Dáil Éireann debate -
Wednesday, 28 Jan 1976

Vol. 287 No. 4

Financial Resolutions. - Financial Resolution No. 10: Income Tax.

The Taoiseach

I move

(1) That, in relation to any payment made on or after the 1st day of March, 1976, section 17 of the Finance Act, 1970 (No. 14 of 1970), be amended—

(a) by the substitution in subsection (2) for "such payment" of—

"such payment, unless the sub-contractor produces to him a certificate, issued by the Revenue Commissioners under subsection (7), having affixed to it a seal which bears the words, `Authenticated by Inspector of Taxes' and is authenticated after the 28th day of January, 1976, by the signature of an inspector of taxes", and

(b) by the deletion in subsection (7) of the words from "on production thereof" to the end of the subsection and the substitution therefor of "if it is produced by him to a principal and has affixed to it a seal that complies with subsection (2), entitle him to receive without deduction of tax any payment which is made to him by the principal".

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

Mr. Colley

I take it that all that is involved here is as outlined by the Minister today, that is, the recall of the certificates and their authentication?

The Taoiseach

That is right.

Mr. Colley

I have received complaints, and I think many other Deputies have, in regard to the operation of this system. I am well aware that one can receive complaints in regard to this which are not well founded, but it does seem to me that there has recently been a slowing up in regard to the treatment of certificates which has operated to the detriment of genuine sub-contractors. What is being authorised under this resolution could lead administratively to further delay and grave not just inconvenience but loss to sub-contractors. I would ask the Taoiseach to try to ensure that this does not happen.

The Taoiseach

I think the scheme has been abused, and that has inevitably meant a slowing down of its operation. Some investigations are proceeding, but I will convey the Deputy's views to the Revenue Commissioners.

Mr. Lalor

I would like to add to what Deputy Colley has said. My experience as a member of a local authority is that the small contractor who builds isolated cottages and small local authority houses is badly caught from this point of view in that the legitimate contractor Deputy Colley spoke about cannot get an allowance certificate. He has to go through a whole lot of regimentation before he can and it is holding up local authority housing schemes.

The Taoiseach

I am informed that they had to withdraw 3,000 certificates because they were not getting the correct information.

Mr. Lalor

Withdraw 3,000 certificates to get 100 people.

Mr. Haughey

If they are to be withdrawn for authorisation could the Taoiseach clarify who exactly would be entitled to these certificates after this?

The Taoiseach

Existing holders of sub-contractor certificates.

Mr. Haughey

I thought the intention was to withdraw all existing certificates.

The Taoiseach

They are being recalled for authentication.

Mr. Haughey

Why do we need a financial resolution if it is only a matter of withdrawing them?

The Taoiseach

It is to eliminate forged certificates. Apparently it is necessary to have a resolution to recall them. After 1st March the tax will be deducted unless a person has an authorised certificate.

Mr. Haughey

If the certificate is cancelled it may give rise to the raising of taxation.

The Taoiseach

As and from 1st March principal contractors will be required to deduct tax at 35 per cent from payment to a sub-contractor who does not produce a duly authenticated certificate.

Question put and agreed to.