Before business was interrupted Deputy Desmond challenged my remark that the Minister for Agriculture and Fisheries had made a statement after the 1.30 p.m. news to an interviewer. I have since verified that he repeated what he said on the 6 o'clock news. I wonder could we have a little more responsibility when people contradict facts as Deputy Desmond did then. He runs into the House and makes statements like that. I will leave it at that.
Wealth Tax Bill 1975: Report Stage (Resumed).
Debate resumed on amendment No. 5:
In page 4, lines 26 and 27, after "wheresoever situate" to insert "other than property in the State which is agricultural property or is used directly in the provision of employment in the State and stock and shares of a trading company trading in the State,"
—(Deputy Colley.)
On a point of information and in deference to Deputy Mrs. Desmond, may I point out that it is Deputy Barry Desmond who is being referred to.
Having had the opportunity to verify it, the position is this, and I paraphrase it. It will be a tedious process but I have it on tape here and I can put it on the record if necessary. I am paraphrasing when I say that, as a result of the transactions affecting the green £, there is a benefit generally to agriculture of, I think, £70 million or so, but the question arose about the food subsidies and in that connection the question arose as to whether £2½ million would, in some way, have to be found in the agricultural sector to meet the contingency.
This is a bit far removed from the amendment on Report Stage of the Wealth Tax Bill.
It is not because, first of all, Deputy Barry Desmond has put me in this position and I am entitled to reply to him. Secondly, we are asking the Minister for Finance in this amendment to exempt agricultural property. The Minister said there was no change in the situation. I have no intention of repeating what I said on another section. I certainly am entitled to adduce new evidence, evidence today that should make the Minister re-consider this point. The evidence is that food subsidies may be adversely affected.
The question was put to Deputy Clinton, the Minister for Agriculture and Fisheries, today as to whether the £2.5 million would be raised in the agricultural sector and, though he did not directly answer, he said that sector would have to bear the burden. If the Minister wants the whole lot, I can give it to him. I am trying to be absolutely and conservatively fair to the Minister when I say he said no decisions were made yet but it was only fair to assume that the sectors involved would have to contribute and that the farmers were the first section to feel the effect—I am coming very near quotation here—of the Government's determination to hold the CPI.
I agree with the Minister that we do not want a debate on that. This is a fact. Many people heard that on the news tonight and on the 1.30 news today on the radio as I did—I did not hear the 6.30 news as I was in the House here—and they can judge whether I am telling the story right. These answers were given by the Minister to the interviewer who mentioned the one figure I have mentioned. He said no decisions were made and went on to say that every section would have to bear it. The implications were plain. The president of the IFA said the farming community could not do it, that they had three bad years. On the news bulletin I heard Deputy Clinton corrected them by saying the farmers had one bad year, not three.
In all sobriety here is a new situation. There is another burden being imposed on the agricultural community. It is not too late yet, even if the Minister's arguments on Committee Stage were valid, even if Deputy Colley and myself who adumbrated what is said in this amendment are correct, even if this amendment is a repeat. The Minister went as near as he could with propriety to question whether this amendment was in order. The facts today in the current news justify putting down that part of the amendment which asks for the exemption of agricultural property.
I give the Minister credit for the many exemptions he has granted in this and other Bills. I expressed my sympathy with him before when he ruefully said: "I give so much and then I am pressed the whole way; perhaps, it would be better if I stood still and did nothing." I can understand the Minister's reaction. But in regard to agriculture, as disclosed by the State broadcasting agency, Radio Telefís Éireann, there is justification and substantial cause for advocacy in regard to the first part of Deputy Colley's amendment.
The second point is in regard to employment in the State. In the fertiliser industry we have a colossal unemployment problem. Do not let us get lost in apportioning blame for this. Let us take this as the unhappy fact. People who are employed are having to support the unemployed who would rather be working than to be so supported. Surely anything that is conductive to the provision of employment—Deputy Colley is only talking about property directly used in the provision of employment—remains as valid as when we made it on other Stages of this Bill and after hearing the news in another context I need not expand on that.
Next we come to the stocks and shares of a trading company trading in the State. I dealt with that already and my arguments are still valid. On that occasion I was willing, as a last resort, to think of the first two as being more directly involved. Deputy Colley pointed out later that I was probably mistaken in trying to go the road as far as I did with the Minister on the question of stocks and shares.
In supporting Deputy Colley's amendment let us get down to the point. Agriculture and employment today are deteriorating. There is more need for this amendment today than there was when we moved it on Committee Stage. It is in that sense I urge it on the Minister.
I am tempted to get after some of Deputy Esmonde's red herrings but that is a little far fetched when dealing with this amendment. Nobody has denied what took place in regard to death duties. The Minister's talk about social justice is a little beside the point of this amendment. Social justice and equality is all very well but what will this Bill do for the agricultural sector if the exemption is only partial? What does it do for employment when there is only provision for partial relief for productive assets? The Minister talked about the reliefs he introduced for productive assets but the situation is so critical that it demands a total one. I will be content with saying that because one can lose the wood for the trees in an amendment of this nature. Where agriculture and employment are concerned today's news would justify the bringing in of this amendment as an extraordinary and emergency measure in its own right. That is enough to make an amendment of this nature a compulsion rather than a desirability.
(Dublin Central): I should like to speak in support of this amendment. On amendment No. 4 we gave the Minister an opportunity he may not get again when we asked him to defer the implementation of this Bill for 12 months, or to make the date effective from 1976. This is an inopportune time to present a Bill of this nature to the House. Looking around we can see the chaotic state of industry and agriculture. The position of these is reflected in the employment exchanges today.
I could not believe my ears when I heard the Minister saying there was no better time to introduce a wealth tax than at this stage. How could any Minister in his sane senses make a statement like that in view of the present state of the economy? Ask any businessman or any farmer what is the state of his business today. This is reflected throughout our standard of living. One has only to look at our fertiliser factories today. Is it an opportune time to introduce a wealth tax with our factories closing down? I believe it is not. Evidently the Minister is so concerned about introducing this type of philosophy into this House, having made commitments to his colleagues in the Labour Party, with which many of his party disagree that he is now faced with the option of getting out of Government or getting through this penal taxation. This is why the Minister is caught with this type of taxation. It is obvious he has complete disregard for our present economic situation. He is more concerned with remaining in Government because, whether he likes it or not, if this Bill does not go through, his Ministers in the Labour Party will not support him. There are many members of the Fine Gael party who are completely against this Bill because they know the detrimental effect it is having on our economy.
I am not speaking here to protect the wealthy. Rather I am speaking about protection of our economy and promotion of economic expansion to ensure sufficient expansion in agriculture and industry where our workers can be employed and maintain a meaningful and high standard of living. Evidently, the Minister's views of a proper standard of living for our people is different from mine. My view is that one should encourage the utilisation of wealth to ensure it is used in productive assets. That is the object of Deputy Colley's amendment to exempt productive assets.
What I mean by productive assets are factories and farms giving useful employment. Can anyone criticise us on this side of the House for trying to exempt industries finding it very difficult today to keep their heads above water? We see them closing down week by week. What is the Minister doing to help them? In my opinion he is doing something very negative. He is introducing a wealth tax which has completely undermined the confidence of the entire country. Ask any section of our community today—I had the experience within the past fortnight not alone of speaking to business people but to farmers throughout the south—and they will give one the very same reply, that confidence generally is completely undermined. That is the achievement of a Coalition Government two and a half years in office.
On a point of order——
Acting Chairman
On a point of order, Deputy.
We are discussing amendment No. 5 of the Wealth Tax Bill 1975. With respect, I think that the speaker, no doubt overcome with emotion has travelled somewhat from the terms of the amendment.
Acting Chairman
The Chair feels that the amendment deals with employment in agriculture and industry and that the Deputy is in order.
(Dublin Central): I am confining myself to employment in productive assets which can apply to several types of industries. It can apply to farming, manufacturing, brewing, the hotel industry. What we are trying to do in our party is to instil some measure of confidence in our people again.
There are other countries in Europe much more advanced, with much more wealth, traditionally, throughout the years. Take, for example, France, Italy and Belgium. They were not foolish enough to introduce a wealth tax within the past few years. Take the United Kingdom: they have economic problems at present and they are our nearest neighbours. They issued a White Paper on the subject but did not go further. I did not hear Mr. Wilson, or any of his Government Ministers, say the introduction of a wealth tax would be a cure for their economic problems. The reason is that they have more commonsense. They know perfectly well that the introduction of a tax at this time, when all types of business are trying to get off their knees, would not constitute a solution to the problem. We know there is a recession in Europe; there is worldwide recession but we should be taking positive steps to rectify it. It is the duty of the Government to ensure that the steps they take will help to bring down inflation, generate more employment and reduce the cost of living generally. Had the Minister come into this House over the past six months and introduced positive economic policies——
I suppose the Deputy is still talking on the Bill.
(Dublin Central): I am talking on the Bill as it relates to productive assets.
The Deputy is not; the Deputy is talking about something else which he thinks I should have been doing.
(Dublin Central): We have been telling the Minister for the past six months what he should have been doing but he did not listen to us. Can anyone tell me how one can even float a loan, whether on an international basis, or with Irish banks, seeing the state of our economy at present? Let us go to the World Bank or any European countries that are prepared to lend money at this particular time. Does the Minister adopt a very good formula in going to any of these international institutions?
I have had occasion in the past to borrow from banks. The questions they pose are very relevant. The principles are the same. They want to see one's balance sheet, how one is doing, what are one's abilities to repay. The Minister may say that they have been in Government for two and a half years only. Since they took office there are an additional 42,000 people unemployed. Inflation has risen from approximately 8 per cent to 25 per cent. The cost of living has risen likewise. Factories have closed down. That is what he may say as regards an international loan. Any financier would be entitled to ask: What are you doing to remedy that situation? Are you taking corrective measures? That would be a fair question for any international financier to ask the Minister for Finance of a foreign country and he would say: "Yes I am taking certain measures. We are introducing a capital taxation package." Those are the measures he considers should be taken to try to curb inflation and boost the economy. No man in his sane senses would accept from a Minister of State that that action would cure economic ills.
In our amendment we ask the Minister to exempt productive assets held in the hands of individuals. That would be a small measure to try to restore a sadly lacking confidence in this country. There is no point in the Minister, or the Government, trying to put up a facade as regards the present state of our economy. In my opinion nobody in this House remembers during his lifetime our economy having been in such a state.
Our first priority is to maintain the standard of living and to keep people in employment. It should be the priority of any Government. We will be responsible and will co-operate with the Government if they come forward with reasonable proposals. However, no one on this side of the House could possibly support a measure such as this which will do exactly the opposite to what we want to do at this time. We want to encourage Irish people who are holding assets at this time, either at home or abroad, to put those assets back into productive industry and business here.
I believe measures at this time are necessary to try to repatriate some of this money which is probably invested in foreign securities. If there was a positive move from the Minister for Finance to try and encourage some of this back, of course the Government would get support from this side of the House. But it is very difficult to support the Minister in a Bill that is deliberately penalising Irish investors and giving preference to foreigners holding assets here. The Minister in this Bill, whether we like or not, is taxing the native Irishman in his assets and he is exempting the foreigners. That is the encouragement that we are getting from the Minister for Finance as regards helping Irish investors. I have said several times in this House that I for one object to being taxed when a foreigner is not taxed. I am sure this objection is shared by others.
That is the situation as we find it in this Bill, whether we like it or not, let it be in industry, hotels, private business or land. A foreigner with a foreign company owning shares in a company in this country is exempt from wealth tax. That is not the case with the Irish investor.
We must seriously consider how we are going to get the economy back on the rails. The most difficult thing to do at this time is to restore confidence. Once a person loses confidence it is very hard to restore it. Everyone gets a set-back in business at times but if he can see that there is some future he will respond, knowing that with a little additional effort he can restore the business back to its proper trading position again. But when you undermine confidence, when there is no light at the end of the tunnel, it is very hard to restore confidence.
I would ask the Minister to consider this seriously. If he does not, it is quite obvious that the unemployment which we have today will be far greater by next January. This is going to increase production costs. It is going to make exports more difficult and certainly it is going to——
The Deputy is wandering from the amendment before the House.
(Dublin Central): I am talking about productive assets to which Deputy Colley's amendment refers. I have already told the Minister what the consequences will be if he continues to tax productive assets. There will certainly be no hope of expanding our economic base, if this section in the Bill remains. The same will apply to all types of industries.
As a small gesture at this time, the Minister should now accept Deputy Colley's amendment and exempt productive assets from the wealth tax. I think by so doing he will at least be restoring some confidence. He will be encouraging Irish citizens who have foreign investments abroad to invest here. That is the philosophy on this side of the House that we believe can help the economy at this time. We do not believe in this negative approach because it will not work.
When one is operating from a weak basis, as we are operating now, where industry is concerned, it is encouragement that is essential. In this section the Minister is penalising the productive assets that are operating on a very narrow margin at the moment.
We are on the amendment.
(Dublin Central): It is in the Bill. I do not want to delay the House any longer on this amendment. There are many more amendments which are equally as important. I know it is practically impossible to make anything of a hopeless Bill such as this. There is not one good section in it. We have been here for the past few months trying to give it some semblance of respectability. If this amendment of Deputy Colley's is accepted it will be a step in the right direction.
I would not have spoken at all had I not heard of what Deputy Desmond said and Deputy de Valera's reply. This was in connection with the agricultural sector. If there was no reason for Deputy Colley's amendment as far as agriculture is concerned up to today, I think a case was made by the announcement by the Minister for Agriculture and Fisheries today that there will be direct taxation on the agricultural sector, owing to the fact that subsidies have to be increased because of the 5 per cent devaluation of the green £. It is in the interests of the economy and the country to do this but the fact is that somebody has said the farmer is going to benefit directly by it. As far as the agricultural sector is concerned that is further taxation being put on them. The headlines of The Irish Independent today state: “The farmer foots the bill.”
The Chair has no intention of interfering with the Deputy in regard to his speaking but the Chair is trying to keep the debate to the amendment.
The amendment refers to the agricultural sector. Am I right in that? Everybody else has dealt with industry. I just want to clarify that the Minister for Agriculture and Fisheries has not yet said what the agricultural sector will pay. Definitely the agricultural sector have to pay over £2 million and this is an extra taxation on the agricultural sector.
The need for the amendment is stronger today than it was at any time during the passage of this Bill. The irony is that it is supposed to benefit the farmers but many of the benefits of intervention have not come back to the farmers. The president of the IFA has said this, and I agree with him. We do not agree on many things but I certainly agree with him on this. We have no assurance whatsoever that this is going to come back directly to the farmer but if the farmer's direct grants are affected he must be considered.
Therefore, the amendment as far as the agricultural sector is concerned is more relevant today. I would ask the Minister to give serious consideration to it. What Deputy de Valera said was right. If Deputy Desmond said the farmer will not have to pay, he has only to take up The Irish Independent today or have regard to what I understand the Minister said on the 1.30 News to see that the agricultural sector will have to pay—that will be another burden on the agricultural sector.
I suppose Deputy Callanan appreciates that a farmer could have assets up to £250,000 and still not pay wealth tax. I do not think there are many such farmers in the Deputy's constituency.
I am talking about the extra burden on the agricultural community. The Minister was not here when we were debating it.
Deputy Colley to conclude.
There are a couple of points I want to say in reply on this amendment. Firstly, the Minister said that Dáil Éireann had accepted the principle of a wealth tax and that there was no point in our going back on that. I want to make it quite clear, lest there be any doubt about it, that Dáil Éireann did not approve the principle of a wealth tax a majority of Deputies in Dáil Éireann did.
That is——
Wait for it, I am not finished yet.
Is the Deputy denying democracy?
I want to make it as clear as I possibly can that this party do not accept the principle of a wealth tax in our circumstances and regard it as totally reprehensible and against the interests of our economy, lest there be any doubt about that. If a majority of Deputies in this House led by the Minister for Finance, and subject to the Whips of their party, voted for that principle, then on their heads be it. But I do not want Deputies on this side of the House who are totally opposed in principle, in our circumstances, to a wealth tax to be saddled directly or indirectly with the consequences of what the Deputies on the other side of the House are doing.
Secondly, the Minister asked me what items would be left to be subject to a wealth tax if productive assets were exempt. I told him that I did not know what proportions were involved and he said he was not interested in percentages, but in items. The clear message that came across was that as far as he is concerned there has to be a wealth tax, no matter what the consequences for the economy. If we exempt productive assets, as this amendment seems to do, the clear implication of what the Minister said was there would be very little left to put a wealth tax on. If that is so, and I suspect it might be so, the case for this amendment is all the stronger, because it means that the Minister is proposing to apply a wealth tax which will affect, in the main, indeed perhaps almost exclusively, productive assets. If that is so it gets us back, despite all the red herrings we have been having from the other side of the House, to the question I posed when I proposed this amendment and that is, is it right or is it wrong to impose a wealth tax on productive assets in our circumstances?
If one thinks it is wrong, one should vote for this amendment. If one thinks it is right, one should oppose it. It is as simple as that. No amount of red herrings or clouding the issue can alter the real issue. On this side of the House, we have no doubt whatever that in our general circumstances it would be wrong to impose a wealth tax on productive assets, but in our particular circumstances today, in 1975, to impose a wealth tax on productive assets is crazy. The craziness of that proposition is highlighted by the fact that while the Minister for Finance is imposing that wealth tax on productive assets with the one hand, he is with the other offering £12 a week to employers who employ people off the unemployment register. If anybody can reconcile those two things, he is a better man than I. I notice the Minister did not attempt to do it, nor did anybody on the other benches, because it is impossible.
This Government are galloping off in all directions. Gradually the centre is being pulled apart and the economy is sinking further and further. Instead of having some regard to the problems with which we are faced and, as Deputy Fitzpatrick said, trying to encourage the use of productive assets in any way we possibly can— which is the only hope for a growth in our economy and if we are to create jobs—the Minister is imposing a wealth tax on productive assets.
As far as this side of the House is concerned, that makes absolutely no sense, and I am being somewhat reserved in my choice of words when I say that. It makes absolutely no economic sense. We have consistently sought to draw to the attention of Deputies on the other side of the House the dangers of a wealth tax on productive assets in our circumstances. We have made a further effort in this amendment. So far we have not been successful.
As I started out when I was replying to this I want to finish and make it quite clear that if the Deputies opposite, under the Whips of their respective parties, troop into the lobby to support the imposition of a wealth tax on productive assets, then they are responsible, and nobody on this side of the House is responsible for the consequences, what it is going to do to jobs, the loss of jobs and a further downturn in our economy. We have had occasion in this House over the last two and a half years to point out to the Government what they were doing wrongly. Recently they had to admit that we were right. We are telling them again now that they are wrong to do what they are proposing to do in this Bill. Undoubtedly, in due course, some Government, possibly this Government, recognising the mistake, as they have recognised their previous mistakes, will accept what is in this amendment. But if they do not do it now they will have done an enormous amount of damage in the meantime. The consequences for that damage lie on the heads of Deputies who support the Minister in his effort to apply wealth tax to productive assets in our circumstances today.
Question put: "That the amendment be made."
The Dáil divided: Tá, 65; Níl 72.
Tá
- Allen, Lorcan.
- Andrews, David.
- Barrett, Sylvester.
- Brady, Philip A.
- Brennan, Joseph.
- Breslin, Cormac.
- Briscoe, Ben.
- Brosnan, Seán.
- Browne, Seán.
- Brugha, Ruairí.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Carter, Frank.
- Colley, George.
- Collins, Gerard.
- Connolly, Gerard.
- Crinion, Brendan.
- Cronin, Jerry.
- Crowley, Flor.
- Cunningham, Liam.
- Lemass, Noel T.
- Leonard, James.
- Loughnane, William.
- Lynch, Celia.
- Lynch, Jack.
- McEllistrim, Thomas.
- MacSharry, Ray.
- Meaney, Tom.
- Molloy, Robert.
- Moore, Seán.
- Murphy, Ciarán.
- Nolan, Thomas.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Vivion.
- Dowling, Joe.
- Farrell, Joseph.
- Faulkner, Pádraig.
- Fitzgerald, Gene.
- Fitzpatrick, Tom. (Dublin Central).
- Flanagan, Seán.
- French, Seán.
- Gallagher, Denis.
- Geoghegan-Quinn, Máire.
- Gibbons, Hugh.
- Gibbons, James.
- Gogan, Richard P.
- Haughey, Charles.
- Herbert, Michael.
- Hussey, Thomas.
- Kenneally, William.
- Kitt, Michael P.
- Lalor, Patrick J.
- Noonan, Michael.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Patrick.
- Smith, Patrick.
- Timmons, Eugene.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Níl.
- Barry, Peter.
- Barry, Richard.
- Begley, Michael.
- Belton, Luke.
- Belton, Paddy.
- Bermingham, Joseph.
- Bruton, John.
- Burke, Dick.
- Burke, Joan T.
- Burke, Liam.
- Byrne, Hugh.
- Clinton, Mark A.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Coogan, Fintan.
- Cooney, Patrick M.
- Corish, Brendan.
- Cosgrave, Liam.
- Costello, Declan.
- Coughlan, Stephen.
- Creed, Donal.
- Crotty, Kieran.
- Cruise-O'Brien, Conor.
- Desmond, Barry.
- Desmond, Eileen.
- Dockrell, Henry P.
- Dockrell, Maurice.
- Donegan, Patrick S.
- Donnellan, John.
- Dunne, Thomas.
- Enright, Thomas.
- Esmonde, John G.
- Finn, Martin.
- FitzGerald, Garret.
- Fitzpatrick, Tom. (Cavan).
- Flanagan, Oliver J.
- Gillhawley, Eugene.
- Governey, Desmond.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Patrick.
- Hogan O'Higgins, Brigid.
- Jones, Denis F.
- Kavanagh, Liam.
- Keating, Justin.
- Kelly, John.
- Kenny, Henry.
- Kyne, Thomas A.
- L'Estrange, Gerard.
- Lynch, Gerard.
- McDonald, Charles B.
- McLaughlin, Joseph.
- McMahon, Larry.
- Malone, Patrick.
- Murphy, Michael P.
- O'Brien, Fergus.
- O'Donnell, Tom.
- O'Leary, Michael.
- O'Sullivan, John L.
- Pattison, Seamus.
- Reynolds, Patrick J.
- Ryan, John J.
- Ryan, Richie.
- Spring, Dan.
- Staunton, Myles.
- Taylor, Frank.
- Thornley, David.
- Timmins, Godfrey.
- Toal, Brendan.
- Tully, James.
- White, James.
Tellers: Tá: Deputies Lalor and Browne; Níl: Deputies Kelly and B. Desmond.
Amendment declared lost.
It is proposed to discuss amendments Nos. 6 and 7 together.
I move amendment No. 6:
In page 5, line 21, to delete "ordinarily resident" and to substitute "domiciled".
The amendments relate to paragraph (ii) of subsection (5) of section 3, the second of the two paragraphs dealing with domicile. This paragraph is concerned mainly with the individual who is domiciled here from birth, from an Irish individual. It does not apply to the individual to whom Irish domicile is imputed by paragraph (i).
Could I interrupt the Minister? It is important that we should hear what the Minister is saying.
The amendments relate to paragraph (ii) of subsection (5) of section 3, that is the second of the two paragraphs dealing with domicile. The paragraph is concerned mainly with the individual who is domiciled here from birth, an Irish individual. It does not apply to the individual to whom Irish domicile is imputed by paragraph (i).
I think that (i) is a misprint in line 26. Should that be (I)?
It is (i).
It is (i) in the copy I have. In subsection (5) there is (a) (i) and (ii), (b) and there is nothing after (c). "Provided that this subparagraph shall not apply to an individual to whom subparagraph (i) applies" is in the copy of the Bill I have. I think it is a misprint for (I).
Is that the latest copy?
Take page 5 of the Bill, subsection (5), the proviso at the end of (a), you see (i). Is that a misprint for (I).
Yes, I think so.
The Minister said (i).
The Deputy's eyesight is better than mine. Domicile is largely a matter one's permanent abode somewhere, and to end one's days there. Therefore, if any person claimed that he intended to abandon his Irish domicile and to take up another, it would be very difficult, if not impossible, for the Revenue to rebut the claim, although it might be quite clear that he was merely leaving the country for a couple of years to take up an appointment elsewhere, for instance, or to pursue a course of study or for an extended holiday.
Absence, however long from a country does not necessarily involve a change of domicile, although it may itself be one of the factors which go to make up a change of domicile. It is clear that the Revenue Commissioners would find it very difficult to rebut fictitious claims of a change of domicile since intent is one of the vital elements that go to prove the change. In effect, the purpose of the paragraph was to state that a person shall be deemed to retain Irish domicile for three years subsequently to making such a statement of intent.
In the course of the Committee Stage debate on the paragraph, it was argued that the paragraph went somewhat further than the original intention, since it deemed "ordinarily resident" also. The Minister for Lands felt that there was merit in that argument and he promised to look into the matter further. Since then we have re-considered the matter and these amendments are the result. The paragraph will no longer impute "ordinarily resident". It will deem domicile only. Accordingly, such a person shall be deemed to be domiciled here, not domiciled and ordinarily resident, as originally drafted.
The effect of these changes may be summed up as follows: (1) such an individual shall be deemed to be domiciled here for the next three years; (2) there is no imputation of ordinarily resident which will, therefore, be a question of fact in each case; and (3) a person will be subject to wealth tax on global wealth only if being deemed to be domiciled, he is also ordinarily resident here. Deemed domiciled, which this paragraph imputes will not, therefore, of itself, catch the case of a genuine change of domicile because, in addition to "deemed domicile" a person must also be "ordinarily resident" here. That would be most unlikely in the case of a genuine change of domicile. Certainly no question of being ordinarily resident for three years after a genuine change of domicile should ever arise.
I think I follow generally what the Minister is at. In passing this subparagraph with the amendments we have the following situation.
Before the Deputy proceeds, might I mention the discussion we had about whether it was (i) or (I)? On further consideration it is (I). It is, in fact, the italic form of 1 and that is why it looks like I.
Would it not be as well to straighten it up on the next printing?
The difficulty is that, unfortunately, it is in a place where the paragraphs are labelled with the letters of the alphabet. I might be expected to be in sequences, A, B and C. It is merely a printing point and it is not worth delaying the House on.
When the Bill becomes an Act at that stage it will be changed from italics.
The thing that strikes me about this is that the phrase, "domiciled and ordinarily resident" is defined in paragraph (a) (1). The effect is that whatever the meaning of the word domiciled—the Minister is right, when he says that domicile includes a number of things including the animus manendi, the intent—and whatever the meaning within the ambits of this Bill of the words, “ordinarily resident”, paragraph (a) defines the phrase, “domiciled and ordinarily resident”, in a particular way. Presumably that definition is sufficient and complete for the purposes of this Bill.
That being granted, we come to the paragraph in respect of which the Minister is bringing in his amendment. The first line of that paragraph refers to an individual who was domiciled and ordinarily resident. The words, "ordinarily resident" are left in that line although they are deleted twice later in the section and in the first case substituted by the word, "domiciled". In that situation it appears that an individual who is domiciled and ordinarily resident within the definition of paragraph (a) on the valuation date shall, notwithstanding that he ceased to be domiciled be deemed to be domiciled, as the Minister put it. Is the word, "domiciled", not part of the phrase, "domiciled and ordinarily resident"? Is the word "domiciled", in the second case, to be interpreted in another way in the more general sense? In the first case the intention, the animus manendi, is excluded in the definition of the phrase, “domiciled and ordinarily resident”, in paragraph (a). That is based on a matter of ascertainable fact. If one excludes the words, “ordinarily resident”, and substitute them with the word, “domiciled”, is one not now bringing in a word which imports the animus manendi? If it does, is there any consequence? Perhaps the Minister will answer that as far as he is concerned it is immaterial but it is no harm to look at what we are doing with words in a case like this.
In lines 21 and 23 in substituting the word, "domiciled" for "ordinarily resident" the Minister is then using the word "domiciled" in one sense, whereas "domiciled and ordinarily resident" has another sense. Perhaps that is purely technical. It does not matter for the purposes of this section under what circumstances the person is absent. Even if they changed their domicile the difference between "ordinarily resident" and "domiciled" from that point of view does not seem to make a lot of difference. Deputy Colley is satisfied with the explanation the Minister gave. That being so, I do not wish to raise any difficulties but it is no harm to note that when one defines a phrase incorporating a word that has a different and well established meaning. I have Halsburg here if we wish to have an interesting legal evening which I am sure nobody wants. "Domicile" is a word about which much can be said and confusion created. Where we have a word like that incorporated in a phrase, or even by itself, and specifically designed for a purpose of a statute as is done in paragraph (a) then that meaning will prevail. The trouble is that in this case it is the phrase "domiciled and ordinarily resident" which is defined. That is used in line 19 and I understand the reason for it but the consequence is that in separating the words, "and ordinarily resident" from the word "domiciled" we restore domiciled to its ordinary meaning. The point may be of no practical importance for the purposes of this Bill. Deputy Colley is satisfied and I will leave it at that.
I want to intervene to say that, as Deputy de Valera indicated, the only question I had in mind in regard to these amendments was answered by what the Minister said in explanation. In view of what Deputy de Valera has said he has raised a slight doubt in my mind. I want to suggest to the Minister what I think is the position, or what it will be if these amendments are accepted, and perhaps, the Minister, when replying, could indicate whether I am interpreting the position correctly. Firstly, an individual must be or be deemed to be both domiciled and ordinarily resident to come within the terms of the Bill, broadly speaking. Secondly, paragraph (a) (1) deals with an individual who is not domiciled in the State on a valuation date. Paragraph 2 deals with a person who was domiciled in the State on a valuation date. That is the distinction between the two.
The first one is clear enough. The second one, if the amendments are accepted will, have the effect simply of deeming a person to be domiciled, not ordinarily resident, in the State if the conditions set out in the paragraph are fulfilled. If the person is so deemed to be domiciled in the State, then if it can be established as a matter of fact that he was ordinarily resident as well as domiciled, the appropriate section will apply. If it can be established that he was not ordinarily resident then it will not aply. That is my understanding of the position. I would be glad if the Minister would say whether it is correct.
At this stage, with the approval of the House the Minister has an announcement to make.
Debate adjourned.