This tax needs examination. It will lead to quite serious legal problems and many legal decisions will have to be made on cases involving it. It will be a legal minefield for administration and will open up vast new horizons for people in the accountancy and the estate agency fields.
It would take an army of civil servants to collect this tax, which is unhealthy for a democracy such as ours under present circumstances. The more civil servants are established, the greater will be the burden on the PAYE and PRSI sector. The money collected may be large or small, but anything which may increase rather than decrease the burden on the taxpayers would not be satisfactory. One of the redeeming features of this Bill is that the present exemption limit of £65,000 will be index-linked each year, as provided by section 90, as also will the income limit.
There are a number of other items which I will touch on briefly. One of the main reasons for the serious unrest amongst the PAYE and PRSI sector has been the vast amount of uncollected PAYE and PRSI payments. We are all aware of firms, private individuals and companies who have not made their returns. Everyone in the House knows them. A number of RTE radio and television programmes highlighted a number of companies who were making these deductions, who went into liquidation and then set up new companies. This led to justified anger. With regard to the different levies and increases in PAYE and PRSI, there has never been a genuine, determined effort by the Revenue Commissioners to collect these due amounts from the firms. These firms got into arrears a couple of years ago and got accommodation from the Revenue Commissioners, who to a large extent are understanding and helpful and I am not criticising them for that because I admire their efforts in that direction. Having been in arrears, they make an arrangement to pay these PAYE and PRSI deductions as they are made and if the Revenue Commissioners fail to ensure that these companies meet their commitments, they are failing in their duty.
There should be far more field officers in the Revenue Commissioners' Office to visit these firms and ascertain whether the employees are still with them and that all deductions from pay are being forwarded to their office. If the firms are in default, the workers concerned should be informed that the deductions from their wages are not being sent in to the Revenue Commissioners and, in conjunction with their union, should ensure that no further deductions are stopped by that firm but that the amount liable is collected direct by the Revenue Commissioners. In the past, rate collectors called to collect bad debts and made sure that these were paid. There would have been far fewer protests because there would have been a far greater amount of money available to spend in the running of the services if the Revenue Commissioners had the necessary field officers to make these collections.
A responsibility is laid on the shoulders of the Revenue Commissioners and on the Department of Finance to see that this money is collected. The unions should also play a more active role in ensuring that the returns are made immediately. This would help to ease the burden on all taxpayers, in reducing the amount that each would have to pay. The whole business of fly-by-night companies forming, taking the assets and starting anew would have been avoided.
With regard to the proposal to bring an additional estimated 90,000 farmers into the tax net, this was promised also by the Opposition under Deputy Haughey as reported in The Irish Press of Saturday, November 6 1982:
Mr. Haughey promised also that the income tax code would be extended to farmers as a whole. The Government believed that the farming community should make a much greater contribution by way of income tax, now that rates have been removed.
That was an article by Michael Mills in The Irish Press of Saturday, 6 November 1982. While the completion of returns and so on will cause a lot of difficulties for farmers in the long run, for the sake of equity and everything else, it will be of benefit to everybody, that these people pay their tax on normal returns the same as everybody else. There will be a certain number of farmers who will be liable to tax under the £40 valuation limit but a certain number of others who will not be.
I might quote from the Minister's introductory remarks at column 416 of the Official Report of Thursday, 5 May 1983 when he said:
Farmers who have not been liable for income tax up to now will be required to fill in details of their business and personal circumstances in a farm profile form with a view to the identification of those who would have a taxable income.
He said, at column 417:
I consider that the profile fully meets the Government commitment to a system which will deal simply and fairly with the large number of small farmers newly liable for income tax.
I would hope that those forms would be as simplified as is humanly possible. I would hope also that the period over which a farmer would have to go back would be no more than one or perhaps two years. In this respect I have noted with concern some reports that some of the farm profile forms would require farmers to go back over a period of five to ten years. It would be impossible for farmers to give details of buildings, purchase of machinery and so on five or ten years ago. If that were to be the case it would place additional work on the Revenue Commissioners which would be totally unnecessary.
The Minister is to be commended for reducing the VAT rate on room sales in hotels from 23 per cent to 18 per cent. The Irish Hotels' Federation have acknowledged that this is a concession they were seeking and for which they are grateful. We are all aware that our hotel and tourist industry is encountering enormous difficulties because of the cost factor here.
This Bill deals with the different rates of VAT and with increases in excise duties and so on. In recent years I have spoken at length about the problems confronting vintners, people such as Irish Distillers, Guinness and so on, and the duties imposed on beers and spirits. Many surveys have been undertaken showing that our cost factors vis-à-vis those in Northern Ireland and Britain were much higher. Indeed we do not need any survey to tell us that. When one visits Northern Ireland or Britain and buys one drink in a bar one realises immediately that our cost factor is about 40 per cent higher. This is something everybody in the tourist industry is aware of and is the reason also that so much smuggling goes on. This is something to which I drew attention about two years ago. We must endeavour to create a competitive climate here so that tourists coming to this country will find it some way attractive rather than the position obtaining at present with our cost factors very much in excess of those in Northern Ireland, Britain or many continental countries. Therefore that section of the Bill dealing with the reduced VAT rate on rooms in hotels is to be welcomed.
Also in his introductory remarks on this Bill, as reported in the Official Report of 5 May 1983 the Minister said:
The changes in legislation will be supplemented by administrative improvements.
I suggest a number of administrative improvements the Minister might consider. First, it is essential to cut down on needless bodies and authorities. We in this House must give the leadership in this direction. I spoke here last evening about the proposals for Bord Poist and Bord Telecom and said it was lunacy to consider their continuance. I would ask the Minister for Finance to give them the chop because I do not think they are desirable or necessary particularly when one sees the cost of accommodating ten people, £1 million.
There is then the proposal to introduce charges for water, sewerage and planning permissions. An Bord Pleanála costs the State money and has become completely politicised. I see little future for that body and do not feel its continuance is necessary either. Indeed I might recommend to the Minister for Finance also to forget about the appointment of an ombudsman. We have, I would hope, a diligent Parliament fully representing our people.
When we talk about the collection of taxes it should be remembered that generally taxes are collected for running expenses and that, as a democracy, we who represent the people must carry out our duties properly. There are proposals, albeit distant proposals, for having a Garda authority. It is my honest opinion that there is no necessity for a Garda authority here.