will enable the Racing Board to avail of the increase to 10 per cent and to increase the stakes accordingly, but that is not covered in this resolution.

The Minister said in his speech it will make it possible for the Racing Board to increase their contribution to stakes; that is, when the 1945 Act is amended. Are they not compelled to give a percentage of it to stakes? Is it at their own discretion?

It is at their discretion but they have a fairly standard arrangement. I think they increase them periodically. I have not the actual terms here but none of it comes to the Exchequer; it all goes to the Racing Board either for stakes, improvement of courses——

It applies to dogs as well as horses?

Bord na gCon operate under a different Act.

Bord na gCon do not come under the 1945 Act.

No, they cannot do the same thing with it. They operate under a different Act.

Is on-course betting on the dog tracks affected too?

No, Bord na gCon are not affected by this.

Did the Taoiseach say that all of the money collected can, at the discretion of the Racing Board, go to increased stakes?

I would not say all of it goes in that direction. There are other commitments. I think we are a bit out of order at the moment because we will have a chance of discussing this later when the amendment is before the House. But all of the money raised is available to the Racing Board for the benefit of racing and bloodstock generally. None of it goes to the Exchequer. But it is not this resolution.

The resolution before us—to which we are asked to agree or disagree, as the case may be—is solely a tax-raising one? The moneys about which we are now talking have nothing whatsoever to do with the improvement of racing?

Does the increase in on-course betting not come into effect until the Act is amended?

That is right.

But there will be an increase. Will it be 15 per cent?

From five per cent to ten per cent.

Five per cent to ten per cent on on-course betting.

This deals with off-course betting.

Question put and agreed to.
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