We have not a great deal of time to discuss this Bill and there are some serious amendments to be dealt with, particularly in relation to the imposition of VAT at points of entry. I wish to refer to the concept of a resource tax on all holdings of £70 rateable valuation and over at a rate of £3.50 per £1 rateable valuation. I did not think that it was ever a good form of tax. Neither am I in favour of flat levies on income such as the youth employment levy. Taxation must be related to income.
While I am extremely critical of successive Governments from 1977 onwards, to his eternal credit Deputy Richie Ryan when Minister for Finance made a brave and tremendous effort to regularise farm taxation and there was considerable progress between 1974 and 1976. The Governments should have stuck with that form of tax for a number of years. I am opposed in principle to the refunding of taxation but nevertheless I will not press to a division my opposition to the section.
The Labour Party are opposed to the refunding of tax of this nature which was part of the annual budget. I was unhappy about it then, but so be it. The Deputies behind me who have spoken have equally stated their opposition to such refunding. The Labour Party were part of the Government which agreed to make the refund and I do not propose to go back on that. I am, however, entitled to make my opposition known. I hope that we can forget about agricultural levies and resource tax on the basis of rateable value because that as a criterion is wholly outdated and does not relate to actual farm income. I have always thought it inadequate as is the concept of youth employment levies, flat rate health services levies and bank levies. The income and profits of banks, of farm incomes and of other sectors should be taxed equally on an income tax account basis. That is the only way to do it. Otherwise, levy systems are abused and in general are not successful. They are all, as we know, just as the 1 per cent levy on farm incomes was, regretted.
I am unhappy about the provision in this section but do not wish to waste time. At this stage it is a relatively small amount of money and the whole section on resource tax is being wound down. I hope that this House, and particularly the main parties, will have the political courage to introduce a comprehensive income tax account system. I have no doubt that the Commission on Taxation would strongly recommend something along these lines. That report will vindicate strongly the views expressed by Deputies on this side of the House and in time, no doubt, an effective system will be introduced. From that system there should be about £60 million to £70 million a year in farm taxation as of now, instead of the messing which has gone on over the past six or seven years. That would bring equity into the question of farm taxation versus PAYE taxation. That equity is sadly lacking now in the overall taxation system. I sympathise with, fully understand and agree with the reaction of PAYE wage and salary earners when they see the discrepancies which exist at the moment. I quote from an interesting union magazine Liberty of February 1981, which sums up the position relative to farm taxation. It states:
...last year,
——that was 1980——
only one-third of all full-time farmers were liable to tax, no matter what their income was. This minority of full-time farmers, this one-third, only paid an average of £694 income tax while the PAYE workers paid an average of £1,345. Therefore the 120,000 full-time farmers paid only an average of £208 in 1980.
It went on:
The trade union movement wants all farmers to pay income tax in the same way as workers, if their incomes exceed the very low allowances.
I certainly share that view. The Commission on Taxation will vindicate a fair segment of all views which I have been expressing in this House since 1969. I look forward to reading the Commission's report.
In the interest of expediting the further 80-odd sections of this Bill — particularly as, since we have now lost one of our more distinguished Members, we are not likely to succeed in any vote in that context — I formally oppose the section, but do not want it to be put to a division.