Deputy Michael O'Kennedy reported progress on amendment No. 17 to section 9. We are discussing amendments Nos. 17 to 27 together.
SECTION 9.
Private Members' Business. - Finance Bill, 1983: Committee Stage (Resumed).
Debate resumed on amendment No. 17:
In page 14, line 20, to delete "earlier" and substitute "later".
(Deputy O'Kennedy)
In explaining the reasons for the various amendments in my name on behalf of the Fianna Fáil Party I had got as far as amendment No. 20. To facilitate the business of the House I do not intend to repeat anything I have said. I will now proceed to the background to amendment No. 21. If after all the procedures have been concluded the appeal commissioners determine that the assessment should stand, we are asking for a period of 28 days after the conclusion of the proceedings which, in our submission, is a very reasonable period, a very identifiable and limited period, to enable the matter to be reconsidered by the appeal commissioners as if it were adjourned for that period. Our amendment suggests that in page 14, line 39, after the word "given" the following words should be inserted:
Provided, however, that if within a period of 28 days of the making of such an order the returns and the statements of profits and gains and schedules, as requested by the inspector, relating to such returns are submitted to the Appeal Commissioners the appeal shall be deemed to have been adjourned for a period of 29 days from the date of the hearing and paragraph C of this sub-section shall not otherwise apply.
The safeguard from the Minister's point of view is that if the returns and the statements of profits and gains and schedules as requested by the inspector are submitted to the appeal commissioners within a period of eight days, the appeal will be deemed to have been adjourned for a period of 29 days, that is, to the date following the 28 days, to enable the appeal commissioners to deal with the appeal. This is to cover the possibility, which no one in this House can envisage at this point that for good, bona fide reasons, perhaps ill health or absence from the country, the appellant was not in a position to meet the timescale provided in this subsection of section 9. Because of that we limit the provision in our proposal to 28 days which is an indication of our reasoned approach. I hope the Minister and his advisers will see the reason behind that and be able to accept the amendment.
At this stage I do not think we need to proceed with the next amendment, No. 22:
In page 14, line 40, to delete "shall" and substitute "may".
At the moment it reads that this paragraph shall not apply if, on the hearing of the appeal, the appeal commissioners are satisfied that sufficient information has been furnished by or on behalf of the appellant to enable them to determine the appeal at that hearing. At this stage we accept the wording and intention there, and we are not proceeding with the substitution of the word "may" for "shall".
I come now to two very important matters of substance in relation to the Bill, that is the provision contained in subparagraph (ii) of subsection (d). I am talking now of lines 17 to 22, inclusive, and lines 47 to 54, inclusive. Basically both of those provisions as they stand in the Bill impose what we regard as being potentially, if not actually in every case, a very unreasonable condition on the appellant before his appeal can be admitted. As has been stated already, in each case the tax charged by the assessment in respect of which the application is made has been paid together with any interest thereon chargeable under the provisions of section 552. Then at subparagraph (ii) of subsection (f) we have a similar provision which reads:
at the time the application is referred to the Appeal Commissioners the tax charged by the assessment in respect of which the application is made, together with any interest thereon chargeable under section 550, has been paid, and ....
We have a very good, cogent reason for putting down those amendments. We are at this point dealing with assessments. Those with which we are concerned obviously are not deliberate but occur through no fault of the appellant for one good reason or another — and there can be a wide variety of such reasons. But whether deliberate or otherwise, he has not been able to submit the necessary returns. Before he can proceed to appeal under these provisions, a section is being introduced here requiring him actually to pay the tax charged by the assessment — that is the first point — and, in addition, any interest thereon chargeable under the provisions of section 550.
All of us have experience of assessments. I might say that the Minister, in respect of the kind of people who might be covered — mainly the self-employed, people engaged in a trade or profession — indicated in the course of a reply in the House in March last, and confirmed later on the motion on taxation, that the figure of almost £1 billion which emanated from this House and, unfortunately, was misunderstood as being the amount of outstanding tax in respect of the self-employed, was not in fact the amount due. The Minister went on to explain — almost two months later — that the actual amount probably due would be of the order of £80 million to £100 million. That is the difference between an assessment and the amount actually due in the final analysis, a differential of ten to one. If that is the case in respect of the reality as known to the Minister, what we are suggesting now is that it is unreasonable. Quite frankly, it is penal and imposes perhaps an impossible condition on an appellant to meet requirements such as those to actually pay the tax due in either of these clauses — and they apply in different ways — plus the interest before his appeal can be admitted.
Unless the Minister can produce very good reasons for this, I hope he would acknowledge the reasons behind our amendment in this as in the other areas. I do not propose to add anything to what I have said. The case stands on its merits and no extra argument from me is necessary to support it. It will be seen that there is not any provision for the repayment of interest, so far as I can see in this or any other section, to the appellant if he is successful. Other sections specifically exclude the repayment of interest to an appellant who has overpaid. That should be balanced with a requirement in ease of the Revenue Commissioners at this stage. I should like to hear the Minister on what might be called the consideration for this new provision, because there are always two sides and there should be a balance of relationship between them. Even in the case of a very high assessment, which can and obviously has happened in some cases then at least an appellant who may have to continue his business, who may find in may cases that the assessment is of such an amount as to actually place him in extreme financial difficulty, should get the benefit of interest. I am quite sure the Minister would not want that to be the outcome of an over-assessment which the Revenue Commissioners would have to make. I am not saying that the Revenue Commissioners or an inspector of taxes would deliberately overassess. But I am saying that experience has shown that assessments of their nature, as the Miniter's own statements bring out in evidence, are in many cases well above what will be the ultimate liability.
I want to come now to the final amendment in the series of amendments on our behalf here, amendment No. 25, which reads:
In page 17, lines 3 to 8, to delete sub-paragraphs (i) and (ii), and substitute the following:
"(i) in section 416 (10) after `desires' in line 37, to insert the following words `and establishes to the satisfaction of the Court that a public hearing would be damaging to the appellant in his trade, business or credit,' ".
Sub-paragraphs (i) and (ii) read:
(i) in section 416 (10), by the deletion of ", and every hearing by the High Court or the Supreme Court of a case stated under section 428 or 430 shall, if the person whose chargeability to tax is the subject of the case stated so desires, be held in camera", and
(ii) by the deletion of section 420,
We want to add to this, after the word "desires", because this is of particular importance, the following words: "and establishes to the satisfaction of the Court that a public hearing would be damaging to the appellant in his trade, business or credit,"'. We say that because, first of all, the Circuit Court hearings have always been in camera, for good reason, not just tradition but also because matters of this sort, of their very nature, have been very confidential and have been so treated in the courts.
This relates to the case stated, which remains. As the Minister will know, a case stated only applies to the High Court or Supreme Court on a point of law. It is not an appeal on the facts, it is not an appeal on the merits, it is purely limited to the point of law to be argued before the Supreme Court or the High Court. We feel that because it is a point of law only it should protect particularly the right of the applicant on the case stated to ensure that nothing needs to be disclosed. Because it is dealing with a point of law—not facts, not merits but simply a point of law — above all else we must protect the disclosure of anything that could damage the trading, professional or business interest of the applicant, be it a person, partnership or corporation. For that reason the Minister will be conscious of the fact that unnecessary disclosure in a court of law or elsewhere, of the trading position of a person, partnership or company unfortunately can damage the interests of that person, partnership or company. One thing more than any other that is involved in business is confidence. Sometimes reporting which inevitably has to be a summary of what proceeds in court, can and, in our view, would run the risk of damaging that interest. It is for that reason we feel it would be not only in line with precedent, as in the Circuit Court, but also very much in line with the principles established under the hearing of tax cases in court, that cases stated only on points of law should be held in camera. We believe our amendment would guarantee that, if it could be proved that it would be damaging to trade, business or credit.
Where the appeals commissioners dismiss the appeal the assessment should be final and conclusive without the right of appeal to the Circuit Court which has been there. This is why we feel it necessary to put in the safeguards which we regard as minimal. We are now entering new territory and the right of appeal to the Circuit Court is being terminated in these circumstances. I have indicated that there may have been circumstances in which that has been used to delay payment but when we are moving into new territory then the amendments we propose are the very least the Minister should adopt.
I do not support any of the amendments put down by Deputy O'Kennedy because they are entirely aimed at weakening the Bill in relation to tax evasion and avoidance. The row about the whole question of taxation has developed because there is a clear understanding among PAYE workers that there is a large amount of evasion of tax and persons who avoid tax and owe money to the Revenue Commissioners can make deals quietly, surreptitiously and secretly and the odium of depriving the State of the resources necessary to pay its way does not fall on these people. In a situation where an ordinary citizen faces a court for non-payment of a television licence or road tax, I do not see any good reason why persons who are in business should not be encouraged to pay their way. We are continually told about providing an incentive for the ordinary person to work, but we must also provide an incentive to people who may be inclined to dodge taxes to pay their way.
The amendment put forward by Deputy O'Kennedy seeks to weaken that position rather than strengthen it. Amendments Nos. 26 and 27, which we have put down, seek to strengthen this section and to make it less likely that people will try to hoodwink the Revenue Commissioners.
This is a section to which the Minister should give some thought. It is a little bit strong in some areas. I do not support in any way people who evade tax or evade their responsibilities but it seems clear that this section has been drafted by people who are not tax practitioners. I do not imagine that the advice of the Institute of Taxation, not a body of accountants but people interested in tax, or of the Commission on Taxation has been taken on the detail of the subsection. Clearly, it has been drafted by one of the two sides involved in any dispute about taxation, that is, the Revenue section. It has been given the imprimatur of the Department of Finance and the Minister, but I believe it will present more problems than it will cure. I hope that before Report Stage the Minister will take some impartial independent advice because I feel he is being walked into something which may suit the Revenue Commissioners very well but will not contribute positively towards bringing in outstanding revenue.
The Workers' Party and others may feel they are doing everybody a great favour by supporting the amendment, but it is the small man who will suffer most under this section. Most people feel that it applies only to Schedule D case 1 and 2 Taxpayers but it will also apply to Schedule E Taxpayers, into which category most salary earners and pensioners fall. Since I have been involved in taxation, many constituents come to me with problems. Older constituents are baffled and confused by the simplest of forms. They may fail to declare some small income or fail to return the form and a year or so later they are assessed for tax. The section will create great difficulty for these people who are not in a position to pay tax.
The explanatory memorandum which accompanies this Bill states:
The existing legislation provides that where, due to absence, sickness or other reasonable cause, a taxpayer was prevented from giving notice of appeal within the time limit of thirty days, he may apply to the inspector of taxes for the admission of a late appeal, and, if the inspector refuses to grant his application, the appellant may require the inspector to refer the application to the Appeal Commissioners. This provision is being amended to secure that an application made later than twelve months after the date of notice of the assessment, which would otherwise be admissible, will not be admitted unless the appellant pays the tax charged in the assessment concerned together with accrued interest thereon and submits his return of income and such other information as is necessary to enable the appeal to be determined.
That is all very well if a person is in business and has a good income but an old person will not be in a position to follow this procedure and appeal in this way and such a person may be assessed to tax which he or she is not liable to pay. In trying to crack the nut the Minister is using a sledge-hammer and it will hurt many people needlessly. I have no problems with this section in so far as it relates to people who are able to pay but there are many people having very little income who may be badly affected.
There has been much erroneous talk about arrears of tax. Certainly there is a very substantial amount of tax outstanding but the original figures for taxes outstanding given in this House were, to anyone who knew anything about tax, incorrect and this caused a wave of concern and understandable anger arising from the necessary fiscal policies. I wonder why that it information was given in the first place. I do not believe it was very helpful.
I wish to express my concern about the use of confidential information by inspectors of taxes for political or organisational purposes. In other words, I object to the inspector of taxes using information obtained confidentially to make speeches on the "Late Late Show" on television programmes or on radio programmes. If people like that want to come into politics they can stand for election and make their speeches in this House and communicate the matter to the Minister as Members of this House. I feel very strongly about this. I have very strong objection to confidential information being used by people in this way. It gives rise to questions as to the political impartiality of the people involved and, if it continues to happen, the matter will have to be raised very formally in this House. It is worth noting on this particular section. There is a great deal of concern about the matter.
I should like to support the last point made by Deputy Mitchell and the general tenor of his arguments. We have to be very careful about something that is happening in our society today. There seems to be an increasing desire on the part of those whose job it is to implement the law to actually make the law. I find this emanating particularly from Garda Síochána sources. They are expected to implement the law but now there seems to be an increasing wish on their part to make the law. I find an increasing desire on the part of civil servants in the Revenue Commissioners in particular, whose job it is to administer the code, to make the code. If we get into that situation then we cease to be a free democratic society. We become a totalitarian society, a police State.
It is important we should all realise in everybody's interest that someone should make the law, namely, this House, and someone else should implement the law so made. The Minister should note that. The Revenue Commissioners down the years have been above reproach and suspicion in regard to their impartial administration and implementation of the revenue laws which have increased year by year. There has been that tradition of one group of people making the law and another group at arm's length impartially administering the law. If we start eroding that principle we are heading for a very different type of society from that in which people today wish to live.
I am surprised at Deputy De Rossa's attitude to our amendment. With all respect, I think he is under a misapprehension about this particular section and what our amendments are all about. This is not only about the slaughter of tax evaders, tax avoiders or anything of that sort. This deals with the appeal system and it is fundamental to the appeal system of taxation. We could have a system whereby the Revenue Commissioners would simply decide Citizens A, B, C and D owed so much tax and that is that. That would not provide any great problem of administration. But we have a system whereby the Revenue Commissioners try to ascertain what each individual should pay and then there is an appeal system. I should have thought The Workers' Party would be very much in favour of this system and I want to disabuse their minds of the idea that the appeal system is something used only for the benefit of a number of tax evaders or tax avoiders. The appeal system is there for every taxpayer. It is there for PAYE taxpayers and it is a very important part of the system so far as they are concerned. Very often the PAYE taxpayer has cause to go through the appeal system and he is entitled to have some such system where his case can be objectively and impartially decided.
First of all, it has nothing to do with the publication of settlements or fines or anything of that sort. It is almost exclusively here dealing with the right of the individual taxpayer, whatever category he fits into, to have some system whereby he can have his right decided impartially. The problem has been, of course, that some people have availed of this system to delay the payment of taxation. I am not sure that anybody can really ultimately avail of the present system to avoid or evade the payment of tax, but people can certainly delay paying tax.
I want to make the point — I am quite certain what I am saying is true — that very often these delays are as much the fault of the Revenue Commissioners as they are of the taxpayer or his advisers and I think any reasonable group of tax consultants, accountants and so on would confirm what I say. The delay in bringing assessments to a final conclusion through the appeals system is as often as much due to tradiness on the part of the Revenue Commissioners as it is on the other side. I do not blame the Revenue Commissioners for that because one thing that has always amazed me is how they and their staff have stood up to the enormous accumulation of laws we have piled on to them in recent years. It is not so long ago that the whole system was a fairly simple one and could be administered in a reasonably leisurely fashion by a relatively small establishment, but in recent years we have just piled on complex laws one after the other on the backs of the Revenue Commissioners, new system after new system of taxation, and they have had to absorb these very complicated systems and administer them. They have succeeded in doing that and it amazes me how they succeeded in doing it. So when I say the delay very often in bringing the appeal system to finality is as much due to the Revenue Commissioners as it is to the appellant I am not casting any blame on them. I attribute it largely to the enormous workload and the complexity of the workload the Revenue Commissioners have to face.
It is against that background that we, on this side, are asking the Minister to consider very carefully the case we have made. We must have an appeals system. In the interests of every taxpayer we must have such a system. The impression has been conveyed that there is a large group of tax evaders and tax avoiders. In fact we have a kind of identity kit — the self-employed, the professional men, business people who are constantly evading their responsibilities in this regard. That is not the true picture. Indeed, it is a slur on a very, very large number of people. The majority in our community meet their commitments and want to do so. They do not want to avail of sharp practice or loopholes and we should not deny simple, common, ordinary, natural justice to the vast bulk of taxpayers because a small group evade their responsibility by using the system to avoid their responsibility and that is what we have to address ourselves to here.
Whatever about the system itself, this whole statutory elaboration of the system is pretty well disastrous because I think very clever and intelligent lawyers will read through this section and not really be very sure what it is doing. There is a very real obligation therefore on the Minister in everybody's interest to put together a composite statutory provision governing appeals, and not have it as it is now, original sections amended away back, re-amended, re-amended and re-amended, so that we now have what amounts to a code of legislation made up of bits and pieces. The Minister should undertake that task of consolidating all the provisions governing appeals.
As to the merits of our different amendments what we want to ensure by these amendments is that the appeals system is what it purports to be. If we are not to have an appeals system then abolish it and I think the Minister is getting very, very near abolishing any realistic and meaningful system by what is set out in section 9. That provision amounts to almost a complete negation of appeals in the real meaning of the word "appeal". As far as I can see, the appeal commissioners now will have only an automatic function and I do not think it is necessary in order to get rid of the misuse of the system there is at present, to completely disembowel it in the way that the Minister proposes to do here.
Our amendments are very reasonable, very responsible and they are an endeavour by us — and it is not very easy to do it from the outside — to leave some element of genuine appeal in the system so that the taxpayer will at least have the satisfaction of the knowledge that he has gone through some reasonably just system of appeal even if, in the end, the decision is given against him.
My colleague, Deputy O'Kennedy, has gone through our proposals one by one and indicated to the House our reasons for them. We are particularly keen on the idea that the appeals commissioners should be left with that discretion which our amendment, to substitute "may" for "shall" in line 33 on page 14, would provide, because if there are to be appeals commissioners at all, if they are to have that name, surely they must be entitled to the capacity to decide or not to decide and not to make it mandatory on them by these provisions to come to only one decision. If it is mandatory on them to come to only one decision then it is not an appeals system at all. We, on this side of the House, would be very glad to co-operate fully with the Minister on Report Stage if he can come forward with a revised version of section 9 which would go some way to meeting what I think should be the genuine desire of everybody in this House namely to make sure that the system is not used to defeat the Revenue Commissioners in their legitimate attempt to raise the right amount of tax from every taxpayer and, at the same time, that every taxpayer is fairly treated, and I am talking here very much in terms of the type of person Deputy Mitchell was talking about, the small person whose tax bill might not be very much in the year but for whom it is just as important that justice should be done as in the case of the large corporation where there is £5 million, £6 million or £20 million at stake. I would ask The Workers' Party Deputies in particular to advert to that aspect of it. We are not just dealing with the identikit self-employed tax evader here. We are dealing with a system which should be available to every taxpayer and very often a taxpayer can have a legitimate case to put whether it is a case of expenses in his trade, travelling allowances or 101 different things. If we just have an implacable revenue machine grinding on, with no appeal, in effect, then we will do an injustice to many people and I do not think that is what anybody in this House wants.
The usual tradition is that the executive, in the form of the Minister, comes in here and seeks all sorts of draconian powers for the Revenue Commissioners. In fact, I will go a step further. The Revenue Commissioners usually come to the Minister and say they want X, Y and Z powers. The Minister, as a political person, very often exercising his own particular judgment decides that some of them are too draconian and too unfair to the taxpayer and he only brings a certain number of them here. Then in this House Deputies from all sides are always very vigilant in the interests of the individual taxpayer whereas the Minister presses the case for the extra powers for the Revenue Commissioners. That is an honourable role that we in this House should discharge. We should be vigilant here to defend the rights of the individual taxpayer and leave it to the Minister, with all the big battalions he has, to ensure that the revenue case is put effectively to the House and I suppose in the end carried through the House.
I want again to put to the House and the Minister our case in this regard. We are not seeking in any way to buttress a system which can be used by unscrupulous people to delay payment of their tax. We are, on the contrary, trying to ensure that there is a realistic, genuine and fair appeal system available to all taxpayers. For that reason I would appeal to the Minister, even if he does not accept our individual amendments now as they are put to the House, at least to take them in the spirit in which we are putting them forward and see if he can make any concessions to the ordinary taxpayer on the Report Stage because once we pass this law here and it goes into the machine the small individual taxpayer thereafter is a very miniscule and unimportant person when the mills of the Revenue Commissioners start to grind and when, as appears to us, there is no effective appeals system left to him or her.
I was delighted to hear what Deputy Mitchell had to say because much of what he said I wanted to say myself. The stated purpose of the section is to prevent taxpayers from delaying the collection of their tax by using the appeals system. What the Minister seems to have overlooked is that the delays are as often on the Revenue Commissioners' side as on the taxpayers' side. Any of us who have experience of dealing with the Revenue Commissioners can testify to that. There is also the fact that the appeals system itself is grossly overworked. In 1920 there were 100,000 taxpayers and two appeals commissioners. Now there are more than 1,000,000 taxpayers and only three appeals commissioners. In the tax year 1973-74 the appeals commissioners had a great deal of extra work to deal with, including inheritance tax, capital gains tax gift tax and some cases of valuation. Therefore, all the delays are not on the side of the taxpayer, but the whole tenor of this section is to suggest that all the delays are on the side of the taxpayers and that it is the taxpayer who must be dealt with, who must be pushed to eliminate those delays.
I am asking the Minister to clarify one point. Section 9 provides that in the case of an appeal that has been delayed, when the appellant does not furnish sufficient information to the appeals commissioner to determine the appeal, the commissioner will dismiss the appeal and the taxpayer will not have a right to have a rehearing in the Circuit Court. The section goes on to state that the taxpayer will still have a right of appeal to the High Court on a point of law. Will the Minister say if a person can appeal to the High Court on a point of whether a certain type of information will be allowed in an appeal to the High Court?
The section contains some draconian provisions when a taxpayer has not submitted an appeal in a certain period due to a mistake or illness. In that situation the section states that the taxpayer must hand over the entire amount of tax assessed to the Revenue Commissioners, plus interest, until the appeal is determined. I can recall a case in the last 12 months in Limerick city when a person who was working full time in a PAYE job and doing some part time work on a self-employed basis at night was assessed for £20,000 tax. He had been let down by his accountant, the appeal did not go in in time and the taxpayer eventually brought the point to a head. Eventually I settled that case with the tax office in Limerick for £250 — that was the admitted liability. If this section becomes law that man would have to pay £20,000 in order to have the appeal determined and he would lose the interest on that. Surely that is draconian.
Like Deputy Mitchell and all other Deputies, I do not condone tax evasion. I appreciate the Minister's position because he has to do certain things. The Minister has to take certain measures, as do the Revenue Commissioners, to combat tax evasion; but when people have to pay over tax, to part with money which they do not owe, the Minister has crossed the line. People should not have to pay over enormous sums which they do not owe in order to combat tax evasion.
What about the PAYE man?
His tax is deducted at source.
If it is wrong in one case, does that mean the wrong should be extended to others?
On the provision to abolish the hearing of such cases in camera, Deputy Haughey argued cogently about trade secrets possibly being revealed. I would make another point on that provision. The taxpayer who contests his assessment, however legitimate his case, has his name publicised. People tend to read headlines and they say “Did you see such and such a person's name in the paper — he was trying to dodge his tax?” That would be said regardless of how legitimate the case might be because people tend to read such headlines and to jump to the wrong conclusion.
I should like the Minister to tell me the reasoning behind the part of the section which states that when a case has been heard by the appeals commissioners and when the taxpayer requires it to be heard in the Circuit Court the appeals commissioners have to make out a certified form and present it to the Circuit Court. The right to a rehearing in the Circuit Court appears to me to mean just that: the right to have a case reheard from start to finish. This section presents a busy Circuit Court judge with a statement of the entire hearing before the appeals commissioners. It might say: "This is the way we decided the case". That must have a prejudicial effect because in many cases the Circuit Court judge will take the view that the appeals commissioners are used to dealing with tax cases and he might ask why he should feel any differently.
I am not casting any aspersions on the appeals commissioners when I say that people tend to put the case in their own words. When people are asked to write cases in a specified form they tend to justify the conclusions they have reached, however much they might try to guard against that tendency. I agree with Deputy Mitchell's point about the danger of people acquiring information in their capacity as tax inspectors or as other employees of the tax office and using it for political purposes. In the last two days it has been brought to my notice that people have gone on the media in the past three months, representing tax officials' union, etc, and have pointed out that there are crocks of gold at the end of the rainbow and saying that the appeals provisions would have to be tightened up. They were politically involved, members of a certain political party. They came across on the media as being totally objective revenue commentators when in fact they are members of a political party and that party are opposing our amendments tonight. That should be exposed, and I can tell the Minister that I will be exposing it.
I urge the Minister to look again at section 9. His attitude on the earlier sections has been simply to bulldoze all our amendments and all our suggestions out of the way. There has not been any compromise whatsoever, no consideration for reality. We are trying to make the Bill work. We are not supporting tax avoidance or evasion. I appeal to the Minister to remove some of the more draconian provisions from this section. As Deputy Haughey has said, there is an appeals system, there is a good reason why it should be there, but we must keep it as a real appeals system. We do not want the Revenue Commissioners or the appeals commissioners to be the final arbiters of the fate of the Irish taxpayer.
I do not intend to go over the ground covered by previous speakers but I want to ask one question. It refers to a late appeal which is not accepted by the inspector. The section provides that if the conditions for an appeal are not complied with within 15 days the appellant may require the inspector to refer the application to the appeals commissioners. The appeals commissioners may allow the application if the tax is assessed and the interest paid. How long will it be before the appeals commissioners will have to look at the appeal? People who come in with 1981-82 assessments will be caught by this provision. Will they have to wait until the thing goes into the hands of the sheriff before they can make late appeals?
I wish to point out our attitude to this section and to reply to some points made by Deputy Haughey. I agree entirely that an appeals procedure is very important for PAYE workers as well as others because they are often caught, through neglect or lack of knowledge, owing hundreds of pounds. I submit that this section does not deal with an appeals procedure for PAYE workers. Their appeals procedure usually consists of shouting through a hatch with a queue around them trying to argue their case. It usually ends up in a shouting match and if they argue loudly enough a supervisor may talk to them and they may get a hearing. The situation is that the more tax you owe the better reception you will get. If you owe up to £1,000 you are shouted at through a hatch; if you owe a up to £10,000 you might be brought into a room by a supervisor, and if you owe £100,000 you might even get to see a commissioner and you might be brought in and given coffee, gin and tonics, and what have you.
Has the Deputy experience of that?
The procedure is then to try to make a deal. It is only when the assessments are completed and the appeal has been made through the Revenue Commissioners that one has to go through the courts — the Circuit Court, the High Court and the Supreme Court. There is very little prospect of any PAYE worker having to go through the courts procedures.
The amendments put down by Deputy O'Kennedy indicate fairly clearly that he is dealing with a different area when he says in his amendment:
Provided, however, that if within a period of 28 days of the making of such an order the returns and the statements of profits and gains and schedules, as requested by the inspector, relating to such returns ...
He is thinking of something other than the PAYE workers. His amendments are emasculating the purpose of the Bill when he uses "may" instead of "shall". "May" has no legal meaning. Another amendment says:
"...insert the following words "and establishes to the satisfaction of the Court that a public hearing would be damaging to the appellant in his trade, business or credit,"'.
Any public hearing, whether it be by a public health inspector or the Revenue Commissioners, will damage a person's business, trade or profession.
This section is intended to deal with those who owe higher amounts of tax than ordinary workers — at least thousands of pounds — and it is intended to strengthen the hand of the commissioners against them. I agree with Deputy Haughey when he says that giving more power to the Revenue Commissioners is not an answer to the problem. They are not capable of using the powers they have at the moment because of insufficient staff, and the existing systems and bureaucracy tie them up. This section probably will not have any great effect. I recognise that there are many other things required to give it effect and to enable taxes to be collected. As far as it is an indication of a commitment, we support the section and oppose the amendment.
I am not sure if the last speaker was engaging in fantasy when he spoke about entertainment of that kind in the tax office, but this is far too serious an issue to be speaking in those terms. From representations I have made regarding cases with the Revenue Commissioners I have not heard of people having been shouted at through hatches. On constitutional rights alone, the Minister should take a very hard look at this provision because a very strong case can be made concerning a person's rights within the Constitution, and whether they can be obliged to pay money and interest without a case being proved against them. If it were proved to be against the Constitution this in itself would not invalidate the entire Finance Bill, but it could erode the credibility of legislation being passed in this House. In recent years we have seen legislation being challenged and legislation which had not been sufficiently thought out and debated has also been challenged.
Like the appeals system which has been treasured by the Revenue Commissioners as well as the people who sought sanctuary of appeal, this is an integral part of our democratic process and it is wrong to be tampering with that process, as is happening now. There are an enormous number of issues at stake. People find it very hard to understand the volume of literature coming from the tax office. They may have arrived at a stage where, in a free and open economy, they are incapable of managing their affairs without the assistance of accountants, solicitors and so on. This is a strangulation of a free working economy, getting it tied up continuously. I am not for one moment casting any doubts on the ability of accountants to assist us in our management of book-keeping affairs, but there are many people who find it impossible to pay accountants' and solicitors' fees to go through this very lengthy and costly system of appeal. I want the Minister to consider whether he is going against an individual's rights enshrined in the Constitution.
Deputy Mac Giolla would be surprised at who is drinking gin and tonics these days. I offer that as an opening remark. The purpose of section 9 arises from the concept that there is an enormous delay in the appeal system because of everybody using it and that it should be speeded up. That is the philosophy behind tackling the appeal system, particularly the watering down of the Circuit Court appeal.
If the reason is delay could the Minister tell us, if he has the information, what percentage of tax cases actually go to the Circuit Court? That would give us an indication of the size of the problem with which we are dealing. Does the Minister know if they tend to be large or small cases in general? To see if this amendment is really necessary, would the Minister tell us the approximate average waiting time in these cases? That would give us a clear picture as to whether section 9 was needed in the first place. The Minister's figures may demonstrate, as I think they will, that it was not needed at all.
No matter how one looks at this attack on the Circuit Court availability and no matter how one reads this legislation, at the end of the day it denies access to the Circuit Court to a substantial number of people. That seems to be the intention of the legislation. We should think long and hard before removing from any group of people the right of access to the Judiciary. As has been mentioned by other speakers, there is a feeling that the Revenue Commissioners get absolutely nothing while this lengthy procedure is going on and that they are very much out of pocket. The reality is that taxpayers whose cases are under appeal are required to pay to the Revenue Commissioners, on account, 80 per cent of the estimated final tax liability and also interest. The most the Revenue Commissioners can be out of pocket by allowing people to use the Circuit Court is 20 per cent of what will ultimately be due. If that is the price that must be paid, if the number of cases is not that large and the amounts are not enormous, then it is a small price to pay for retaining for a group of taxpayers the right to go to the Circuit Court.
A previous speaker spoke about the PAYE person having rights in this regard. I accept, as Deputy Mac Giolla says, that the person on PAYE cannot dash into the Circuit Court and say that he or she is paying too much tax; but many PAYE people have gone to court on the subject of benefit-in-kind and expenses and other areas which are more discretionary. However, most of the people who will be caught by this section on the right to appeal will not be big business. Big business will engage big accountancy firms which will ensure that the documentation is presented in time and they will have no difficulty. The small people will be caught — shopkeepers and those who own small businesses with a couple of employees and perhaps some second or third cousin trying to put the books together. That is not far from being a small farmer or a small shopkeeper. These people are certainly worthy of being called workers. They will be hit by this and it will not help the PAYE person to remove from our Statutes the right of access to the Circuit Court. That is a dog in the manger approach. This right has existed since the middle of the 19th century. If the number of cases is not substantial and the average waiting time is also not substantial, why remove the right to go to the Circuit Court in the first place? It does not make any sense.
I do not propose to repeat what has already been said. The right of appeal should be protected, otherwise the PAYE worker and small businessman will be hit. What is the alternative? Deputy De Rossa said that among PAYE workers there was a feeling that quite a share of money is due to the Revenue Commissioners by way of tax. That is a fallacy which has arisen because of unfair assessments by the Revenue Commissioners. These look good on paper but bear no resemblance to the amount actually due. I urge the Minister to give serious thought to this section as it gives unlimited power to the Revenue Commissioners and will affect the wrong people, especially the small man.
The Minister should introduce a simplified system of taxation which will appeal across the board. I agree with Deputy Mitchell in his objection to the statements made by inspectors of taxes on recent radio and television shows. They divulged confidential information which they obtained privately. In doing so, they must be breaking the code of ethics within the public service and especially within the Revenue Commissioners. Let the taxpayer see that the system of taxation is fair. It is in that context that I ask the Minister to consider our amendments.
Having listened to what the Deputies have been saying with close attention, two things have struck me in particular. One is the obvious concern felt by Deputies in avoiding a situation where ordinary people are put to unnecessary trouble to show that they are paying their due share of taxes, complying with the law and acting in a responsible manner. I appreciate that point. That is what we all are worried about. Of course, we all want to make sure that our laws, whatever their objectives, are applied and can be applied without undue interference in the ordinary day to day business of the citizen.
Another point which I have noticed about many Deputies' contributions is the degree of exaggeration about the effects of the provisions of this Bill, and a certain amount of misunderstanding about what the current provisions of the law actually are. I will develop those points in a moment.
This section of the Bill is not in any sense a measure aimed at any particular group of taxpayers — nothing of the kind. It is aimed at simplifying the operation of the law and ensuring that the law will bring about the intended result. What we have at the moment in some cases is a series of provisions which, as Deputy O'Kennedy mentioned, having been put together in many ways willy-nilly over a long period and in many Finance Bills, has a series of loopholes. The end result is that the law is not applied and perhaps not entirely capable of application in the manner intended. As one illustration — and I will not mention the actual figures because Deputy O'Kennedy has some allergy to these figures — we can look at the figures set out as being taxes outstanding as at 31 December 1982. We will take one category of taxpayers, making all the qualifications that are needed to take account of the fact that a large part of this is based on assessments, a very large part of which turn out not to be due. Of the figures outstanding——
Will the figures which the Minister is going to give us now include assessments?
I am not going to give the Deputy any figures. I am speaking about the amount classified as outstanding on the basis of the assessments that have been made.
I was careful to qualify that. It is the point that Deputy Mitchell and others as well as myself have been concerned about. The Minister is about to give figures that are based on assessments in respect of outstanding tax.
I do not intend giving figures but if the Deputy will bear with me for a moment I will illustrate the point. Of the figure outstanding on the basis of assessment — and we all know that a large proportion of that would be discharged as not being due — about 60 per cent was under appeal or inquiry. About 5 per cent was awaiting demand while about 20 per cent was under demand and about 2½ per cent was being dealt with by the arrears branch of Revenue. The balance of just over 10 per cent was under enforcement.
It is part of the difficulty we have that at every one of those stages it is possible to go back to the appeals procedure. That creates a situation where appeals can be replicated time after time. First, that renders it extremely difficult to operate the system and, secondly, it creates loopholes for people who are trying to delay payment of their taxes.
The second illustration I would give is by way of a series of examples based on profiles built up of actual cases. These are not actual cases but profiles as to the kinds of circumstances that can arise. In one very straightforward type of case the time span between the making of an estimated assessment and a final adjustment of that assessment was 13 months. Another typical profile arising from the necessity for repeated listings of appeals can produce a time span of 29 months between the time of the estimated assessment and the final adjustment as being the amount actually due. In a third type of case where the late appeal was admitted with a series of previous appeals, there was a time span of 34 months between the making of the estimated assessment and the final adjustment of it.
I do not know what is the view of Deputies on the other side of the House but I do not regard that kind of situation as one that should continue. It is certainly not a situation that produces a very effective administration of the system. In discussions like this there is always a temptation to lay blame but there is never any case of this kind in which the blame rests only with one side. Undoubtedly there are cases in which taxpayers deliberately spin out the process. We all know of such cases. Equally, there are cases in which the delay is due to the fact that the Revenue Commissioners or the appeals commissioners have a backlog of work so that it requires some time to take the next stage in the process. There are cases also in which the advisers to taxpayers are not as rapid in their movements as they ought to be. That produces a situation in which there are delays in dealing with cases but we are dealing in this section with the structure of the appeals system and with drawing up a system that will bring about the more effective implementation of the tax system without — and I insist on this — destroying or taking away the appeals system. I would not contemplate a proposal by which we would rob the appeals system of its reality but what I want to do is to circumscribe the possible use of the appeals system as simply a means for delaying payment of taxes.
There are some areas in which problems have been adverted to but where problems do not arise. Deputy Mitchell among others referred to the difficulties that might be experienced by Schedule E payers as a result of the provisions of the Bill. Normally these taxpayers are not in a situation where assessments are made. The PAYE taxpayers certainly are paying their tax by way of deduction. Normally, therefore, they are not concerned either with assessments or with appeals. The problem that arises in most cases in relation to this category, particularly in relation to PAYE payers, is establishing that the proper allowances are made and that the proper deductions are made from salary but that is not dealt with normally in the appeals system we are talking of.
That does not mean that it could not be dealt with in the appeals system.
I am saying that the normal cases are dealt with quite apart from the appeals system. The system is designed to allow for this and where an error is made in the estimation of allowances, the case can be taken up and the adjustments made in the normal course of events.
The remarks made by Deputy Haughey about the history of our tax system were very much to the point in some respects. As I have said, we have a system that has developed over a period. I would be prepared to give serious consideration to the Deputy's suggestion that we look at the whole system and study the kind of rationalisation that it might be possible to make in order to render the system more transparent and easier to apply. In the section we are talking of now we are trying to streamline the appeals system and remove from it some of the defects that we have experienced. The kinds of cases that give rise to most of the abuse of the system are similar to that mentioned by Deputy O'Dea, that is, where there is a certain amount of negligence on the part of accountants, a certain amount of delay on the part of taxpayers and then the operation of the appeals system, all of which produce a combination of circumstances that lead to delay and lead in many cases to a considerable degree of frustration for the taxpayer. Once they realise what is going on and that they are behind, many people who are then involved in the system, after it has been churning on for a while as it can churn on through the system, begin to feel that the whole thing is becoming a bit ridiculous, and come to a point sooner or later where they begin to put pressure on their advisers or their accountants to get the case settled and out of the way.
A question was asked about the submission of a report by the appeal commissioners to the Circuit Court. We are providing that this will be in a prescribed form and will set out the terms of the decisions of the appeal commissioners, not the reasons for their decisions. In that sense they will not be stating a case to the court and, therefore, it will not be prejudicial.
I want to look briefly at the question of the confidentiality of these proceedings. There is an important background point I should like to make before coming to the specific points in the amendments. The hearings of the appeal commissioners are in camera. They are confidential, as is the case in the Circuit Court. There we are dealing with the amounts involved, with the quantities involved, with the actual business of the person concerned. The provision we are making here is that cases will be stated to the High Court or the Supreme Court only on a point of law. In a case concerned only with a point of law, we will not be dealing with the actual amount of tax due.
We could be. I could give examples.
No. We will not be dealing with the amount of tax due. We will be dealing with the interpretation or the meaning of a provision or of a statute to determine whether the circumstance in question was covered by the statute, for example. It would not be a point of fact to determine how much tax was due by the individual or taxpayer in question, but as to whether tax was properly due on foot of whatever the statute was in relation to that case.
I do not want to interrupt the Minister, but the amount of tax could depend on a question of law.
First, it has to be determined whether tax is properly due on foot of a particular section or statute. That is the point which will be referred to the High Court, not the amount due.
I do not accept that.
I want to make the point to Deputy O'Kennedy that that is just the kind of case that is of particular interest to the general public, to tax practitioners, to people in business and to taxpayers in general, because normally it would produce a new definition on some point on the basis of which people would then act in terms of organising their tax affairs.
I oppose the amendments put forward because their effect would be to draw back in every case from the provisions I have in the Bill. The provisions in the Bill are put there because the Government consider they are a reasonable way to reorganise our appeals system, taking account of the necessity to protect the rights of the taxpayer to reasonable appeal, and taking account also of the necessity to ensure that our tax system works in a reasonably efficient manner.
I want to describe the effects of the provisions we have in this section. Where an appeal is lodged, given the terms of this section, and a point has been reached where a further adjournment of the appeal is not allowed by the appeal commissioners — and this would not happen before a period of nine months after either the date of the making of assessment, or the end of the year of assessment to which the tax appeal relates, whichever is the sooner — and the appellant has still not furnished a return of his income and other information necessary to enable the appeal to be determined, the appeal commissioners would dismiss the appeal. In such cases the appellant would have no right to a rehearing in the Circuit Court, but would have the right on a point of law to go to the High Court.
We have there a series of conditions which would mean that the right of the person concerned to the appeal would be safeguarded, and would become inapplicable only because the taxpayer in question did not provide the information within a reasonable period of time after the making of the assessment, or after the end of the tax year to which the assessment related. One of Deputy O'Kennedy's amendments asks me to substitute "later" rather than "sooner" in the case of the timing. The effect of that would be to go back nearer to a situation where substantial delays could occur before we would get to the point where an appeal would be determined.
Existing law provides that where, owing to absence, sickness, or other reasonable cause, an individual was prevented from giving notice of appeal within the time limit of 30 days, he can apply to the tax inspector for the admission of a late appeal. If the inspector is not satisfied that the application should be granted, the applicant can request the inspector to refer his application to an appeal commissioner. This provision is being amended to provide that an application made later than 12 months after the date of the notice of assessment, an application which would otherwise be admissible, will not now be admissible unless at the time of the application the applicant has paid the tax charged by the relevant assessment, together with any interest due thereon, and has submitted a return of income and the other information required in order to enable the appeal to be determined.
These conditions would arise only where the taxpayer or the applicant had not furnished the information required in order to allow the appeal to be determined. It can reasonably be said that this would be a case where the taxpayer, or his adviser, or his accountant, had not taken the kind of steps normal care and prudence would dictate that he should take in those circumstances.
I already mentioned the reason why I am proposing that hearings in the High Court should not be held in camera— because they are on points of law. I have already mentioned that, on a rehearing in the Circuit Court, there would be, under this section, provision for making available to the Circuit Court judge the terms of the determination of the appeal commissioners but not the reasons therefor to ensure, amongst other things, that the Circuit Court Judge had the kind of information that was useful and not prejudicial to his hearing of the case. In this connection Deputy Séamus Brennan asked what proportion of cases went to the Circuit Court and what was the average waiting time in relation to an appeal. Quickly, I cannot give a proportion of the cases but it would appear that there could be up to 50,000 cases on Circuit Court appeal during the course of this year.
What percentage would that be?
I cannot give the Deputy a percentage of the total number of cases; I can get that information for the Deputy later on, but the total number of——
Just for clarification, when the Minister said there could be up to 50,000 cases——
It is expected that there would be somewhere in the region of 50,000.
50,000 cases on appeal to the Circuit Court?
Yes, on the basis of appeals already in the pipeline and on the basis of experience of past years.
Ones that could qualify for appeal to the Circuit Court. Is the Minister saying that the likelihood is that there will be 50,000 cases coming for appeal before the Circuit Court? If that is the case I should like to see some firm evidence of that because I must say it would demonstrate the enormous capacity of the courts——
I share the Deputy's admiration for the capacity of the courts. But the Deputy knows as well as I do that one does not have to go very far to find substantial numbers of appeals coming before a Circuit Court in the course of a morning and being discharged fairly rapidly.
How many cases were there last year?
I would have to have notice of that question but we can get that information for the Deputy. The point I am coming to is that we do have a substantial number of appeals going to the Circuit Court, and a substantial number of appeals arising at every point in the whole system which means that it gets quite clogged up and leads to the large amounts of assessments apparently outstanding.
Deputy Colley has really got to the nub of it. Perhaps the Minister, later on, could give for the latest year for which information is available how many cases were actually heard on appeal in the Circuit Court, last year and the previous year, which would be more relevant and when we would get a better picture. I presume that information would be available.
I can get that information for the Deputy but it does not take away from the fact that we do have a very substantial number of appeal cases both before the appeal commissioners and in the Circuit Court, many of them representing cases where there are long delays between the first assessment for tax and a final determination of the amount of tax due.
For those reasons generally I oppose these amendments. The changes that this section would bring about in the system will speed up the appeals process while retaining the essential right of the taxpayer to an appeal. I might make the point that we are asking the taxpayer to co-operate in speeding up this process because the appeals system will continue to operate on the basis that the taxpayer himself provided information that was required in order to enable an appeal to be determined. That is a perfectly reasonable request to make of a taxpayer. After all, there are two parties involved who need to be satisfied. One is the taxpayer himself who, like the rest of us, does not want to pay any more tax than he is liable for. On the other hand, we have the Revenue Commissioners who want to collect the amount of tax that is due on foot of the existing provisions. Therefore, there is an effort to be made on both sides. That is what is built into this section. If safeguards the continued right of the taxpayer to make appeals, in reasonable conditions, on the condition that he provides the kind of information necessary in order to enable an appeal to be determined.
I am not sure if there are other specific questions I have skipped over in replying. A question was raised as to what is the delay between an application for a late appeal and a decision on whether or not to allow it. In the normal case the appeal commissioners would give a decision fairly quickly, within a matter of days or, at most, weeks. It is not the kind of decision requiring a prolonged delay on the part of the appeal commissioners to make up their minds whether or not a late appeal would be granted.
The final point I might make on this is that, in putting forward this section of the Bill, it has been my concern to ensure that our tax system can work more effectively and safeguard the right of appeal of the taxpayer. A concern with making the system work more effectively is something which is not dictated only by a consideration of how much we will collect, or a consideration of the desirability of collecting the total amount that should be collected. There is also an advantage for the taxpayer in having clarity in the system, in having the procedures he may use clearly set out, in having the requirements that he must fulfil in order to use those procedures clearly set out also. There are quite a number of Deputies here who get involved in one way or another with the tax collection procedures, not personally directly, but in a different capacity. They would all agree, I think, that in the operation of the system the tax inspectors and indeed the appeal commissioners, on the whole, display a degree of contact with reality we would always expect an administration to show. It is not always the case — and perhaps this is part of our problem — that they would stick rigidly to the requirements of the system, as laid down in statutes, in deciding whether or not an appeal would be accepted and when it would be heard. That is not the case and neither do I think it would always be the case in the future. Our system is administered with a degree of humanity which of course gives rise to cases where people feel rather hard done by because humanity has its good sides and more difficult sides. I know Deputy Mac Giolla has one particular kind of circumstances in mind when he said that the opposite applies also.
The Minister should let us know where the gin and tonic facilities are to be found.
I must say I have never myself come across a case of a taxpayer being greeted with a gin and tonic by his tax inspector or by a Revenue Commissioner in the hearing of his case.
For those reasons I oppose the amendments put forward and commend the section to the House. I should conclude by saying that that, of course, is not the absolute end of the matter. As I said earlier, in response to something said by Deputy Haughey, we do need constantly to look at the operation of our system. I would not think that any Finance Bill in any given year would necessarily represent the final word on the system itself, or on any part of it. Indeed I referred to some other concerns of mine in that connection yesterday. I think they would apply just as much to the appeals procedure as to the rules on the basis of which we calculate the amount of tax actually due.
While it may be true that any particular Finance Bill is not the end of the line, that perhaps each succeeding Finance Bill introduces new amendments to existing legislation, if this section is enacted in this form it will lay a base for something entirely new and entirely different from anything we know already and it may not be possible for some time to repair the damage that may be done as a consequence. That is why we must spend so much time on it now.
The Minister felt he had dealt with most of the points raised and since so many points were raised on various issues it is perhaps understandable that he may have forgotten some of them. I would refer him to the points covered in our amendments and to two points on which I would lay great stress which the figures given in his reply support rather than reject. The appellant is being required to pay the amount of the assessment plus interest before consideration can be given to the appeal.
A late appeal.
I made that point at some length. It has been reinforced by the practical example given by Deputy O'Dea and by the very information given by the Minister as to the difference between the amount assessed and the amount due, a factor of a fraction of one-tenth of the amount assessed being actually due. Does the Minister think it is reasonable to insist on maintaining the provisions being introduced without taking account of that obvious inequity? He did not deal with it in his reply. It is a point which is underlined by the figures the Minister gave. He has given us a breakdown of the position as of the 31 December 1982 and of what is called "outstanding tax" which is what gave rise to the original fire and fury——
In one particular category.
It does not matter which category. Even though I have made the point myself so often, I have never heard it so well expressed as by Deputy Mitchell and henceforth I hope the Minister will not confine his criticism to me. He said that the information given by the Minister was incorrect, although not deliberately so, and was the main cause of the whip-up of protest outside this House regarding the amounts outstanding.
The Minister has told us that on 31 December 1982 of the amount outstanding 60 per cent was under appeal, 5 per cent awaiting demand, for which the appellant is not to blame, 20 per cent was under demand and 2.5 per cent was arrears. Of all the amount outstanding only 10 per cent is under enforcement and would not be open to appeal.
It can still be open to appeal.
The whole of the amount outstanding notionally could be under appeal. That strengthens my case, certainly in respect of the 90 per cent either under demand, awaiting demand, under appeal or even after an appeal under enforcement. In the light of all that, the Minister is still adamant in his insistence that before the right to appeal in the circumstances envisaged here is granted we will have to have payment of the full amount of the assessment.
Before a late appeal.
I said in the circumstances envisaged here. We are talking about late appeals; that is accepted. There would be payment of the full amount of the assessment plus the interest due since the assessment date. Does the Minister really think that is just, fair and equitable? Do The Workers' Party think it is just, fair and equitable? If so, let them be heard. Once the assessment is made by the commissioner or the inspector and there is a late appeal the State can do no wrong and the assessment must be paid in full plus interest. Let it be known that is what The Workers' Party stand for, although they appear to be supporting the rights of the individual against the State. All the talk about gins and tonics for the wealthy will not help this debate. It is the old argumentum ad hominem, the pleading to emotion, which does not do much to support the case of The Workers' Party.
If it is sauce for the goose, why not sauce for the gander? If it appears at the end of the day that there was an over-assessment and that the appellant had been required to pay much more than is finally determined to be due, plus interest, is there any reason why this should not apply equally on the other side of the scale? Is there any reason why the Revenue Commissioners who have had the use of the money should not be required to repay the interest? Would the Minister like to explain the principle in equity which justifies that? Is it that equity only favours the Establishment, the big as against the small? Are those fundamental facts to be ignored in what the Minister would like to pretend is another important stage in dealing with evasion? Of course we are as concerned as anyone to deal with evasion.
Those points cannot be ignored and perhaps this section is the one on which we will best discharge our responsibilities. We can argue afterwards about the 1 per cent levy and make cases on a whole range of topics but we are dealing here with a very fundamental matter. I acknowledge that we are talking about late appeals but I would like to hear why the penalty applies one way and not the other. Those are two fundamental elements in the case we made on our amendments and the Minister ignored them in his reply. I had presumed that something as fundamental as this would have been brought to the attention of the Minister much earlier.
Deputy Colley asked a very pertinent question in relation to the number of appeals. When we are dealing with this vexed question of late appeals and rights of appeal to the Circuit Court, I protest that the Minister has not obtained from his advisers the precise number of Circuit Court appeals in the latest year for which information is available. Whether it was last year or the year before it would be very relevant to this debate to have that figure. I cannot imagine how the advisers, with all the facilities available to them, do not know. Whether they thought of giving it to the Minister before this point, they must know. If they do not know they should know how many appeals there were to the Circuit Court in 1982 or 1981 or whatever it was.
I do not think the Deputy should criticise the Minister's advisers.
I am criticising the Minister for not inquiring.
The Deputy should not criticise the Minister's advisers because in doing so he is criticising civil servants and the established principle here is that we do not criticise civil servants.
I am criticising the Minister for not ensuring that what his advisers must have available to them was not made available to him. I am entitled to do that.
The Minister must take responsibility. The Deputy is fully entitled to criticise the Minister.
I am saying that his advisers will have it available to them and the Minister should have insisted on having the information. It is not enough tomorrow morning when we have gone on to another section to find that we did have a certain number of appeals. As one who practised in the Circuit Court the figure that the Minister gave here this evening really knocked me over. I attended the Circuit Court for years on end and I saw the way these appeals were dealt with in camera and I know they were dealt with on the morning of the Circuit Court. The productivity ratio of a Circuit Court judge is higher than anything I or my colleagues ever appreciated, if there were anything up to 60,000 of them under appeal at a particular time. A figure like that trotted out here does nothing to deal with the reality we are trying to cope with. I insist that the Minister should get the precise figures so that we know where we stand.
The Minister makes the point that we are just dealing with points of law. The Minister will have heard of what are called mixed points of law or points of law in fact. They do not always distinguish themselves as conveniently as that in terms of a nice cosy little argument before the High Court or the Supreme Court purely on facts because it must relate in many cases to the fact that the assessment, whether that assessment and the amount of it could possibly arise under this or that section, will be necessary in some cases. It would tie the hands of the High Court and the Supreme Court completely if you were to tell them: "You are only engaged here in telling us what is the meaning of that section of that Act". It would be a nice academic dissertation but the Supreme Court and the High Court do not work that way. They are there to vindicate the right of the citizen or to establish the right between citizens and the establishment, and they will not, properly, allow themselves to be blindfolded by saying: "In those circumstances can we have information on the facts, not on the merits of the case as to whether or not the appeals commissioner dealt with the amount correctly?". In many cases they will want to know roughly the amounts involved, they will need to know at least the nature of the business involved and they will need to know why it is under that business it is claimed that certain liabilities arise. In the course of that, matters could emerge that could be damaging or prejudicial to the trading or professional interest of the appellant. The Minister is proposing to delete that provision from cases stated in the High Court where it does exist with appeal commissioners. The Circuit Court has it for a very good reason but when it comes to the High Court and the Supreme Court the Minister is going to tell them that this will be held openly.
The Minister has perhaps made one point in support of his case and that is that of course there will be a lively interest in the judgments of these cases as they affect other cases. He must know that many cases heard in camera are reported in the law reports without giving the names of the people concerned. They are there for all the experts to consult. The case that the Minister makes that hearing it in camera would mean that it could not be reported for the professional people who would be involved and interested falls because the precedent is there to demonstrate that you can have hearings in camera and still have them recorded.
We ask the Minister in relation to the appeals commissioners at least to allow them discretion in determining whether or not they should dismiss the appeal. He did not reply to that. The provisions here make it mandatory that they shall make an order dismissing the appeal. If they are people of high standing and qualification why is the Minister tying their hands? We are not asking too much considering that appeals commissioners are people of experience and qualifications. I do not know how many Circuit Court judges there are — perhaps 12 — and we have three appeals commissioners. This will increase the load on them. We will certainly need more appeals commissioners. Otherwise the whole system will clog up. The Circuit Court judges will be greatly impressed by the figure given in respect of them this evening. I am sure they will return to the Minister by the back door looking for an increase in their allowances or their salaries as a consequence of this burden of work and it is only a small element of their total work. We will need more than three appeals commissioners and we will need to ensure that they will be people of the kind of standing, experience, qualifications and judgement that will fit them fully for this office. Judges have that and have such a role in our Constitution that we have a right here in certain circumstances to deal with judges if certain circumstances arise. We will need more appeals commissioners and also to ensure that they will be sufficiently experienced, qualified and balanced in their judgment to deal with the cases that come before them.
I should like to support Deputy Mitchell in what he said about the tendency that has arisen for representatives of unions in the public service, particularly in this area, to go public with the implication that they have knowledge that no one else has. I doubt that they do have that knowledge. Some of those who go public would probably not be allowed within the structure of the revenue commissioners to have access to that level of knowledge. In many cases the people who are ready to go public are at a lower level of authority within the structure than inspector of taxes who would probably have that knowledge. Because they represent unions within the public service they can disclose things for what can be acknowledged to be political reasons, sometimes to create a certain amount of confusion in respect of Members of this House or for party political reasons. Perhaps things have changed a lot since I was Minister for Finance. It happened then, too, and the person engaged in that type of publication was brought into the office and spent two-and-a-half hours with me there. That is a precedent I could bring to the Minister's attention. As a consequence of that discussion, much of what he had been saying publicly could not be supported by hard evidence and he was warned that he would have to be careful in future when he took that role on himself.
I have heard many arguments from all sides of the House, on this section in particular, and I have a fear that this Minister is creating a unique distinction. He will probably be the first Minister who will go out with a Bill exactly as he came in, apart from his own amendments. I have heard many reasonable arguments but it seems that the Minister, on the basis of the advice given to him, will plough only one furrow and he will stay in that furrow no matter what is argued here, though at least three amendments in my name — that dealing with discretion, the one dealing with assessment plus interest and the alternative obligation on the Revenue Commissioners to do the same, and the amendment dealing with appeals in camera— would not have stretched the Minister's discretion if he had accepted them. It seems that we must go through the process of making our arguments in the knowledge that we will not convince the Minister of anything.
I want to add briefly to what I said earlier. I accept the basic thrust of what the Minister is trying to do but I think the legislation is a bit onesided. I have reservations because the consumer, the taxpayer, has had no input whatsoever. It does not mean that there will be additional tax cases for the Circuit Court. It will mean that there will be fewer, because the procedure will become much more autocratic with people being asked to pay bills whether they owe them or not, and in many cases they will not be able to afford to appeal.
I want to make a few general comments. Deputy Mac Giolla said that there are too few in the tax office. My belief is that there are too many. One can ask any worker who has occasion to visit the tax office and he will confirm that. As somebody who represents a big PAYE constituency, I do not agree that my people do not consider there are too many people in the tax office. In any given year taxpayers can get balancing statements, P45s and perhaps amended P45s, perhaps two P60s if they happen to have pensions, assesment forms, appeal forms, tax free allowance forms. Part A and Part B, forms 11 and 12. There are a dozen forms that a person can get, but old age pensioners get the most. I know because I deal with many of them in my clinics.
I should like to know from the Minister the number of people in the Schedule B category, mainly PAYE people, involved in tax appeals. I suspect that there are particularly a large number of retired people who unknown to themselves may have income under Schedule D, Cases 3 and 5. Perhaps a lady has a pension and a part-time job as a cleaner. Perhaps because she is a widow she has a lodger, a nurse, staying with her. It often happens in my constituency when people live near hospitals. She thinks that because she is liable for PAYE that she has no other tax liabilities. I wonder what will happen to such people when they are presented with assessments which are incorrect but which they will have to pay.
There are quite a number of people who will be caught by this appeal procedure. I accept that people have been using the system to their own advantage and that steps had to be taken to improve the situation, but I believe we should be careful with this. It is not in the public interest that people with small incomes who have not got the wherewithal should be caught in this position. They are people who cannot afford tax avoidance. Perhaps the Minister would consider an amendment on Report Stage putting a ceiling on the amounts that would be in this machinery. Perhaps certain amounts could be left outside the machinery, particularly involving people who would be liable for PAYE on their main income. They should not be liable to be caught in a trap they could not get out of.
This is called the Committee Stage, but I think it is a pity it is not being dealt with by some form of committee. Though ideologically there might be a big difference between Deputy Mac Giolla and me, I know from working at local authority level that when we were in committees we were able to send for reports. We should be able to do that, particularly on this section of the Bill. In that situation I think Deputy Mac Giolla and I would be able to satisfy ourselves about some of the problems that exist. If we are able to tease out the pros and cons in a genuine way, send away for a report and have the information before making decisions, we could come to an agreeable decision on this section.
Perhaps there are some unnecessary fears, but I am afraid there will be a lot of hardship for people with small incomes purely to facilitate a Revenue service which is inadequate and archaic in its administration and bureaucratic in its approach to taxpayers. Perhaps it is time we looked at the way assessments are made.
I want to deal with only two points. We have been eight hours on section 9 and the two previous sections, none of which deals with the main problems attached to this Bill. Deputy O'Kennedy dealt with the dictatorial methods of dealing with people's assessments and of assessing people for money that may not be due. He said that that is totally undemocratic and dictatorial. He is out of touch with what happens to the PAYE taxpayer. If he does not fill in a form or fills it in incorrectly a penal tax is imposed and the money is deducted from his wages. There is no question whether the money is due or if he is going to appeal——
He has the right of appeal.
——the penal tax is imposed and the money is taken from his pay packet. After filling in the necessary forms or going through the appeals, after six or eight months the overpayment is refunded but he does not get any interest. If it is found that these people have overpaid, the money is refunded plus interest at 1½ per cent per month. I have heard of two cases where business people overpaid their tax last year because it was the best investment available. The PAYE taxpayer has no say in this whatsoever. If this system which Deputy O'Kennedy objects to is dictatorial, how much more dictatorial and undemocratic is the deduction of taxes from a person's wages before he gets it into his hand? There is no comparison between the tax paying and tax deduction systems and this system.
The Minister is endeavouring to get a tighter grip on the appeals system. This is where I want to get the truth in this House because this matter has been tossed around this House for the last four or five weeks. In reply to a question by Deputy De Rossa and Deputy R. Bruton, the Minister gave detailed information, which is available in tabular form in the Official Report, from which it appears that while there was approximately £1,500 million estimated to be outstanding, when appeals were taken into account there was still £500 million due. Deputy R. Bruton and I mentioned this in this House. A few weeks later there were demonstrations in Dublin which, Deputies said, were the result of this information given by the Minister. Deputy O'Kennedy said on a number of occasions that the Minister was responsible for giving this information which inflamed people to march. Then there was a debate in this House on the tax system and the Minister spent most of his speech playing down this information about this crock of gold. He said it did not really exist and that only £80 million or £90 million was properly due. That figure is still being tossed around by Fianna Fáil Deputies.
I want the exact truth from the Minister. This is the time to give this information but the Minister refuses to give a figure. He gives percentages but nobody can understand them. He gave a percentage of 60 per cent under appeal. Does that mean under appeal through the courts? He said there were 5 per cent awaiting demand. What does "demand" mean? The next figure is 20 per cent under demand. Is that 20 per cent under demand before appeal or under demand after appeal? Has that 20 per cent already gone through an appeals procedure and payment is now being demanded? Is the next 10 per cent the number of those who have gone through this demand, still refuse to pay and are now under enforcement? If my interpretation is true it means 32½ per cent, one-third, have gone through an appeal and are either under enforcement, which means court summonses, sheriff's orders or whatever, and 20 per cent under demand but not yet under enforcement. If the figure of the total estimated amount outstanding is £1,500 million — and I ask the Minister to confirm it — then one-third would be £500 million and the Minister's reply of six weeks ago is confirmed.
If Deputy O'Kennedy's interpretation of the figure is correct, how did the Minister give such false information six weeks ago? Deputy O'Kennedy's interpretation says that 10 per cent is under enforcement and the remainder is either under appeal or about to go under appeal. The Minister says that even that 10 per cent under enforcement could still be appealed. Where do we stand? Will we ever hear the truth? We must learn the truth. The Minister can tell us tonight exactly what the position is. How much does he estimate is outstanding? Is it £1,500 million? How much of that has gone through the appeals system? How much of that money have people been asked to pay and refused? Are they being brought to court? In other words, what is the total amount actually due but cannot be collected?
We have discussed the section on appeals and court procedures since 3.30 p.m. today — we discussed the tax bands for about one hour — and it is now after 11 p.m. Even after those eight hours we still do not have that vital information which everybody is looking for. What is the truth? Where is the truth? If the figure is only 10 per cent, where did the £500 million figure come from? Could the Minister explain precisely what "under demand", "under enforcement" and "awaiting demand" mean?
Deputy O'Kennedy raised the question of the difference between amounts assessed and amounts due in connection with the requirement of the section where a late appeal was to be accepted and the assessment would have to be paid before the appeal would be admitted.
There are a number of reasons why there would be a considerable difference between the amount of tax assessed and the amount actually due. This is part of the wider problem to which Deputy Mac Giolla has just been referring. This difference arises because the tax inspector does not know a great deal about the taxpayer in question. The difference can be caused by a substantial change in the income position of that taxpayer since the last tax year — for example, because that taxpayer has had either a substantial increase or a substantial reduction in his or her income. Each of those circumstances gives rise to a particular difference one way or the other in assessing a person for tax. This is much more a difficulty in relation to the self-employed who fall to be assessed in that manner than in the case of the regular PAYE payer. That is one of the reasons it is important, in order to operate the system effectively, that taxpayers should as far as possible produce the kind of information about which we are talking in this section. It is in the interests of the taxpayer himself or herself and of revenue collection that that information should be produced. That is one of the reasons this section is written in the particular way in which it is.
Deputy O'Kennedy raised the question of interest on overpayment of tax. It is provided in this section that an overpayment of tax revealed on the determination of an appeal would be refunded together with any interest included in the overpayment. However, it is provided that interest would not be payable in respect of the period between payment of the tax and the repayment of the overpayment. That is a reasonable approach. The interest paid by the taxpayer in that case is the amount of interest due on the amount of tax for which he or she was assessed.
Deputy O'Kennedy also raised the question of the number of appeals to the Circuit Court. As I said earlier, I have undertaken to provide him soon with the maximum possible information. I must make the point, however, that there is no system of central recording of appeals in the Circuit Court. Also, it is not necessarily the case that every appeal to the court is heard by a judge in that court. The fact that the appeal is made is in itself a cause of delay in the tax collection system and a number of cases are settled at the point when the appeal is listed for hearing or gets to the court.
The Deputy also made a point, which was adverted to earlier on, about statements made in the media recently by an officer of the Revenue Commissioners. That matter has been taken up in the appropriate quarter and I am not in a position at the moment to say anything more on it.
Deputy Mitchell made one point which struck me particularly, and all of us in this House would have a great deal of sympathy on this point. He spoke about the number of forms which have to be filled in and the different types of forms which a taxpayer may receive during the year. It is one thing to speak about the number of forms and quite another to look at the reasons for the issue of those forms. It is interesting to note that a number of forms to which he referred need not be filled in by the taxpayer, but provide information to the taxpayer as to what his or her tax position is or has been in the year immediately preceding. Nevertheless, they are forms which are made necessary by the operation of our system. I said earlier on, and Deputy Haughey referred to the same point, that we have built up an accretion of pieces in our tax system, some of which give rise to forms and some of which give rise to the need for more forms. We need to examine that position. It is a wider question than the section with which we are dealing at the moment.
Deputy Mitchell also adverted to those who are being asked to pay tax bills whether they are owed or not. This is not exactly the position. There are people in various professions who are assessed for tax and numbers are assessed for tax which turns out not to be due. There are various reasons for that, some of which I have explained. People in that situation then have the means of showing to what extent their assessment is exaggerated and of giving evidence to support their contention that they do not owe so much tax. Again, the procedure which we have set up in this section preserves the availability to that taxpayer to show that. In addition, it asks the taxpayer to do it within a reasonable length of time and in a fairly complete form. It is in the interests of the taxpayer and the revenue collection system that this information should be made available.
Deputy O'Kennedy raised the question, under his amendment No. 20, of making the power of the appeal commissioners to dismiss an appeal against them discretionary rather than mandatory in the circumstances with which we are dealing in this section. The particular part of the section in question provides that where no application for an adjournment is made by an appellant before or during the appeal hearing or where such application is made and refused by the appeals commissioners and the applicant has not completed his return of income and furnished the other documentation necessary to enable the appeal to be determined, the commissioners shall dismiss the appeal.
A close reading of the text will show that a number of safeguards are built into this system. There are two conditions that must be fulfilled before the appeals commissioners would be obliged by this section to dismiss the appeal. The first is that no application for an adjournment of the appeal should have been made or if such an application has been made that it was refused. Invariably a refusal in these circumstances would have been preceded by a number of adjournments of the appeal.
It is provided also that an application for an adjournment may not be refused before nine months have elapsed either from the date of the assessment or from the end of the year of the assessment, whichever is the earlier. In normal circumstances this would give the taxpayer enough time to submit a return of income and the required evidence in support of his appeal. All of that comes under the first condition. The second condition that would be satisfied before it would become mandatory for the appeals commissioners to dismiss would be that the return of income for the relevant year of assessment had not been submitted or if it had been submitted that the necessary statement of profits and gains and other evidence relating to the return had not been submitted by the applicant. It is only where these two conditions are fulfilled that it would become obligatory for the appeals commissioners to make an order dismissing the appeal.
These provisions do not take away from the appeals commissioners their discretion in relation to the granting of an adjournment or of a number of adjournments before they reach the point where the appeal would be dismissed. Therefore, taking all these matters into consideration, there are a number of safeguards retained in the system before the point would be reached where the appeal would be dismissed, before we reached the point where we restrict the further operation of the appeals system. Those are all safeguards which allow the taxpayer the opportunity of making his case, of showing his situation within a reasonable time. It is for that reason that I would keep to the provisions as set out in the Bill as a means of tightening up the appeals procedure to the point where, without damaging the right of the taxpayer to appeal, we would avoid the kind of replication of appeals and adjournments that now cause so many delays in the operation of the system.
Once this is included, the appeals commissioners will no longer be appeals commissioners.
They will. They will have a degree of latitude in the granting of adjournments and in the assessment of appeals. They still have all the latitude required in the event that the information is provided beforehand by the taxpayer.
They will have no discretion.
Deputy Mac Giolla raised again the subject matter of questions that have been dealt with in the House. They are somewhat outside the scope of the section but I would make the point that some of the questions he raised cannot be answered finally until we have received tax from the taxpayers in question because, as I said when I adverted first to that information, at all of the stages I mentioned — the appeal or inquiry stage, the stage of awaiting demand where an appeal has been determined and so on — appeals are possible. Therefore, it is not until a cheque has been paid over to the Revenue Commissioners that it becomes possible to say with any precision how much of any assessment is due and payable. That is an area of imposition that arises directly from some of the characteristics of the system and which we are attempting to deal with in proposing this section.
I should like to point out that we are still only at section 9 and due to finish this part of the Bill by 11.30 a.m. tomorrow.
That is why I was hoping to bring this part to a conclusion.
Perhaps the Whips should reconsider that deadline because there are some very fundamental sections remaining to be dealt with and only one hour available tomorrow morning to deal with them.
The only way that can be dealt with is by way of order of the House tomorrow morning.
If an assessment is made eight months and three weeks after the end of the year of assessment, how long has the taxpayer got in which to appeal? Is it one week?
That is in the nature of a hypothetical question because in most cases the assessments would be made during the year of assessment. The second point is that in a case like that the taxpayer has 30 days in which to appeal the assessment, 30 days in which to say whether he disagrees with the assessment. Once that procedure has been started his right of appeal through the system, and which is retained in this provision, is available to him.
Therefore, the taxpayer would have 30 days plus the provision here of nine months.
Yes.
Question: "That the words proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 18:
In page 14, line 28, to delete "other".
Question: "That the word proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 19:
In page 14, line 29, to delete "evidence".
Question: "That the word proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 20:
In page 14, line 33, (a) (i) (I) to delete "shall" and substitute "may".
Question: "That the word proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 21:
In page 14, line 39, after "given:" to insert the following proviso:
"Provided, however that if within a period of 28 days of the making of such an order the returns and the statements of profits and gains and schedules, as requested by the inspector, relating to such returns are submitted to the Appeal Commissioners the appeal shall be deemed to have been adjourned for a period of 29 days from the date of the hearing and paragraph C of this sub-section shall not otherwise apply."
Question: "That the amendment be made" put and declared lost.
Amendment No. 22 not moved.
I move amendment No. 23;
In page 15, to delete lines 17 to 22.
Question: "That the words proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 24:
In page 15, to delete lines 47 to 54.
Question: "That the words proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 25:
In page 17, lines 3 to 8, to delete sub-paragraph (i) and (ii), and substitute the following:
"(i) in section 416 (10) after `desires' in line 37, to insert the following words `and establishes to the satisfaction of the Court that a public hearing would be damaging to the appellant in his trade, business or credit.' ".
Question: "That the words proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 26:
In page 17, paragraph (9) (iii) (I) to delete lines 3 to 7, and substitute the following:
"(i) in section 416, by the deletion of subsection (10), and"
Question: "That the words proposed to be deleted stand part of the Bill" put and declared carried.
Amendment declared lost.
I move amendment No. 27:
In page 17, to delete lines 43 and 44.
Question: "That the words proposed to be deleted stand part of the Bill", put and declared carried.
Amendment declared lost.
Question proposed: "That section 9 stand part of the Bill."
We have spent long enough, perhaps too long, on this section. I do not propose to debate the section but, in view of the fact that the Minister has met none of us on any point put forward, we now propose to oppose the section and to vote against it.
Question put.
The Committee divided: Tá, 78; Níl, 66.
Tá
- Allen, Bernard.
- Barnes, Monica.
- Barrett, Seán.
- Barry, Myra.
- Barry, Peter.
- Bruton, Richard.
- Burke, Liam.
- Carey, Donal.
- Collins, Edward.
- Conlon, John F.
- Connaughton, Paul.
- Coogan, Fintan.
- Cooney, Patrick Mark.
- Cosgrave, Liam T.
- Cosgrave, Michael Joe.
- Coveney, Hugh.
- Creed, Donal.
- Crotty, Kieran.
- Crowley, Frank.
- D'Arcy, Michael.
- De Rossa, Proinsias.
- Desmond, Eileen.
- Donnellan, John.
- Dowling, Dick.
- Doyle, Avril.
- Doyle, Joe.
- Dukes, Alan.
- Durkan, Bernard J.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Oliver J.
- Gregory-Independent, Tony.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Hussey, Gemma.
- Kavanagh, Liam.
- Begley, Michael.
- Bermingham, Joe.
- Birmingham, George Martin.
- Boland, John.
- Bruton, John.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- McCartin, Joe.
- McGahon, Brendan.
- McGinley, Dinny.
- Mac Giolla, Tomás.
- McLoughlin, Frank.
- Manning, Maurice.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Naughten, Liam.
- Nealon, Ted.
- Noonan, Michael. (Limerick East).
- O'Brien, Fergus.
- O'Brien, Willie.
- O'Donnell, Tom.
- O'Sullivan, Toddy.
- O'Toole, Paddy.
- Owen, Nora.
- Pattison, Séamus.
- Prendergast, Frank.
- Quinn, Ruairí.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick Joseph.
- Skelly, Liam.
- Skelly, Liam.
- Spring, Dick.
- Taylor-Quinn, Madeline.
- Timmins, Godfrey.
- Treacy, Seán.
- Yates, Ivan.
Níl
- Ahern, Bertie.
- Ahern, Michael.
- Andrews, Niall.
- Aylward, Liam.
- Barrett, Michael.
- Barrett, Sylvester.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Mattie.
- Brennan, Paudge.
- Brennan, Séamus.
- Browne, John.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Calleary, Seán.
- Colley, George.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Cathal Seán.
- Cowen, Bernard.
- Daly, Brendan.
- Doherty, Seán.
- Fahey, Francis.
- Fahey, Jackie.
- Faulkner, Pádraig.
- Fitzgerald, Gene.
- Fitzgerald, Liam Joseph.
- Ormonde, Donal.
- O'Rourke, Mary.
- Power, Paddy.
- Treacy, Noel.
- Tunney, Jim.
- Fitzsimons, Jim.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat Cope.
- Geoghegan-Quinn, Máire.
- Harney, Mary.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Kirk, Séamus.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- McCarthy, Seán.
- McCreevy, Charlie.
- McEllistrim, Tom.
- MacSharry, Ray.
- Molloy, Robert.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J.
- (Limerick West)
- O'Dea, William.
- O'Hanlon, Rory.
- O'Keeffe, Edmond.
- O'Kennedy, Michael.
- O'Leary, John.
- Walsh, Joe.
- Wilson, John P.
- Woods, Michael.
- Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Quinn; Níl, Deputies B. Ahern and V. Brady.
Question declared carried.
SECTION 10.
Question proposed: "That section 10 stand part of the Bill".
This is the section in which the Minister proposes to reduce the mortgage allowance from the existing figure in respect of a married couple of £4,800 to £4,000. I will be very brief on this because the points we would make have been made on many of the other sections. We must take account of the obligations faced by young married couples in the early years of marriage. The Minister for the Environment is here and he will be very conscious of another aspect, that is, the incentive to the building industry. This Government say they are determined to encourage and promote the building industry but this change will have the opposite effect. We want to encourage young married couples not to be a burden on the State in terms of the overloaded local authority housing lists but to provide their own housing.
The existing provision of £4,800 mortgage interest relief would cover a mortgage of about £32,000. Much has been said about the high cost of housing in our cities and towns and anyone purchasing a house costing £32,000 will not be living in palatial splendour. The Minister proposes to reduce the figure to £4,000. which represents the interest payable on the purchase of a house worth about £26,000 and one would travel a long way to find accommodation at that price suitable for a married couple with a young family. The Minister's action is niggardly and in many ways anti-social and it is certainly anti-employment. The Minister of State at the Department of the Environment is here and he is also concerned about the building industry, at least in his public statements.
He purports to be concerned.
Unlike the Deputy, I derived my living from that industry at one stage and I understand it a little better.
It is just as well that the Minister is receiving full pay from the State because he would not now derive much living from the building industry.
It is just as well that I am now in a position to undo the untold damage done by the Deputy and his colleagues to that industry over many years.
(Interruptions.)
I name the Minister of State at the Department of the Environment for being disorderly.
It is quite clear that despite all those protestations of interest in the building industry and despite their concern for young married couples and for employment this provision will ensure a move in the wrong direction. From the point of view of the Government words are more important than actions but the contrary is our view. We cannot understand why in this climate the Minister proposes to reduce rather than increase the mortgage interest allowance against tax. No doubt the Minister in this as in everything else has one answer — that decisions of this kind must be taken to ensure that tax revenue is on target. We have indicated already that he will have an excess in some areas.
The provisions of this Bill give effect to the measures announced in the budget statement on 9 February last. Those provisions were drawn up after careful consideration, although as I have said on a number of occasions I would have wished for a greater amount of time to consider those matters. Nevertheless they were drawn up after the most careful possible consideration and they represent what the Government believe to be the appropriate and most feasible mix of policies to respond to the situation in which we find ourselves. I will not expound on that situation or how we got there because Deputy O'Kennedy seems to be rather sensitive on that point and I would not like to run the risk of being ruled out of order because it is one subject on which I can get rather carried away.
The Minister is a very emotional man.
So there is emotion there somewhere. It is reassuring.
If Deputy O'Kennedy forms his opinions as he seems to do much of the time simply on what he reads in the newspapers, I do not think he can expect to be taken too seriously when he voices those opinions.
(Interruptions.)
It is not condescending. The Deputy is inviting remarks like that.
I do not need any newspaper commentator. I can form my opinions from my own observations.
I yield a bit to the weakness because the reaction is good from the other side. Deputy O'Kennedy is not doing any great favour to himself or the building industry when he makes the point about the building industry in the way he has just made it. I do not know whether he really believes it or not but he appears to join that group of people who seem to believe that if we get the building industry right the economy will be right, whereas in fact the causation is the other way around. When the economy is right the building industry will be right, as will many other industries. When the economy begins to recover one of the first sectors to show signs of recovery is the building industry, to the point where in this and other countries the detection of a pick-up in the building industry is one of the first signs that an economy is turning around.
Progress reported: Committee to sit again.
Will Deputies who are leaving the House, please leave? There is a question on the Adjournment.