I move: "That the Bill do now pass."
I would like to take this opportunity to observe that Dáil Éireann is now being asked to pass a taxation Bill of very great significance, perhaps the most significant taxation Bill the House has ever been asked to consider. It is one which, for the first time in our history, will be bringing capital gains within the taxation system. It will, as a consequence, confer a very significant improvement on the equity of the whole taxation system and will also prevent the kind of avoidance which results at present from persons investing in non-income producing assets which have very high expectations of capital gains and have in the past conferred very considerable capital gains which have been totally tax free.
As a consequence of the very substantial capital gains which have been made tax free, an immense sense of frustration and impatience has developed amongst the general body of taxpayers, the majority of whom are obliged to pay income tax because they receive their income in regular instalments. Such people have understandably found it difficult to understand why people of much greater means should have been able to make substantial profits without payment of tax at all. The capital gains tax cures that indefensible situation.
By passing capital gains taxation, by introducing capital gains tax in Ireland we are now in a position to join in the European Community as a society which has an equitable tax system. Until the Bill becomes law, when it is passed through Seanad Éireann, we alone among the nine member countries of the European Community will not have any capital gains tax. Surely it must be a matter for serious consideration on our part as to why we have failed to institute what many other countries found to be necessary as an essential part of their taxation system. Some of the capital gains taxes which exist in Europe have existed since the beginning of this century and it seems to me to have been a serious omission on our part that we did not move before now to introduce a system of capital gains taxation.
As we are introducing a capital gains taxation system we are also ensuring that Ireland will continue to have an advantage for investors over any other country on the Continent. The rate of capital gains tax which will be applied here, of 26 per cent, is less than the capital gains tax applicable in any of our European Economic Community neighbours. In several countries the rate of capital gains tax is equivalent to the income tax rate which, of course, can operate at rates much higher than the 26 per cent level applied here. The Government have chosen these rates and granted exemptions from thresholds and they are unique by comparison with our sister countries in the Community because of a desire to preserve here an edge of advantage for investors.
