There is nobody more interested in the CPI than the ladies.
Wealth Tax Bill, 1975: Report Stage (Resumed).
Debate resumed on amendment No. 23:
In page 17, between lines 7 and 8, but in section 13, to insert the following:—
"(2) Each of the sums mentioned in paragraphs (a), (b) and (c) and in the proviso to subsection (1) shall be appropriately increased on the 5th day of April, 1976 and on every subsequent valuation date in accordance with the increase, if any, in the Consumer Price Index during the period of one year commencing on the next preceding valuation date and such increased sums, if any, shall be deemed to be inserted in place of the corresponding sums in subsection (1) on the appropriate valuation date".
—(Deputy Colley).
I am sorry if the Deputy was distracted by my attitude.
The Minister's presence is always stimulating. I will concede that. Before we adjourned the Minister let the cat out of the bag when he spoke about producing the same revenue. I wonder what revenue the Minister expects to get out of this Bill. Certainly, as the Minister said, there are such broad current exemptions that the number in the ordinary employed category who will be seriously caught by the Bill may not be large. Therefore, I am justified in drawing the conclusion that from that category there will be very little accruing to the Revenue in respect of the taxation imposed by this Bill. On the other hand, there is the undefined area where taxation captures significant sums. Again, in the absence of specific statements from the Minister it is impossible to estimate what we have in that.
However, I repeat what I said before, that the Minister's answer to the case put by Deputy Colley is insufficient on the grounds of incompleteness, that the suggestion that the thresholds would have to be modified by the consideration that certain valuations are to stand for three years is valid, because the case based on the three-year valuation is subject to very serious limitation or qualification. It is subject to limitation in that it does not apply to stocks outside a number of areas, although it will apply to the valuation of certain shares. It will not apply, I would imagine, to the market values of shares, varying from time to time on the Stock Exchange. It will apply to the valuation of property. It may apply to specific valuation made by the Revenue Commissioners or accepted by the Revenue Commissioners in the case of places where running market values are not accepted or determined, but if there is a changing market value I raise specifically the question: are shares to be valued for three years on where the shares stood on 5th April, 1975? Is that to stand for three years? It is not. Are stocks to stand on the valuation? If I am making a mistake please correct me because, as I have said, the intricacies of this legislation can lead one into pitfalls. I fell into one earlier for which I hope I have made amends but I, as I see it——
Quoted stocks will not stand at the base value——
Yes. Non-quoted stocks will. I call them shares.
——but the non-quoted stocks will.
The Minister means those quoted on the Stock Exchange. When I refer to them I call them shares, but when I refer to the valuation of the running stocks in the estimation of assets, that also is a factor that may change. Therefore, the Minister's answer is incomplete. The limitation of the provision for a valuation standing for three years to only part of the property subject to the tax, and the qualification to that limitation involved in certain discretionary powers that are vested in the Revenue Commissioners, even where it does apply, means that the Minister's argument is, to say the least of it, only partially valid. Therefore the thresholds, because of the inflationary effect, are an incomplete compensation at best for the inflation as affecting the threshold values. I think that is a fairly objective and reasonable presentation of the actual situation in response to the Minister's argument, which I take to be a perfectly serious argument.
On top of this we have a point that it is utterly unfair to everyone who is above the threshold, even if the Minister's argument were valid. I hope I have demonstrated that its validity is partial at the very best, that even if the Minister's argument were valid for those to whom the thresholds apply, for those to whom it does not apply it becomes a gross injustice because if one inflationary impact comes on them without any relief towards that at all, there is a further logical contradiction.
We talk about equality, we talk about treating all our citizens fairly. We talk about envy. We talk about all these things, but if we leave it as it is what have we got? We have got a situation where for those who are at or below the threshold, if the Minister's argument is right and I am accepting it in part, there is some compensation but there is no compensation at all for people above. That is unfair. I do not mind a proper scaling of things, but to provide, inadvertently I admit—I know this was not intended—for a situation where one class are to be so to speak privileged by the law in an oblique way and that others are to bear the full brunt, is to say the least of it objectionable from the point of view of the principles of equity.
Let us come to the thresholds themselves. So much for the argument that the Minister himself has advanced. Let us come to the threshold for a married family, which the Minister has pointed out as a dominant factor, although I still cannot see the logic, as I said before, of why two people have to be treated as one for property and taxation purposes. I would be repeating a whole argument which will be out of order and I do not wish to do it. Another thought has struck me since. I was just looking at the allowance of £90,000 for a widow or a widower, and here there is another injustice to women, on thresholds. On that basis a widow, if there was revaluation would be only valued in the Minister's reckoning at £10,000 whereas if she got the same threshold as the widower she would be valued at £50,000. If the Minister is thinking that way he might as well go to the logical conclusion—of course I reject the Minister's thinking altogether. The Minister is treating the woman as a kind of slave in the hands of the husband.
I do not follow either the arithmetic or the logic of the Deputy's argument.
The arithmetic is very simple. The difference between £90,000 and £100,000 is £10,000 and the difference between £90,000 and £140,000 is £50,000. There is the arithmetic. The logic escapes me because it is the Minister's logic.
Supposing the wife dies first, the same applies to the widower.
All right, maybe I somewhat facetiously went off on a tangent. But it is another example of the Minister's complete lack of logic. However, coming back to this amendment from which I had strayed and coming away from the Minister's argument, to which I think I have given a valid answer, let us look at the absolute values of the thresholds. I will take £100,000. It is a round figure. It is the one the Minister has been mesmerised on in connection with the family. We talked about that on his earlier amendment and I am afraid I digressed on that a minute ago. Taking that figure, at the way costs and inflation are going, property of the executive employed class, both in the public sector and the private sector, it will not be long before these thresholds are reached. They could be reached within three years.
There have been substantial changes in property values between the beginning of this decade and 1974. There will probably be no review of this legislation in the next three years. It is conceivable that significant changes could occur. We are asking that this disequilibrium in values at the moment be taken into account.
Deputy Colley had to be specific by putting in a phrase to which he is not necessarily tied. I expressed demur in the same sense in another amendment. The consumer price index is accepted. I understand the Minister's sensitivity to it. I understand the Government's embarrassment at having geared things to such an index. I understand the Taoiseach's anxiety and I understand—and to some extent I sympathise with—the Minister's argument on the sensitivity of such an index. But do not let us lose the spirit of this amendment in focusing narrowly on that measure; do not let us lose the spirit of what Deputy Colley is trying to achieve here by being diverted into specific consideration of consumer price index. What is fundamentally necessary is that there is some gearbox supplied by which adjustments can be made to the gradient of prices, to the gradient of money value, in such a way that this Bill will be a taxation on real surplus wealth, not artificial wealth. Normally, if this had been either five or three years ago one would have been very happy indeed to have taken the principle of the approach here.
There is one saver here I wish to point to, with approbation of what the Minister has done in this connection. In section 7 there is a relief which is independent of inflation. I regret the Minister did not accept amendment 17 which would have perfected the whole Bill. I would have given the qualification that the Seanad had put into the Capital Gains Tax Bill. This is mainly inflation-independent relief which has great merit.
With regard to thresholds, they are inflation-dependent. It would be a merit in the Bill if the Minister could see his way to provide a provision which would at least mitigate that dependency. The Minister has referred to precedents. He has invoked past codes. Amendment of tax legislation in the direction of relief is something that comes very slowly and meets great resistance before it is produced. It is seldom that tax reliefs are given. It is only in exceptional circumstances that a Government are in a strong enough position to do it. All the natural forces are pushing in the other direction, even the administrative forces. It is very seldom a Government can do that. Where the tax relief comes in mainly is in circumstances where inflation would justify the adjustment of taxes. It is in that negative sense that the greater part of the relief has come in the past. There has been expansion—expanding incomes and expanding standards —but there has not been a corresponding expansion in taxation. That is only possible in favourable circumstances. That is the normal way that it occurs. It is unwise to think in terms of adjustments later. It tends to be too little and too late.
We have been reminded by the Minister throughout this debate that death duties and similar measures remained with us for a long time, and he laid the blame on us because we were in Government at the time. Those were the forces which were at work. When we are dealing with the thresholds, I think that as is automatically done in section 7, some way should be found to mitigate the absolute dependence of these thresholds on inflation. How to do it is a matter for debate. In the last analysis, if the principle is accepted and the will is there, the Minister and his advisers will be the most competent and the best people to effect the intention. The consumer price index might conceivably not be the best measure. Do not let us confuse the issue by hinging on the thing and trying to knock this amendment merely because it refers to the CPI.
Let us look a little deeper and see what the spirit of the amendment is. The spirit of the amendment is to introduce some kind of gearbox, to find some mechanism within this Bill, a gearbox that will enable us to adjust to the gradients of money values, where we can get into the right gear for a steep inflationary rise, the right gear for a flattening-out situation. It is necessary also to have a braking mechanism—although the whole history of economic development points the other way—should the gradient sharply decline. Indeed when the CPI was introduced as the measure for the increase in the public service and as a measure for adjusting incomes it was in the early days visualised that if there was a gearing down, if the CPI fell, there would be a corresponding fall in the income. That was clearly visualised at the time of the first adoption of this notion. That has not worked out. It will never fall sufficiently in that sense. The movement has been up.
I am sorry the Minister rejected amendment No. 17. Here is the other fundamental point: if the Minister cannot do it now, would he consider it for the Seanad and if he came back with an amendment from the Seanad——
It will not happen.
It cannot happen.
Is there any use appealing when one cannot compel? It may be put right some day.
It cannot come back from the Seanad. The Dáil will not be sitting.
We could be recalled.
The Dáil could be recalled.
The values at the valuation date, I take it, will be carried forward from the inflationary point of view until the next review of the thresholds. Is that correct?
Yes.
If the value of that property rises, the increase in it will not be taken into consideration until the three-year term. What happens if that property falls in value? Would that be taken into account as it can with some property?
The taxpayer must ask to have the agreed assessed valuation.
The Minister seemed to be advancing the argument that the thresholds in this Bill are generous, which they are, as a reason for not providing against inflation. I do not know how that seems to the Minister to make sense. There is, of course, no connection between the two. Rather what it suggests to me is that the Minister is saying in reality, that fixing the thresholds as they are fixed in this Bill means that in the first instance you are only affecting a small number of people and they are all wealthy and it does not really matter. Politically it is not going to have any great kick back. But, on the other hand, if you do not provide for adjustment against inflation, then you are going to get a whole lot more people in who can be induced at the moment to lend either passive support or to adopt a neutral stance in relation to it when they would not adopt such a stance if they realised they were going to be directly affected.
That is the practical effect of what the Minister is doing. He is refusing to build in a provision against inflation. Whether the consumer price index is the best measure of that in my view is an academic question in the absence of a proposal from the Minister to deal with inflation. There is no such proposal from the Minister. Therefore, the amendment, which would adjust the thresholds in line with movements in the consumer price index, is the best proposition we have got before the House because there is not any other, provided that one agrees with the principle that there ought to be adjustment in line with inflation. It is, of course, clear that the Minister does not agree with that proposition.
The reference to fixed values for three years is, of course, as Deputy de Valera pointed out, limited in so far as it does not apply to all property, limited in so far as the Revenue Commissioners are not precluded from reviewing or revising such an adjustment and particularly limited in so far as it does not cover the stock-in-trade of business as I have been indicating earlier. So that impact of inflation on business in so far as the wealth tax is concerned will continue each year as inflation continues in a way that at the moment is not at all clear to many people. It will be clear, of course, when it begins to bite on business and adds to overheads which are recovered either by increased prices or by reduction in the labour force to cut overheads in another area. That is where it will show and when it does it will be for two reasons. Firstly, that the Minister refused to accept the proposition that wealth tax should not apply to productive assets and the other that he refuses to accept the proposition that there ought to be adjustment for inflation in the thresholds. Because of the Minister's refusal in that regard the impact of the wealth tax can be and I believe will be quite serious.
If the Minister were to accept those two propositions, there would be relatively little difficulty with this whole Bill. He has refused them, misguidedly in my opinion, but the consequences of his misguided approach in this regard will not be obvious for some little time. When it becomes obvious we intend—and I am giving the Minister due notice now—to point out exactly who is responsible for these consequences. The person primarily responsible is the Minister for Finance but he is not the only one. The others who are almost as responsible are the other members of the Government. In addition, responsibility lies on the shoulders of every Deputy in the Fine Gael Party and the Labour Party who votes for the Bill and against these amendments. We intend, when these consequences become clear, to point out exactly where that responsibility lies.
Amendment put.
The Dáil divided: Tá, 67; Níl, 70.
Tá
- Allen, Lorcan.
- Andrews, David.
- Barrett, Sylvester.
- Blaney, Neil T.
- 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.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Vivion.
- Dowling, Joe.
- Fahey, Jackie.
- 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.
- Healy, Augustine A.
- Herbert, Michael.
- Hussey, Thomas.
- Kitt, Michael P.
- Lalor, Patrick J.
- 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.
- Noonan, Michael.
- O'Connor, Timothy.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Patrick.
- Smith, Patrick.
- Timmons, Eugene.
- 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.
- Costello, Declan.
- Coughlan, Stephen.
- Creed, Donal.
- 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.
- 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.
- Fitzpatrick, Tom (Cavan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Governey, Desmond.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Patrick.
- Hogan O'Higgins, Brigid.
- Jones, Denis F.
- 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.
I move amendment No. 24:
In page 17, lines 60 and 61 after "received by him," to insert "and, before he has been notified of any claim for tax by the Commissioners, disposed of by him to the person or persons beneficially entitled thereto".
This amendment relates to the proviso to subsection (2) of section 14. That proviso refers to persons who are not primarily accountable but secondarily accountable in respect of wealth tax. Those persons include a wide variety of people such as bankers, solicitors and estate agents or anybody who collects rents, for example, on behalf of an assessable person. The proviso concerned says "that none of those persons shall be liable for tax to an amount in excess of the market value of the property, or in excess of the income, as the case may be, vested in, collected or received by him or her to which he is beneficially entitled in possession." I should have said: "collected or received by him or to which he is beneficially entitled in possession". That is all right as far as it goes, but I am suggesting to the Minister it does not go far enough. We should add to that a provision to the effect that, if such a person, say an estate agent, has collected rents and paid them over he should not be liable in respect of wealth tax if he has paid over these rents in good faith. It is a different matter if he has been notified by the Revenue Commissioners of a claim or a possible claim for wealth tax. Then he is on notice. As the section stands, such a person, having paid over in good faith, can then become liable for wealth tax. I do not think this is a position that should arise. Therefore, I am proposing this amendment which reads:
To insert after "received by him""and, before he has been notified of any claim for tax by the Commissioners disposed of by him to the person or persons beneficially entitled thereto".
It seems to be reasonable that the liability of persons of this kind should be limited, not only as the proviso says, to such of the property or income as they receive but also to such of the property or income as is in their hands prior to their notification by the Revenue Commissioners of a claim. Anything over and above that is imposing a very unfair burden on such persons.
There is a precedent for what I am suggesting in section 37 of the Value-Added Tax Act of 1972 where, in cases similar to this, the proviso extends to such amount as the person has collected, say the estate agent or whoever, and has not paid over in good faith prior to receiving notification from the Revenue Commissioners. I would hope the Minister would agree that the principle involved in the amendment and incorporated in the Value-Added Tax Act of 1972 is a good and fair principle and he would, therefore, find it possible to accept this amendment.
I am unable to justify accepting this amendment. The section with which we are dealing is that which deals with accountable persons, that is, persons who are accountable in addition to the people who are primarily liable to payment of the tax. In other words, one might talk about people who are secondarily liable. There is one vital difference between those primarily liable and those secondarily liable. The liability of the person who is primarily liable is an unlimited liability. The liability of the person secondarily liable is limited to the property or income over which he has control. This limitation is contained in the proviso with which we are concerned.
Although it is not clear that it contains these objectives, I take it the purpose of the amendment is to limit the liability of those secondarily liable to property or income received after notification to them of a claim by the Revenue Commissioners and limited also to property or income disposed of by them to the person beneficially entitled. Clearly, the second element is unacceptable right away because it would be open to an accountable person such as a person who had, broadly speaking, control over property or income to transfer the property or income to a third party.
As for limiting liability to persons who have been notified of liability, this is not possible in a capital taxation if one is to ensure efficiency in the collection of tax. It may be feasible in taxes such as income tax and value-added tax where there are ample opportunities for cross checking by the Revenue Commissioners with employers, wholesalers, manufacturers, dividend warrants and other returns and the persons involved are continuing in business. In addition, there is no hardship or inconvenience in the provision in the Bill as all those who are accountable persons or secondarily liable are in a fiduciary and quasi-fiduciary relationship to the taxpayer who is primarily liable apart from those who may be beneficiaries or agents. It should not be necessary in such cases to inform the parties concerned of their liability to tax. Any person who accepts the office of trustee, personal representative, manager, guardian or agents assumes certain responsibilities. Those responsibilities, as Deputy Colley knows, extend far beyond wealth tax, income tax or any taxation at all. A person who accepts these roles accepts all the legal obligations attached to them.
Including an estate agent collecting rents?
In certain circumstances, yes. Before a person accepts any of these roles he ought, in his own interest and, with practice, does in his own interest, check what legal obligations go with them. We are not dealing with naive inexperienced people who are not acquainted with their responsibilities. The kind of situations we are dealing with are ones which are operated by people who are well-informed or are in a position to be well-advised as to their responsibilities.
Furthermore, let us consider other aspects. The property of the assessable person must be vested in such person on the valuation date or the management of the property or the collection of the income thereof must take place on the valuation date or within a year thereafter. The accountable person has a right of reimbursement both from the taxpayer, the person primarily liable, and from the property itself or from the property in question. There can be no question of hardship if the right to recovery is established. In fact, recovery is guaranteed by the Act and it can be exercised against both another person and against the property involved.
It is pertinent to recall that a similar liability existed under the death duty code and was discharged by many personal representatives under that code. I am not aware that that responsibility created any difficulties. I am sure Deputy Colley, as a legal practitioner, will accept it was very necessary that that liability should have attached to the personal representative under the death duty code.
But surely this is much wider in application.
I would not accept that it is. First of all, whether it covers a larger number of persons or not does not matter. What matters is the individual responsibility of the individual, accountable person. Whether he is one of many thousands of people or is alone makes no difference in relation to his own responsibility. He knows that if he accepts the particular role that it has duties and those duties must be fulfilled by him.
In the context of the over-all limitation of the liability of those persons who are secondarily liable and their right of reimbursement which are so clearly guaranteed in the Bill, I am unable to accept the amendment.
The arguments put by Deputy Colley in favour of this amendment seem to me to be valid and the arguments of the Minister do not convince me. In the first place, in most of these cases there would probably not be a liability. In addition to that, even in the case of solicitors and certainly in the case of banks or other agents, in very many cases they might not be able to know what the total value of their client's holding might be. The Minister says that this is a person who has a responsibility. If a person is employed in a semi-managerial capacity as an agent to collect rents on a commission on behalf of some individual is that person entitled to say to that individual: "I want to know what the total of your property is; are you liable for tax?" Certainly, in some cases the owner of the property is quite likely to turn on him and say: "What has that got to do with you? I am paying you so much for collecting this."
The Minister instances the case of death duties. Death duties is a case of once only—or was. It is something of which people will be conscious. The heirs, the beneficiaries and all solicitors engaged in the matter would be aware of the taxes that would be due. I would argue with the Minister that the person who is in the secondary position has not got that control other than a control over the money that is passing through. He has not necessarily got the knowledge. It seems to me that in circumstances like this, where the Commissioners would have the knowledge and the agent might not necessarily have the knowledge, it is not unreasonable for Deputy Colley to put forward the amendment that he should be notified of any claim for tax by the Commissioners. I think that that is a reasonable proposition that the Minister ought to consider.
First, in regard to the Minister's reference to the right of a person secondarily accountable to recover the money which he has to pay to the Revenue Commissioners either from the taxable person or from the property itself, the Minister knows as well as I do that the kind of person we are talking about here will only be gone after by the Revenue Commissioners if they cannot recover from the person primarily accountable. Therefore, to talk about this person having a right of recovery is all very well in theory but in practice the Minister knows that when this problem arises the man will not be able to recover the money.
He will recover it against the property even if the person——
Cannot the Revenue Commissioners recover it against the property?
Of course, they can.
It is only when they go into difficulties and they cannot recover it that they go after this man.
The property would be vested in the accountable person.
Like the estate agent who collected the rent and paid it over in good faith? Does the Minister really think that it is a reasonable proposition that an estate agent will collect his rent and pay it over in good faith with no reason, as Deputy Brugha said, to know that there is any question of liability for wealth tax, and having paid it over and the person to whom he has paid his tax having left the country then the Revenue Commissioners got after him and he is personally liable to the Revenue Commissioners for whatever the amount is that he has paid over in the way of rent.
He may not be entitled to know.
Exactly, and he has then, with the compliments of the Minister, the right to recover this from the fellow who has left the country and taken the property with him. I do not think that this is a reasonable proposition and I think that it is a reasonable proposition to say that such a person should be liable if he has been notified by the Revenue Commissioners of a claim. In that case he is warned and he should not part with the money until he is cleared by the Revenue Commissioners. But where he pays it over in good faith, without any indication of a claim, I think it is a gross injustice to make a person like that personally liable out of his own pocket to pay.
I am surprised that the Minister does not accept the reasonableness of this. If the Minister said that he wanted to confine the reliefs sought here to certain categories of persons, I would understand that because I agree that in the case, say, of a personal representative or a guardian, he is likely to have fairly detailed knowledge of what the estate is, although as Deputy Brugha pointed out, we are dealing with an annual tax here unlike death duties. The Minister did not make any such case. In a blanket way he says: no, this cannot and should not be done. I think that he is wrong and I think that if an estate agent of the kind I have mentioned finds himself saddled with a liability for hundreds or perhaps, thousands of pounds out of his own pocket without any real possibility of recovery, this is an injustice and that it will occur but the Minister is refusing to accept this amendment. That is a very unfortunate situation.
Amendment put and declared lost.
I move amendment No. 25:
In page 18, line 39, after "accountable person", to insert "other than the spouse or minor child of the assessable person concerned".
This amendment deals with what I referred to earlier as the notorious spy clause in this Bill. The Minister, under a great deal of pressure, introduced an amendment on Committee Stage which went part of the way to remove the worst features of this. But, as I pointed out on Committee Stage, it did not go far enough. I noticed that the Minister brought in no amendment to deal with the problem still left. That is why I put down this amendment myself. The effect of it is to provide that the spouse or minor child of an accountable person will not be, as the Bill proposes, subjected to the obligation to give information to the Revenue Commissioners about a spouse or parent under pain of a penalty of £1,000 and a possible fine of £50 a day where he or she fails to give the information.
To impose an obligation of this kind on the spouse to give such information in respect of his wife or, in the case of a woman, in respect of her husband or to impose such an obligation in the case of minor children in respect of their parents is objectionable and inquistorial and possibly unconstitutional. If a person were accused of a very serious crime, including murder, the wife of such a person, if it were a man, could not be compelled—in fact would not be allowed—to give evidence which would lead to that person's conviction. But we are providing here that not alone will they be obliged to do this but they will be subjected to a very heavy penalty and there is similar provision in the case of the minor child.
If the Minister wants to tell us that that is not the intention and that it will not be done, the answer is: accept the amendment and make sure it cannot be done. Because, of course, under the terms of the Bill, an accountable person in possession of information relevant to the taxable wealth of an assessable person "shall disclose to the Commissioners"et cetera. An accountable person by virtue of section 14, includes the spouse or the minor child of the accountable person. I think that this whole subsection should never have been introduced and that the thinking behind it is objectionable and that it was amended only under considerable pressure and that there is just as much reason why it should be amended in the way I am proposing now as there was for the amendment that the Minister introduced on Committee Stage.
Therefore, I am urging the Minister, whatever may be the intentions in this regard, to make it absolutely clear by acceptance of this amendment that we cannot, under this Bill, have a situation in which the spouse or minor child of an accountable person will be compellable, under pain of heavy penalty, to give information in regard to the property of the spouse or of the parent concerned.
I do not quite follow Deputy Colley. Perhaps I should preface my remarks by saying that the rules of criminal law do not apply to taxation law and they never have applied. If they did apply would it not be open to the Revenue Commissioners to issue an assessment form to a person. To issue an income tax assessment form the Revenue Commissioners must form the opinion without proof that the person has an income. Criminal law does not allow the law to presume a person guilty until such a fact is proved. The whole taxation system would collapse if the Revenue Commissioners could not assume certain things which may, in fact, throw an onus over on to the taxpayer to disprove the assumption of the Revenue Commissioners. But there have been a number of arguments throughout the capital taxation debate for several months which assumed that taxation law is operated on the same principles as the criminal law. It never has so operated nor could it have operated on the same basis because if we have to wait until proof is established, then tax avoidance would operate on a much larger scale than it does.
There are obligations on taxpayers to disclose their affairs. There is no obligation—except a moral obligation —on a criminal to disclose his guilt but it is not regarded as an offence if he does not. But there is a statutory obligation on a taxpayer who is liable to pay tax to disclose the information and failure to discharge that statutory obligation leaves the person liable payment of a fine. Let us start with that approach and be concerned with the obligation which taxpayers have to disclose their affairs in order that they may be properly assessed for their liability to tax. If that is done, surely it is not wrong to say that a spouse or a child who is an accountable person——
(Dublin Central): How does one put the obligation on a child two years of age?
Why not? If the person primarily liable transfers all his property to the child, does that mean that person can avoid responsibility?
Of course, he does not avoid responsibility by transferring property.
But would he be free from the obligation of disclosing the information merely because he passed it on to somebody else? The obligation which would lie on the spouse or child that Deputy Colley seeks to exempt is no more than the obligation on the person primarily liable and if the person decides to arrange his affairs in such a way as to impose responsibility on another, so be it; that is his choice. If other people accept the responsibility, that is their choice. I cannot see that it would be right to exempt them from an obligation as they have accepted the responsibility which went with acceptance of a role. There is no reason why they should be exempt from the responsibility any more than anybody else. I cannot see for a moment that they should be excluded from accountability.
Deputy Colley acknowledged in the previous amendment that the Revenue Commissioners would not proceed against the person unless they had reason to believe that the person was in a position to pay up. That is, of course, the truth, that they would not proceed against a wife or a minor child unless they were in a position to pay. For the life of me I simply cannot understand the reasoning behind the amendment. If such persons were called upon to pay the tax on the wealth of the husband, say, in the case of the spouse and the father in the case of the child, they would have a right of reimbursement against the person primarily liable.
This is not dealing with the payment of tax. This is dealing with the furnishing of information.
The purpose of having accountability and the purpose of collecting information is to ascertain liability to tax.
But the information does not relate only to the property vested in them. It relates to any information they ask.
Information relevant to the taxable wealth of an assessable person—yes. First, it has to be an accountable person, a mere spouse or minor child might not be an accountable person but it has to be an accountable person as defined by subsection (2) of section 14. I cannot see why a person who is an accountable person within the meaning of that subsection should avoid the obligation of furnishing information merely because of being a spouse or a minor child.
(Dublin Central): She could be an accountable person in her own right.
The information to be given is information relevant to the taxable wealth of an assessable person.
If that were confined to the person from whom the information was sought I would have no objection. What I am objecting to is the question of obliging them to give any information they have in relation to another person's property, quite apart from what they have.
Is the Minister prepared to say that an accountable person in this case is not——
The Chair would remind Deputies that we are on Report Stage and a Deputy is allowed to speak only once.
The mere fact that a person is an accountable person in respect of A does not make that person an accountable person in account of B, C, D and E.
(Dublin Central): The subsection does not say so.
To be an accountable person one must have a particular relationship with the assessable person. It is not a question of once an accountable person always an accountable person in respect of everybody.
We are getting on to the next amendment.
The two are dovetailed. I cannot understand the motivation behind this. I cannot accept that people can avoid responsibility simply because of a blood relationship with the person primarily liable.
Does the Minister think it reasonable that a wife or child of a taxpayer should be asked to furnish information in relation to that taxpayer's affairs quite apart from information relating to property vested in the child or the spouse?
An accountable person may be the person, trustee, guardian, committee, personal representative, agent or other person in whom any property comprising the taxable wealth of the individual at the relevant valuation date stands vested.
This amendment relates only to the spouse or minor child.
Of an assessable person. I cannot see that that person can be exempted from the responsibilities which lie in an accountable person merely because of a marriage or blood relationship.
I could not disagree more with the Minister. He is adopting the attitude that because there is a relationship the person has an obligation to disclose something with which he is not connected. The purpose behind Deputy Colley's amendment is to draw from the Minister an assurance that a wife or a child under subsection (6) of section 14 would not be obliged to provide information about a parent. The Minister can easily resolve this by stating whether in these circumstances a wife or a minor child is an accountable person, not in relation to anything that the wife or the minor child might possess. If the Minister is prepared to say an accountable person in that context is not accountable in relation to the father or the mother's property, then the problem is solved. Is the Minister saying that because a child is related to a person of because a woman is married to a man that therefore that person must provide information under this section?
I am not. The Bill does not say it.
This is the purpose of the amendment. All the Minister has to do is say it.
Would the Minister look at this matter again? It may require a person to furnish such information within his possession or power as they may require in writing for the ascertainment of liability to, or collection of, tax. There is no limitation on that.
The collection of tax from the accountable person——
The House appears to be getting back to Committee Stage. We are now on Report Stage.
May I draw the Minister's attention to one point? It is stated that: "An accountable person in possession of information shall disclose in relation to an assessable person...." It seems to be read in relation to "an assessable person". If the Minister can say that does not include what is implied in Deputy Colley's amendment that it is all right.
I wish to put this matter in very blunt terms. I should like to refer to the principles of the case which caused the Taoiseach to walk through the other lobby on one occasion. We have heard a lot of complaints about Iron Curtain countries getting spouses and children to spy on their parents. If the directly accountable person is a husband or a wife then the spouse and child of that person should not be required to give information in regard to them. There are circumstances in criminal law where compulsion exists but there are certain cases where it is protected. We have a point here coming very near to constitutional rights. I refer particularly to the grounds on which the Supreme Court made their decision in the contraception case.
It is possible to make all kinds of distinctions. It can be said that the spouse or the child has an interest in the property. We can develop all the niceties of the argument. If the person is not assessable, if the assessable person is a minor, all that is covered. On the basic principle of family integrity, and the principles of which the Minister relied in another context here tonight, we shall not legislate that information be given for official and taxation purposes that might be used to make a liar of the spouse. It might be used to bring a penalty on the spouse which is very near to bringing criminal liability.
I am putting this in crude terms because of the time factor. I want it placed on the record of the House. There is a little slip here that is going too far for administrative convenience, though I completely trust the judgment and the discretion and the sensitivity of the Revenue Commissioners in this. It is very easy to get lost in the technicalities of a matter like this. When I speak vehemently I hope the Minister will realise that it is not in an accusatory fashion that I do so. It is merely to emphasise what I am saying in the short time available to me. If the matter is looked at in that way, then some amendment of this nature is necessary.
As Deputy de Valera said, time is running out on us under the guillotine imposed by the Minister. In view of all we have heard from the Minister for Finance I should not at this stage be surprised but I am surprised that the Minister should attempt to justify the proposition that the spouse or minor child of a taxpayer should be subjected under pain of a fine of £1,000 to furnish information to the Revenue Commissioners in respect of the husband or father of the person concerned.
That only happens if there is taxable wealth and if the accountability exists. The Deputy should not try to suggest at this hour that the Bill is setting up a whole system of spying which compels people who are not in the special accountability position to furnish information.
We are not making that suggestion, we are making the principle——
Maybe the Minister has not read his Bill but if he will have a look at it, at subsection——
We will let the Supreme Court decide.
The Deputy accused me of talking nonsense the other day. With the greatest respect, now he is talking absolute arrant nonsense.
Test the matter in the Supreme Court.
The Minister and Deputy Esmonde are disturbed at this and they have every right to be disturbed. The answer to it is to accept the amendment——
We are disturbed at the fact that the Opposition——
The Deputy is in possession concluding on his amendment and he is the only Deputy entitled to speak at the moment.
Section 14 (6) states:
An accountable person in possession of information relevant to the taxable wealth of an assessable person shall disclose to the Commissioners or such officer as the Commissioners may appoint such information within his possession or power as they may require in writing for the ascertainment of liability to, or the collection of, tax and shall make such disclosure...
The information required is "such information within his possession or power as they may require in writing for the ascertainment of liability to, or the collection of, tax". It is not limited as the Minister was trying to suggest earlier to property which is vested in them, that is in the spouse or in the child. It is in no way limited. It is information relating to the ascertainment of liability to or collection of tax.
It is an accountable person.
An accountable person is defined under section 14 (2) and by reference back to section 4. It includes the wife and minor children of the assessable person.
Having taxable property.
In so far as such a person has property vested in him if the Revenue Commissioners seek information in relation to that property then there is no objection. That is quite clear. What this subsection is saying is that the wife or child is required to furnish information in relation to the father's affairs over and above their own property. That is the whole point at issue and I think the Minister understands it because we have made it as clear as possible and he is refusing to accept the amendment. Deputy Esmonde is trying to defend this proposition.
Is the Deputy saying a trustee is not an accountable person?
It is a deplorable proposition. I have indicated my view that it is of doubtful constitutional validity and so has Deputy de Valera. I want to tell the Minister that it is very likely if the Revenue Commissioners try to enforce this that it will end up in the courts. It should not end up in the courts because there is an amendment here which could be easily accepted, which would not interfere in any way with the efficient operation of the tax. It should not have been necessary, it should have been properly drafted. When the matter was brought to the Minister's attention there should have been an amendment from the Minister but there was not. I want to make it clear that as far as this side of the House is concerned we do not accept the proposition and we are totally opposed to it. We are not going to vote against it because if we did we could not even talk about the next amendment. I want to place it on record that as far as we are concerned we are totally opposed to it and if we had time we would vote against it.
Amendment put and declared lost.
I move amendment No. 26:
In page 18, line 40, to delete "the taxable wealth of an assessable person" and substitute "the property in respect of which he is accountable comprised in the taxable wealth of the assessable person concerned".
This also relates to this spy clause that started out as an effort by the Minister to make anybody liable to give information about anybody else.
The Deputy should be responsible.
The Deputy knows that is what it started out as. The Deputy knows the amendment that was brought in here to try to water it down.
The Deputy is talking nonsense.
We had a release to the news media from the Government saying in their graciousness that this open Government were not going to impose this obligation. They brought in an amendment which improved the situation but, as I indicated on the last amendment, it left the obligation on the spouse or minor children. It is doing more than that. It is leaving an obligation here on an accountable person not only for the person in respect of whom he is accountable but in respect of any assessable person. The amendment which I am moving seeks to ensure that the obligation on the accountable person will relate only to the property in respect of which he is accountable comprised in the taxable wealth of the assessable person concerned. It could be argued that this is merely a matter of semantics, but it is a great deal more than that and the significance of it is seen if one looks at section 15 (2) which is dealing with this situation. It says:
A person who is accountable for the payment of tax by virtue of section 14 (2) shall, if he is required in writing by the Commissioners to do so, deliver to the Commissioners, within such time, not being less than 30 days, as may be specified in the requirement, on a form provided by them a return of all the property in respect of which he is accountable comprised in the taxable wealth of the assessable person concerned...
The wording of my amendment was taken from section 15 (2). There was care taken in the drafting of that subsection to make it quite clear as to the extent of the obligation of the accountable person. We get to this obligation which arises out of how this was drafted originally and what was intended. We find that the obligation here is on the accountable person to furnish information relevant to the taxable wealth of an assessable person, not the assessable person concerned, not the assessable person in respect of whose wealth he is an accountable person, but just an assessable person. It is possible that the Minister could have argued that despite the fact that the subsection does not say it, this related solely to the assessable person concerned. He might have argued that. He would have been wrong in my view but he could have had some kind of tenable argument but for the wording of subsection (2) of section 15.
The Minister knows as well as I do that once a court has drawn to its attention the wording used in section 15 (2) to deal with a situation like that it must assume that when different wording was used in section 14 (6) there was a different intention. The different intention is clear enough. It is that in the case of section 15 (2) it is intended to confine the liability involved on an accountable person, the liability imposed on an accountable person, to a return in respect of the property in respect of which he is accountable, such property as is comprised in the taxable wealth of the assessable person concerned. There is no doubt, no room for ambiguity, in that regard at all. But when we look at section 14 (6) there is no such limitation. It simply is an accountable person in possession of information relevant to the taxable wealth of an assessable person shall disclose to the commissioners.
If section 15 (2) did not exist the Minister might have it open to him to argue that subsection (6) does not mean what it appears to mean but the existence of the wording in subsection (2) of section 15, I suggest makes it impossible to adopt that argument. One must assume, and I believe any court would assume, in the circumstances, that what is intended to be achieved in section 14 (6) is to make an accountable person liable to furnish information in respect of the taxable wealth of an assessable person—any assessable person. If that were not so intended, then the clear wording taken from section 15 would be incorporated.
I want to make it clear that, having regard to the genesis of this subsection, having regard to how it was originally drafted and the obligation it imposed in respect of anyone, then one has every right to be doubtful and suspicious about the implications of this subsection. We can recall that an accountable person is being made liable to furnish information in respect of any assessable person and that under section 1 an assessable person means an individual, a discretionary trust or a private non-trading company—it can cover virtually anyone—and an accountable person includes such people as banks, accountants, solicitors, estate agents collecting rent and many other categories of persons. They can all be accountable persons. Any one of them under this subsection, as it is drafted without this amendment, can be made liable to furnish information in respect of the taxable wealth of an assessable person—not the assessable person in respect of whom they are accountable. If that were so the wording of section 15 would be used. That is clearly not the intention. If it was the intention it is not achieved. Therefore, without the acceptance of this amendment, this spy clause, while not as bad as it was originally, will still be thoroughly unacceptable. As far as we on this side of the House are concerned, it is thoroughly unacceptable as it stands and, I believe, it will be thoroughly unacceptable to many people, including those who were so concerned at the original wording of this subsection and those who, as a result of their concern and their expression of it, found an amendment introduced which they thought cured it but, in fact, did not cure it.
It is interesting to note that Fianna Fáil reserve their great bursts of indignation for any of the measures in this Bill which are designed to make the tax enforceable. Having lost the debate and the vote on the issue of whether or not Ireland should have a wealth tax and being aware that the overwhelming majority of our people are in favour of a wealth tax because they see the justice of it, Fianna Fáil, frustrated in their efforts to prevent a wealth tax, have still a forlorn hope that the Wealth Tax Bill will be stillborn. They may be assured that the National Coalition gynaecologists will make sure that the Wealth Tax Bill will not be stillborn.
Has the Minister anything to say about the amendment?
(Dublin Central): He is afraid to talk about it.
The Minister, without interruption.
Deputy Colley misreads section 15 and ignores the fact that line 57, subsection (1), of that section contains the definite article and not the indefinite article before the words, "assessable person". It is the person who is primarily accountable for the payment of tax by virtue of section 14 (1) shall, within three months after every valuation date, deliver to the Commissioners on a form provided by them a return of all the property comprised in the taxable wealth of the assessable person—that is, the assessable person in respect of whom the person obliged to give the information is the accountable person. That is perfectly clear. Though Deputy Colley may, irresponsibly, get on his spy hunt, the words of the Act are what the courts will look at, what the Revenue Commissioners will look at and what the practitioners will look at and not any of the spy hunts of Deputy Colley and his friends. Now, let us look to subsection (2)——
On a point of order, may we find out from the Chair how long we will continue this discussion. I sat down deliberately to give the Minister an opportunity to deal with the specific point concerned in this but it would appear——
There is no time limit on speeches, as yet. The debate will conclude at 10.15 p.m.
I understood there was a time limit on Report Stage.
(Dublin Central): That is the way it was on the Capital Gains Tax Bill anyway.
Surely Deputy de Valera, having spent an hour this morning on one amendment, does not begrudge me a few minutes to deal with the points raised by Deputy Colley.
Certainly not ad rem like I was.
With due respect I am getting down to words.
The matter will be disposed of at 10.15 p.m.; there is no other stipulation restricting the debate up to that time.
(Dublin Central): On the Capital Gains Tax Bill there was a restriction. The Report Stage finished at 9.45 p.m.
Subsection (2) says:
A person who is accountable for the payment of tax by virtue of section 14 (2) shall, if he is required in writing by the Commissioners to do so, deliver to the Commissioners, on a form required by them a return of all the property in respect of which——
Again, look at the confining words.
——a return of all the property in respect of which he is accountable comprised in the taxable wealth of the assessable person concerned.
The assessable person concerned is the assessable person referred to in subsection (1). It can refer to nobody except the assessable person, one particular assessable person and not any assessable person such as Deputy Colley suggested. That is why I say his interpretation of it is wrong. I know he is intelligent enough not to read it that way and I, therefore, must suspect his motivation for making a different presentation of it. Perhaps he is tired at the end of the 120 odd hours we have spent on this debate, and I forgive him for it.
(Dublin Central): We would like about another week to finish those amendments.
I would be only too delighted to think that we had been able to get enough time to deal with them, but we have not been responsible on this side of the House for the length of speeches from the Opposition. The section, as amended in Committee, makes an accountable person in possession of information relevant to the taxable wealth of an assessable person liable to furnish such information to the Revenue Commissioners. Such information is information relevant to the taxable wealth of an assessable person. No more.
Who is an accountable person?
If the Deputy wishes to intervene in the debate the Chair will facilitate him. In the meantime the Minister is in possession and must be allowed to speak without interruption.
The purpose of the amendment now proposed by Deputy Colley, which is similar to the amendment tabled by him at Committee Stage, seeks to ensure that an accountable person is liable to furnish information in respect only of the taxable wealth of an assessable person in respect of whose tax he is an accountable person. That is the intention of the section as it appears in the Bill. It is not capable of any other honest interpretation. An accountable person, call him Mr. A, in possession of information relevant to the taxable wealth of Mr. B, is required to disclose such information as the Revenue Commissioners require for the ascertainment of liability to or for the collection of wealth tax. In the context of wealth tax the tax on that taxable wealth can be payable only by Mr. B or by his accountable person. It is impossible to visualise circumstances in which Mr. A could be asked to furnish information in respect of that wealth, in connection with the taxable wealth of any stranger, because the stranger would not own that property. The taxable wealth of an assessable person, and information relevant to that wealth, can be relevant only to the case of the assessable person who owns the wealth and in whose hands it is liable.
Furthermore, the information can only be sought for the purpose of ascertaining liability to or for the collection of tax. The question of liability to tax can arise only in connection with that assessable person and no other. I suggest, therefore, that the Deputy withdraw his amendment. Our views in relation to this specific amendment happen to coincide whatever about the interpretation Deputy Colley put on it, with which I vigorously disagree. The section as it now stands in the Bill achieves what Deputy Colley seeks to achieve, that and no more, and is not capable, with the greatest respect, of any other possible interpretation.
We are in a more arguable area than on the last amendment but there are questions arising here that go into a certain area. We have not time to make long debate and discussion out of this and it would get into some very fine parsing of law, particularly on this amendment. On the last amendment I drew attention to a fundamental aspect. I have a suggestion to make to the Minister now. Would he ask the President to refer this section, and the Bill as a whole, to the Supreme Court for a ruling on constitutionality? Is that not a reasonable suggestion to the Government?
(Dublin Central): The President will probably do it when he gets it anyway.
We mind our own business here.
That is not a matter for me to decide.
The Government can always make suggestions and take the initiative in a matter of this nature. If there is difficulty there is machinery there by which the opinion of the Supreme Court could be obtained. It would resolve whether we are right or the Minister is right. I can appreciate as a lawyer that interpretations can be fine things in an area of this nature. I make the positive suggestion to the Minister that it might be a wise thing to have such provisions ruled upon in advance, and it would be greatly to the convenience of the Revenue Commissioners to know where they stand. It would obviate the costs to either them or somebody else of legal proceedings; it would bring certainty to the law and it is certainly an area, particularly in view of the points I raised on the last amendment, which seems to be eminently suitable for reference. We have this constitutional procedure. We have not time to debate the whole matter in the House. Deputy Esmonde, a lawyer, is accusing people in a most unprofessional manner, shouting across the House "rubbish", and things like that instead of giving an argument.
It is rubbish.
The Deputy would not say that in court.
I have heard lawyers say worse and so has the Deputy.
I have and I have heard judges bring them to order. There is a constitutional way out of this. I hope it is a constructive suggestion to the Minister in regard to this and similar provisions in this taxation code. A number of factors come into this. There is always the factor of considerable risk, and there the State is at a great advantage but the unfortunate citizen at a disadvantage. There is considerable risk in taking a case but when a citizen takes a case and wins it is the taxpayer who pays. These are points to be carefully weighed and considered by this House in making legislation. In this sensitive area, having regard to the position of our Supreme Court in the Constitution and the fact that this is an area where such questions are likely to arise, the suggestion I made to the Minister is, I hope, a sober, considerate and sensible compromise on this debate.
It would be illogical for me in the short time available to attempt a further legal analysis. If Deputy Esmonde was serious and we were serious about it we would take up a lot of time in parsing words and in interpretation instead of calling one another names.
I have not called anybody any names.
I did not intend that, I apologise, but instead of argument shall I say we got what the lawyers call vulgar abuse.
I would quarrel with Deputy Esmonde about that.
We are now going very far to the left. We are self-accusatory as well as putting the Gestapo after our spouses.
I will not interfere with that.
We are now going very far to the left. However, in all sincerity, I am sorry if I have sinned that way too. I withdraw any personal imputation whatever. I did not intend any.
Accepted.
As the Minister said, we are all getting a little tired and irritated. I do not want to hold up the House, but would the Minister please consider my suggestion of referring this section and other provisions in the Bill, ab initio, with proper representation from the Government to the President? That could bring about a reference and a clearing up of this problem in advance.
(Dublin Central): I am not sorry for the Minister or Deputy Esmonde as regards being here at this late hour. I have a certain sympathy for civil servants and others who have been kept here so late in the session.
No sympathy for me?
(Dublin Central): I must confess I have not. If we had rational Deputies in the Government benches, including the Minister, we would not be debating this Bill on the last day. A sensible Government would have deferred this Bill until the autumn when we could study the implications of the Bill. By that time the Minister might have a different line of thought as regards wealth tax. Unfortunately, he failed to see the light after long days of deliberation in this House. At this late stage we are back to square one in regard to wealth tax as far as the Minister for Finance is concerned. He has failed completely to comprehend our views on how detrimental a Bill of this nature could be to the country at this time. I do not want to move off the amendment, but time is running out. From the first time I saw the Bill I was against it. My view has not changed.
We must get back to the amendment, Deputy.
(Dublin Central): We are trying at this late stage to do something with a very bad package. Deputy Colley has tabled an amendment to tighten up the Bill so that when the average person reads the Bill he will know who “an accountable person” is. That is what we are trying to do. Deputy Colley tried to do this in the previous amendment as regards the spouse and minor child. The Minister failed to comprehend what he was talking about. In this section he is trying to bring some sense of rational thinking so that the average person can, without having to go to the courts, understand it.
We all know that capital taxation Bills are complicated. I am sorry the Minister cannot see the wisdom in Deputy Colley's amendment. If there is one person in this House I should like to pay respect and gratitude to for the work he has done for democracy, both on the Capital Gains Tax Bill and this Wealth Tax Bill, it is Deputy Colley who researched for the majority of these amendments.
Can we get back to the amendment we are discussing? Amendment No. 26, please.
(Dublin Central): I was talking about how difficult these amendments are and the purpose of this amendment. I was pointing out the work Deputy Colley has put into these amendments to try to bring some sense of respectability to the Bill. The Minister has rejected amendments which would have improved the Bill to some extent. We are trying to ensure that there will be no ambiguity, good, bad or indifferent, when this Bill goes through the House; that there will be no dissention between families, as regards who is an “assessable person” and who should give information as regards an assessable person. We know what happened over the years as regards the break-up of families——
Deal with the amendment now.
(Dublin Central): This will all eventually come back in this section—who is an accountable person in a family?
Surely the Deputy does not couch human relations in money terms all the time?
(Dublin Central): There is no man who knows better than the Deputy that it is a relevant factor at certain stages in life. It applies to family circles, too. For Bills like this which are let go through the House I do not blame the draftsman: it is the Minister I blame. It has been brought to his attention that this section has a defect which could be improved considerably. Evidently the Minister is not prepared to do anything about it. I have lost track of the number of hours and days we have spent debating this Bill. Each of the amendments contains the same amount of common sense but it is obvious that the Minister has failed—I can forgive him now as he is probably tired, but I cannot forgive him for having rejected earlier amendments—to realise the realities and difficulties of the country today.
The Deputy is continuing to deal with the Bill in its entirety rather than the specific amendment before us.
(Dublin Central): It is regrettable that the Report Stage was not deemed passed and we could discuss the Bill as a whole. I agree that in the Capital Gains Tax Bill——
The Deputy had a right filibuster on section 2. He has now covered everything.
(Dublin Central): Every section of the Bill has something wrong with it and one could keep talking on it.
Be relevant.
(Dublin Central): I am relevant to the amendments Deputy Colley put down.
It is certainly relevant to Deputy Esmonde's interruption.
Everyone listened to the Minister's explanation and there has been no reference to the Minister's description of what the sections meant.
When Deputy Colley was out of the House I indicated that our views coincided.
What is all this about then?
Our views may coincide but it is not being done.
(Dublin Central): Subsection (6) refers to an accountable person in possession of information relevant to the taxable wealth of an assessable person. I am not a qualified legal man but if I were reading that I would take a different interpretation from Deputy Esmonde's. An assessable person could be anybody.
When the Deputy is in the net, would he come to me and I will see what I can do?
(Dublin Central): I could not afford it. What I am trying to ensure is that I will never find myself in that situation. I am trying to ensure here that the unfortunate innocent taxpayers are kept out of litigation, that they will be able to decide for themselves the proper interpretation of subsection (6).
You should be careful about people who get advice from them.
Back to amendment No. 26, please.
(Dublin Central): What Deputy Colley is trying to do is to simplify and make this subsection readable for the average taxpayer.
It is a well drafted Bill.
(Dublin Central): If it were a well drafted Bill we would not be talking. I have very little to say on this amendment——
The Deputy has another 20 minutes.
(Dublin Central): Other people have views on this also. I am not like the Government Deputies and I am not like Deputy Ryan, the Minister. I have no hesitation in reminding the Minister here and now that he deprived Deputy Colley of a final say on the Capital Gains Tax Bill.
We are straying very much from the amendment before us. I have told the Deputy so on a number of occasions. I would be very grateful if he would please relate his remarks to the amendment before us.
(Dublin Central): What we are discussing here is an “accountable person” in possession of information relevant to the taxable wealth of an assessable person. If I am an accountable person, the Revenue Commissioners could ask me to give information in regard to an assessable person. That is how I read the Bill and I am entitled to make my own interpretation. Deputy Colley's amendment is designed to tighten the whole section. It reads:
In page 18, line 39, after "accountable person", to insert "other than the spouse or minor child of the assessable person concerned".
I have nothing more to add except to repeat what I have said at the Second Reading of the Bill. There is nothing in the Bill. It certainly will not in any way improve the economic situation. I promise you that I am not going to range over the whole Bill.
The Second Stage of this Bill has been long since passed.
(Dublin Central): Thank God for that—I should not like to go through it again. As I said at the outset, this Bill is a disastrous one and should not have been brought in at this time of economic development in our country. It is one of the worst Bills that the Minister for Finance has brought in during his reign. I hope the Minister, no matter how long he is in office, will not bring in another Bill like this.
The Deputy will be glad to know that I gather he does not like the Bill.
I want to say now, as I said before, that this is a highly technical field. As I look around I do not see anybody but legal people. I spoke on this section before. People in the country think this section, though watered down is part of a spy Bill and that the protection in it deals with a person who could be named as a spy. Admittedly, the Minister watered it down and went to a great deal of trouble to disclose to the public that that part of the Bill gives reliefs. As a layman I do not think so. What I should like to know is who this "accountable person" would be. He may be a brother of the owner or a brother-in-law of the "assessable person." As far as I can see, under this Bill he has to return that information within a certain period of time and if he does not do that he is open to a fine of up to £1,000. That is what I am led to believe, as are a lot of other people.
Deputy Esmonde is looking at me as if I was being led astray. The Deputy knows that there are not too many people in the country who can be led astray on any subject. I spoke a lot on one of the sections on the Second Stage debate and later on the amendments, and especially section 15. I went into great detail on that. With all due respect to the Revenue, their powers are very far-reaching. They can sue an estate agent for income tax if the assessable person does not pay up or goes away. That is a fact, because I have seen it happen and I have evidence to show that. A lot of people, including estate agents, were not aware of that fact, but when they get a letter demanding that under this Bill they will soon realise it.
As I see it, the accountable person could be anybody. It could be a relation. As far as I can see, this Bill is going very far and it is going to come into every aspect of life a person is involved in. It can have a very damaging effect because it is the people who have money who set the country going in all projects. If this Bill goes through I can see nothing but money running out of the country, which it has been doing for the past 12 months. It has happened since the Bill was introduced.
The Deputy is getting off the amendment.
My apologies. I know that estate agents and other people can be written to now for information and they will have to give that information under this Bill when it becomes an Act. The Minister is going to ask relations of the people concerned to give information. Deputy Colley's amendment is a reasonable one. The person who is liable for the tax is the person who should have to give the information as well as his accountant or legal adviser. It should not be a case of a brother-in-law, a son, or a sister-in-law being required to give the information. It has been twisted around to make it look as if everything is all right. As the Minister knows, when the Bill was introduced, the section was very open. It alluded to "the person" and the Minister watered it down as a result of the debate. Now he has twisted it around again but the position remains the same. I do not like this accountable person being a spouse. In many cases the affairs of a husband or wife, son, sister-in-law whatever the case may be are not disclosed to each other. I think the Minister will agree with me on that.
The section as drafted exceeds Constitutional rights. I am not a lawyer but in my view I would have a reasonable case to state in court that I did not wish that a niece, nephew, aunt, mother or father, whatever the case may be, should be required to disclose information about me. That it what this section means. It is a poor day when that position is brought about.
A person has only 30 days in which to comply with the regulation. This would put the persons concerned in a very awkward position.
As I see the Bill and as I have seen it all the way, it is putting us on a road from which there is no return. Jericho is nothing to it. It is the road to hell, as I see it.
The walls have not collapsed.
The Minister has gone very near to that.
As this may be the last opportunity I have of doing so, may I say on my own behalf and on behalf of the members of this party how much we appreciate the effort that has been imposed on, and the manner in which the duties that have been carried out by, the staff of this House in relation to this Bill and by the Minister's advisers who have had to put up with a great deal of ráiméis, not all from the Minister.
I thank the Deputy and reciprocate in kind.
I say that in all sincerity. I know that that is out of order.
May I be out of order in joining in it?
No compliments, please. That would be best, lest other Members may hold a contrary point of view.
In regard to this amendment, first of all lest there be any misunderstanding about this, if what I am urging on the Minister is the correct interpretation of the subsection as it is at the moment, then the position is that, contrary to the Minister's views, as expressed when he was speaking on this amendment, there could be many people affected. Let us take a bank as an example. A bank can be an accountable person as the Minister well knows. It can be an accountable person, let us say, in respect of Mr. X. But a bank, of course, can also be in possession of a great deal of information in relation to Y and Z in respect of whom the bank is not an accountable person. I am taking the bank just as an example. There are solicitors and a number of other people, estate agents and so on, who can come into this category. Therefore, if the contention I am making is correct, the accountable person such as a bank could be made under pain of substantial penalty to disclose information in respect of the taxable wealth of quite a number of people in respect of whom, say, the bank is not accountable——
No. It is only in respect of the assessable person. The definite article.
No; "an". I am coming to that point.
"The" is what is in the section.
Subsection (6).
Subsection (6) of section 14 says——
an accountable person in possession of information relevant to the taxable wealth of an assessable person...
——not "the", "an" assessable person.
The wording of this amendment is, as I said earlier, taken from subsection (2) of section 15 which leaves no room whatever for ambiguity or doubt. The Minister referred to subsection (1) of section 15. He did not say that I could ascertain comment on the significance of the wording in subsection (2). But he did refer to the wording in subsection (1) and talked about the use of the definite article in subsection (1) of section 15, which refers to the taxable wealth of "the" assessable person. Why that should be more relevant to section 14 subsection (6) than subsection (2) of section 15 escapes me. But even if it is relevant, the important point to observe here is that in section 15 subsection (1) there is a reference to "the" assessable person. In section 6 which we are seeking to amend the reference is to "an" assessable person, so that if there is any significance in the reference in section 15 subsection (1) the significance is that it differs from the thing that we are trying to amend. The Minister is shaking his head. Does he disagree with that?
It means information relevant to the taxable wealth of the assessable person——
No——
It must be read: "the taxable wealth of the assessable person in respect of whom the person required to give the information is the accountable person". You would not put the definite article in that particular line and still be grammatically correct.
If the Minister wants to be both legally and grammatically correct, would be accept this amendment? He would be legally and grammatically correct if he did that.
No. I would not.
It is quite clear that the Minister does not want to be either legally or grammatically correct. I am not particularly concerned about his lack of concern for the grammatical form of the Bill but I am concerned about his complete disregard for the consequence of what is in this subsection.
It is quite clear now that it is no accident that this subsection is drafted as it is. It is clear that the Minister was obliged by force of public opinion to amend it. In amending it he has left a number of very doubtful constitutional provisions in it. We are concluding this debate on a note which is consonant with the attitude taken by the Minister throughout the debate on wealth tax. The attitude is one of "I could not care less for the rights of the citizens of this country."
I am sorry to interrupt the Deputy but as it is now 10.15 p.m. in accordance with the order of the Dáil of 9th July I am putting the question:
Question put: "That the Report Stage be hereby completed and that the Bill is hereby passed."
The Dáil divided: Tá, 69; Níl, 66.
Tá
- 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.
- Costello, Declan.
- Coughlan, Stephen.
- Creed, Donal.
- Crotty, Kieran.
- Cruise-O'Brien, Conor.
- Desmond, Barry.
- Desmond, Eileen.
- Dockrell, Henry P.
- Donegan, Patrick S.
- Donnellan, John.
- Dunne, Thomas.
- Enright, Thomas.
- Esmonde, John G.
- Staunton, Myles.
- Taylor, Frank.
- Thornley, David.
- Timmins, Godfrey.
- Finn, Martin.
- Fitzpatrick, Tom (Cavan).
- Flanagan, Oliver J.
- Gilhawley, 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, Gerald.
- 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.
- Toal, Brendan.
- Tully, James.
- White, James.
Níl
- 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.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Vivion.
- Dowling, Joe.
- Fahey, Jackie.
- 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.
- Healy, Augustine A.
- Herbert, Michael.
- Hussey, Thomas.
- Kitt, Michael P.
- Lalor, Patrick J.
- 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.
- Noonan, Micheal.
- O'Connor, Timothy.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Patrick.
- Smith, Patrick.
- Timmons, Eugene.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Tellers: Tá, Deputies Kelly and B. Desmond; Níl, Deputies Lalor and Browne.
Questions declared carried.
This Bill is certified a Money Bill in accordance with Article 22 of the Constitution.