This is a recommitted amendment. Deputy Doyle was in possession.
Private Members' Business. - Finance Bill, 1989: Report Stage (Resumed) and Fifth Stage.
Debate resumed on amendment No. 13:
In page 48, between lines 34 and 35, to insert the following:
"41.—(1) Without prejudice to the provisions of section 24 of the Finance Act, 1926, every bookmaker who makes, lays or otherwise enters into any bet, on or after the date of the passing of this Act, shall, at the time at which he receives payment of the amount of such bet from any person, require from such person an additional payment of an amount equal to the amount of the excise duty duly payable on the amount of that bet under subsection (1) (as amended by the Finance Act, 1985) of the said section 24.
(2) A bookmaker shall not accept payment of the amount of any bet unless he receives with that amount the additional payment referred to in subsection (1).
(3) A bookmaker making, laying or otherwise entering into a bet to which subsection (1) relates who—
(a) fails or neglects to require, or purports (expressly or otherwise) not to require, the payment of the additional payment concerned, or
(b) accepts, or purports (expressly or otherwise) to accept, payment of the amount of any bet in contravention of this section,
shall be guilty of an offence under this section and shall be liable on summary conviction thereof to an excise penalty of £1,000.".
I am not sure I was in possession. I probably was speaking at the time.
(Limerick East): The Deputy reported progress.
A long interruption.
In responding to what Deputies have said, I ask the Minister to explain how he plans to enforce the amendment before the House. We are all agreed with what he is trying to achieve to the benefit of the Irish independent bookmaker. The rules of the game should be the same for the English multiples and the Irish independent bookmaker. In the long run the punter should gain, even though there is no doubt that in the short term they will be less than impressed with what we are trying to achieve here today. If the bookmaker no longer has to absorb the tax out of his own margin he should be in a position to give better odds to the punter with the result that the punter would gain in the long run.
In responding I ask the Minister to make particular reference to telephone bets. It is now a very common practice for many people to bet by phone with their local friendly bookmaker. It is hard enough to enforce the present provisions where a person walks off the street into the bookmaker's office, puts the money on the counter and has the option of either paying the tax on the bet or on the winnings, but I am not sure what the Minister has in mind in relation to the keeping of books on telephone bets. Before we broke for Private Members' time facetiously we suggested that if the Minister had a word with his colleague, Deputy Seán Doherty, as to how this might be regularised he might be in a position to advise him, but I am sure the Minister has something specific in mind.
Indeed I have — the very same system that exists at present — test betting. We can test bet on the phone in the same way we can test bet in the office. I can assure the House that Customs and Excise have been extremely successful in recent times in bringing prosecutions in relation to off course betting. Those who follow the racing calendar would know about the big swoop at the major meeting in Tralee last September. There is an ongoing process of test betting.
Having said that, I would like to deal with the practice which has evolved in recent times of a bookmaker offering to bear the cost himself. It is now more widespread than ever. This is generally known as tax free betting. It is offered particularly by the larger chains of bookmakers as an inducement to punters to move their business to bookmakers offering these terms. However, many bookmakers see this practice as an unfair ploy which puts them at a significant competitive disadvantage. This practice is facilitated by the absence from betting duty legislation of an obligation on bookmakers to require punters to pay over to bookmakers at the same time as making payment for the relevant bet an amount equal to the excise duty on the bet. This is now being remedied. The section would also prohibit the advertising of tax free betting. Therefore, we are tackling tax free betting and inserting into legislation a provision that would make it illegal for bookmakers to carry on like that.
Where is the prohibition on advertising?
(Limerick East): Expressly or otherwise.
I refer the Deputy to section 41(3) (a) which reads as follows:
fails or neglects to require, or purports (expressly or otherwise) not to require, the payment of the additional payment concerned,
With respect, this could never be construed as a prohibition on advertising.
Under the present law it is illegal to advertise. That does not need to be tightened up. The fact that the present law is not observed is a different matter. One cannot entice people to bet.
What an allegation to make against the big bookmaker shops who come here and run their businesses totally above board. I would not make such a loose allegation against anybody. The results of all the tests carried out have shown that they are observing the law and paying the duty. I am not prepared to accept that kind of loose allegation against people who run their businesses above board. Having said that, there is illegal activity in the bookie business but it is not at the level Deputy Doyle would like to make it out to be.
We are talking about the betting Act.
I think we should hear the Minister out. If Deputies wish to intervene they may do so later.
The larger bookmaker shops who have come in and acquired sections of the Irish bookmaking business are not being run on a personal basis by anybody. They tend to go the other route in relation to bets. They are being run as ordinary corporate businesses, not for the personal gain of those who run them. They are paying their duty. I have no doubt that they will observe the law. They will be tested the same way as every other bookmaker. I have seen the list of those who have been brought to court and the penalties which were imposed, and I can tell the Deputy that the law is being enforced.
There is not one bookmaker who is observing the betting Act.
I listened attentively to the Deputy when she spoke. Would she now let me finish?
Certainly.
The Deputy should not try to lecture me. I have bet as much in my life as any other Deputy in this House. I know the business. The Deputy should not try to lecture us on aspects she does not understand. Clearly she does not understand what she is saying.
We are talking about the betting Act which I do understand.
Let us conduct this discussion in an orderly fashion.
For the Deputy's information, the betting Act is simple legislation.
It is very old.
Deputy Doyle should desist until she is afforded an opportunity of coming in.
It may be old but it is good legislation. Under the most simple administrative structure £24 million is brought in. The fact that it is old legislation does not mean it is bad legislation, far from it. If parts of it are bad I will take a look at it, but I can tell the Deputy that the legislation places an onus on the bookie to pay his tax. That is a very cheap, simple way of administering it. This new provision would be enforced in the same way as the present legislation is enforced by the Revenue Commissioners. I have little doubt that those who run large offices and offer tax free bets will obey the law, as they have done up to now.
In relation to some of the other queries raised by Deputy Doyle, I never said that giving money to the racing board was irrelevant. It is relevant but there are many other aspects which are also relevant and these need to be tackled. It is not my responsibility to sort out some of the deficiencies in racing. It is not the responsibility of the Minister for Finance to do so, rather it is the responsibility of the racing board and everybody involved in racing. I have no way of correcting them. Having said that, the level of prize money is a major factor but then again so is attendances at meetings. I was present at the Phoenix Park for the Cartier Million — I do not know if the Deputy was present — for which there was only a small field even though one could not get a bigger prize. If one did not include all the invited guests the attendance was small. On the other hand, I could point to a Sunday race meeting at Leopardstown where, because the cost of entry was reduced, the place was packed with families. Market research must be done as to why ordinary people are not attending race meetings but that is a matter for somebody else to deal with. That is what I meant when I said that there were other issues to be dealt with in relation to it.
The Minister and I may have been talking at cross purposes. I accept that when I was interjecting I was out of order. When I referred earlier to not one bookmaker being within the law, I was talking about the general legislation in relation to bookmakers and the Minister referred specifically to betting and the legislation covering that. All the major bookmakers accept that none of them is operating with the law. Small or big, they cannot operate within the legislation covering bookmakers at present and there should not be any argument about that. We should not confuse the issue and perhaps I have contributed to the confusion by my interjections.
We are all trying to arrive at the same point in relation to this and the previous amendment which was neither put to the House nor withdrawn. I am sure Deputy Noonan accepts that the offer of the Minister for Finance to look at the overall situation in the short term — and certainly before next year's budget — is an indication of goodwill towards achieving what we proposed in our amendment. Indeed the Minister will have our support in what he is trying to achieve in the amendment now before the House.
Test betting appears to be the means the Minister feels will be sufficient to enforce this amendment and all the other aspects of the betting Act. We have had difficulty in this area before and evasion of taxation, which this loophole is supposed to close, by any means has been rife in this area. There was an enormous improvement, as we said earlier, when the off course betting tax was reduced from 20 per cent to 10 per cent. Could we tie the two amendments together? I wish to bring the Minister's attention to the fact that my proposal in the previous amendment would be a far easier mechanism of achieving what the Minister is now proposing in that the lowest possible rate of off course betting is the best weapon in his fight against tax evasion. Far more legal betting would be done if the tax was at a realistic level.
I am still not quite sure what method the Minister uses at the moment or how the test betting in relation to telephone calls work. I presume if one rings up as a Customs and Excise official and ask to put on a bet, the bet would not be accepted unless one was a regular customer of that bookmaker and had credit facilities with him. I am quite sure they would not take an over-the-telephone bet from any Joe Smith on the street. Maybe some of them are foolhardy enough to do so but the cleverer bookmakers will only take telephone bets from their regular customers whom they know on a personal basis. Perhaps the Minister feels he has a tighter method of enforcing this legislation than the existing law. I wish him well because we support the intention of the amendment. In the long term, as we said before, it will be in the interest of the punter who should get better odds from bookmakers who will not have to find the tax themselves from their margins. The wording of the amendment in relation to the prohibition of advertising is still unclear. Deputy McDowell also had doubts in this regard. The present legislation forbids the enticement to betting and advertising of any kind is enticement. Therefore, under the present legislation enticement to tax free betting of any kind is illegal or perhaps the expression in section 41 (2) (b) accepts, or purports (expressly or otherwise) to accept payment ... contains an implication in regard to advertising, but it is far from clear. Perhaps the Minister will indicate what section specifically prohibits the advertising of tax free betting, whether it is in this amendment or in the general legislation in relation to bookmakers.
The Minister indicated on the last day we debated the subject that he intended to bring forward this amendment and I welcome it. He will recall that I made representations to him to introduce an amendment regarding off course betting and to make it illegal for the bookmaker to offer tax free betting. I had long negotiations with the previous Minister for Finance, the former Deputy MacSharry, but he could not see his way to introducing such an amendment. I am glad that Deputy Reynolds has taken his courage in his hands in this regard. On course betting it is illegal for the bookmaker to offer tax relief, he must deduct the tax when the bet is made. Many small bookmakers will welcome this amendment in relation to off course betting.
As Deputy Doyle said, a previous Minister for Finance, Deputy Dukes, wisely reduced the off course tax from 20 per cent to 10 per cent which was a great step forward because it reduced the evasion in bookies' offices. Deputy McGahon and I spoke about this and caused an uproar at the time but the reality was that most substantial bets off course were not recorded and no one paid the tax. It is quite evident from the figures the Minister gave last year that in a few years the gross amount of betting in Dublin will yield the same amount of tax. The world of betting is a twilight one and it is appropriate to recall what happened in the state of Nevada. They reduced the tax rate there some years ago from 5 per cent to 2.5 per cent and there was such an increase in betting that they decided to reduce it to 0.5 of 1 per cent which caused betting to quadruple.
I wholeheartedly welcome this amendment because, although some politicians on entering the Dáil lose sight of reality, the Minister is still in touch with the real world. With all due respect to the officials in the Department of Finance I am sure they do not understand racing, unlike the Minister.
Since the tax was reduced from 20 per cent to 10 per cent the big chains of bookmakers have come in here but it is just not possible to offer tax free betting as far as the small bookmaker is concerned. It is no secret that the gross margin on off course betting is about 14 per cent or 15 per cent, depending on how well the operation is run. If you take 10 per cent out of that to pay the punter's tax you are left with nothing. The big chains would do it because 4 per cent of £1 million is better than 12 per cent of £100,000. They could offer tax free betting and squeeze out their competitors. It is not possible for small bookmakers to offer this facility as they are working on very small margins. I do not know whether it is in the long term interest of the punters to have the big bookmakers here but business is business and they are welcome. They have introduced great facilities and so on. However, when they move into a town and want to get rid of a competitor they introduce better facilities and offer tax-free betting. There is no doubt that the small bookmaker would be wiped out. I am in favour of keeping small bookmakers in business because it will keep competition in the market.
We should learn from what happened in Britain. There the big four, Ladbrokes, Corals, Hills and Mecca — Corals have since taken over Hills — wiped out competition. The ordinary punter has very little chance and I speak as one who punts with the major bookmaking chains there.
The difference between the Irish bookmaker and his English counterpart can be explained in a story which I shall relate. Some year ago there was a famous case regarding a horse called Yellow Sam owned by a person who is a friend of mine and of the Minister. The course price was set up in such a way that he was returned at 20/1 with all the money placed off course. Certain things may have been done one way or another but the horse was returned at 20/1 and the off course bookmakers paid out in Ireland. They kicked up holy stink but they paid out. There was a similar case in Britain some years ago regarding a horse called Gay Future which was returned at 10/1 at a course known as Cartmel on a bank holiday Monday. The same technique was used — all the money was off course and none on course — and the man who organised the coup from Ireland — he has since passed to his eternal reward — figured in a subsequent court case in England. Worst still, the British bookmakers neither paid out the money that was won nor refunded the stake. If the bookmakers in England consider that there is price rigging of any kind they will not pay out. The off course market in England is so bad now that the big chains are rigging the prices on the tracks to return low odds in the shops.
If we do not continue to have small bookmakers in Ireland something similar will occur here. The effect of the Minister's amendment will be that the independent bookmaker will have a chance of surviving and his survival is necessary if the ordinary punter is to have a chance. I do not want to see the big chains getting a monopoly, as occurred in the UK where they have control of the system. The punter does not have any chance. If the independent bookmaker continues in business competition will remain in the market and that will be good for trade. I am glad that at last we have a Minister for Finance who lives in the real world and I congratulate him on bringing forward this measure.
(Limerick East): That is another vote for the Bill.
Deputy McCreevy lives in the real world.
This is getting interesting.
In case Members cannot recall I should like to tell them that the main punter who backed Yellow Sam had a bright future and those who backed Gay Future had a very bad future. Yellow Sam, at 20/1 at Bellewstown, gave the owner a marvellous rolling farm in County Westmeath. There again, had the horse broken his leg he would have lost his money and that is something Members forget. It is naive to suggest that a Customs and Excise officer test betting an office, whether it is off course or over the 'phone, would declare himself as a Customs and Excise officer. He would not do that in a million years.
There is no suggestion that he would.
I heard Deputy Doyle suggesting that if a customs officer wanted to open an account or place a bet with a bookie and the bookie knew who he was the law would not be broken. We would never find anybody breaking the law if that was the real world. The trouble about the Deputy is that she does not know what the real world is like. In the real world a Customs and Excise official, looking like an ordinary country punter, places a bet in a bookie's office, goes to the local put and has a few jars with the lads who back on every race and returns to the bookie's office to place another bet. That is done over a period.
Such an official would never open an account and he would not place a bet over the 'phone because he would not have evidence afterwards of the transaction.
We should hear the Minister, without interruption.
If Deputy McCreevy could take the Deputies opposite aside for half an hour and give them an education on how bets are placed they might understand the ways officials can catch bookies. If one knows how the business operates one has a good chance of catching offenders. Deputies opposite have tried to suggest that they do not know how bets are placed. Deputy McDowell admitted that he had not placed a bet in his life and I wonder how he would know anything about betting.
I should like to intervene at this stage.
(Limerick East): We have a gamblers' Government, as the late Deputy Dillon used say.
The Minister may or may not be aware that I have a good deal of experience of the way Customs and Excise officers operate in relation to test betting and subsequent prosecutions and I never heard of a case concerning a telephone bet. I cannot imagine how such a case would be proved in court. One could not prove that one was talking to the right person at the other end of the 'phone.
What have the Deputies been talking about for the last half hour?
The Minister is the person who referred to tests for the phone betting. That will not work and Deputy McDowell has told the Minister so.
The Deputy does not have a clue whether it will work because he never placed a bet in his life. I guarantee the House that it will work.
Deputy McDowell knows how the law operates. The Minister is talking nonsense.
Deputy Doyle does not know what this is all about because she reserves herself to breeding horses. If she accompanied us to the races on an odd occasion she would know what the real world is all about.
The Minister is talking nonsense. He is bluffing his way out of this.
This is becoming very untidy.
I do not have a habit of bluffing. That is something that the Deputy who does not understand horse betting must do. The Deputy is bluffing.
The Minister should try that on somebody else. He is wasting that nonsense and these histrionics on me.
I must insist on an orderly debate.
I am wasting my time in trying to educate Deputy Doyle because she does not want to be educated.
The point I was making before the Minister bolted out of his seat, and induced Deputy Doyle to do likewise, was that one cannot prove test bets over a telephone because one has nothing to show for the transaction after one has placed the bet. I have never heard of a tape recording of a test bet being accepted in court. One could not prove who was at the other end of the telephone line or that the bet had been accepted. There would not be anything in the bookie's office to record its existence; it would be written on the back of a cigarette packet or on a piece of paper in the bookie's pocket. The Minister must accept from me——
I do not and I will tell the Deputy why.
——that unless one taps a bookie's phone line one cannot establish that he is accepting bets. Even if one did tap the line one would have huge difficulties in proving who was making the call.
(Limerick East): It would not be admissable.
Deputy Seán Doherty will explain to the Minister how that works.
We will leave that aspect out of this.
Deputy Doyle is more interested in politics than she is in the amendment and she pours out her heart for the Irish racing industry.
I have seen these cases prosecuted, and I have been involved in them, and I know what one can prove and what one cannot prove. Unless one gets a fool of a bookie to make a statement confessing to what he has done — they are not stupid — one is bunched if one is trying to prove a telephone bet.
I should like to ask Deputy McDowell if, when he was in court, he heard a customs officer swearing a declaration and if that was acceptable to the court or not.
What?
There is a barrister asking, what. Who would have him defend a case?
I challenge the Minister to name one case where a telephone bet was the issue.
Will the Deputy say if that declaration was acceptable?
Test betting in regard to telephone bets is irrelevant. The Minister has explained the position in regard to bets placed over the counter and Deputy McDowell may have defended bookmakers or prosecuted them. There is no doubt that the lower the rate of tax the less evasion there will be.
That is correct.
When the rate was 20 per cent there was an element of evasion like there is when a tax is exorbitantly high. A placed bet is a discretionary expenditure. One must have one's dinner every day but one does not have to place a bet.
It is the same in any case where the rates are too high — how are we going to prove that there is evasion? Just because a person is a bookmaker or a turf accountant does not mean we can automatically assume (a) he is dishonest and (b) he will not pay his taxes in any event. This is the kind of nonsense that goes on in this House, particularly by those from the Left in Irish politics.
The real opposition are not here tonight.
We seem to make the subjective judgment that all self-employed people evade the payment of tax. We believe for example, that doctors, accountants, barristers and farmers are crooks. This makes an interesting commentary on Irish life. The person who says they are crooks is probably paying PAYE but what he is really saying is that if he had a chance to fiddle a few quid he would. A person may not know whether the doctor, accountant or self-employed person next door is evading tax, but he makes the subjective judgement that he is just because he believes that if he was in the same position he would not pay. That is what we are all really saying here ——
The Deputy is straying very far from the subject matter of this amendment. Let us get back to amendment No. 13.
With regard to telephone betting, very often I place bets by telephone, and since the tax rate was reduced to 10 per cent I have paid the tax on this betting. If a shopkeeper or farmer has to keep two sets of books he will get in all kinds of trouble. Not all telephone bets go on the books, but most of them do.
The Deputy is dead right.
I accept that when the tax rate was 20 per cent it was a different kettle of fish. People cannot place credit bets in Ireland; they have to place them outside of the country which, of course, is illegal. Anyone who has been in another country and rang one of the big betting chains to place a bet will know that all telephone bets are recorded in the interests of the bookmaker and the client. Of course, a person would not ring England to place bets like that.
The point I am making is that the test betting system which operates at present is fairly efficient. The tax rates are reasonably low at present and hopefully they will come down. However, no matter what the tax rate is, there will always be a certain amount of evasion — there will be VAT evasion by shopkeepers and income tax evasion by other people. I believe that if we do not make it attractive to evade tax there will be less of it. The test betting procedures which operate at present are adequate.
(Limerick East): I should like to move that the question be now put.
I am assenting to it.
Amendment put and declared carried.
We now proceed to amendment No. 14 in the name of the Minister.
(Limerick East): On a point of order for our guidance, we recommitted amendment No. 13 and we were completing Committee Stage. Does the amendment revert to Report Stage now or will we take Report Stage on this amendment subsequently?
We now revert to Report Stage on amendment No. 14. On amendment No. 14, I observe that amendment No. 15 is an alternative and amendment No. 28 is consequential. I suggest, therefore, that we discuss amendments Nos. 14, 15 and 28 together by agreement. Is that satisfactory?
(Limerick East): On a point of order, what happens to amendment No. 13 which we have agreed in Committee? Will that come back to Report Stage now?
Does the Deputy want to say anything more about it?
(Limerick East): We recommitted it and agreed to it in Committee. Will it revert back to Report Stage now?
Yes, it is in Report Stage now but I presumed the Deputies did not want to discuss it further. Is that so?
(Limerick East): That is accepted.
Amendment reported.
I now proceed to amendment No. 14, and suggest that amendments Nos. 14, 15 and 28 be taken together.
I move amendment No. 14:
In page 55, between lines 28 and 29, to insert the following:
"53.—Section 8 of the Principal Act is hereby amended—
(a) in subsection (3) (inserted by the Act of 1978) by the substitution—
(i) in paragraph (b) (inserted by the Finance Act, 1982) of ‘£15,000' for ‘£12,000' (inserted by the Finance Act, 1983),
(ii) in paragraph (c) (inserted by the Finance (No. 2) Act, 1981) of ‘£32,000' for ‘£25,000' (inserted by the Finance Act, 1983), and
(iii) in paragraph (e) (inserted by the Finance Act, 1984) of ‘£15,000' for ‘£12,000',
(b) in subsection (3A) (inserted by the Finance Act, 1982), by the substitution of ‘£15,000' for ‘£12,000' (inserted by the Finance Act, 1983), and
(c) in subsection (9) (inserted by the Act of 1978), in the defination of ‘farmer' (inserted by the Finance Act, 1982), by the substitution of ‘£15,000' for ‘£12,000' (inserted by the Finance Act, 1983) in each place where it occurs."
This amendment increases the annual turnover thresholds above which traders are obliged to register for VAT purposes. First, the threshold of £25,000 which applies mainly in the case of traders who sell goods will be increased to £32,000 and, second, the threshold of £12,000 which applies in the case of all other traders will be increased to £15,000. The purpose of the amendment is to free additional traders from the burden of complying with VAT registration and accounting requirements. About 1,500 traders should be eligible to cancel their VAT registration as a result of this amendment. The cost involved in small, about £200,000 in 1989 and £500,000 in a full year.
The last time turnover registration thresholds were adjusted was in 1983 when they were reduced respectively from £30,000 to £25,000 and from £15,000 to £12,000. The present increases will do no more than adjust the 1983 threshold levels in line with changes in monetary values since 1983. The amendment takes account of Deputy Noonan's amendments on Committee Stage and this Stage. However, EC VAT law permits increases in turnover registration thresholds only in line with decreases in monetary values. Based on the levels set in 1983 increases in thresholds above the level specified in this amendment are not possible.
I commend the amendment to the House.
(Limerick East): I welcome the Minister's amendment. On Committee Stage I suggested a doubling of all thresholds and on Report Stage I looked for a more moderate increase in thresholds. I suggested that where the threshold was £12,000 it should be increased in all cases to £18,000 and where it was £25,000, that is for the sale of goods, it should be increased to £38,000.
The Minister has met the principle involved here and has moved his amendment to increase the thresholds from £12,000 to £15,000 in all cases with the exception of the sale of goods where he is proposing to increase it from £25,000 to £32,000. I am glad the Minister has pointed out that there is an inhibition on him under EC regulations which confine the raising of the thresholds effectively to indexation, using the existing thresholds as the base year at the time they were introduced. I accept that the Minister has gone as far as he possibly can in this respect, and I welcome this.
I should like the Minister to give an indication of the thresholds for similar activities in other EC countries, for example, in the United Kingdom and possibly in one or two other European countries, if he has that information to hand. In the absence of that precise information I should like him to indicate the range of thresholds in EC partner countries from the highest threshold to the lowest threshold. It seems to me that we are out of line with some of the European countries. We bring people into the VAT net at very low turnover rates and I want to know what the comparative position is in other EC countries.
On Committee Stage I outlined the case very briefly and I think it is worth repeating the basis of the argument. I will take, for example, a self-employed man who has developed a business in hanging curtains and who has worked his business to the extent that his monthly turnover has exceeded £1,000 per month.
Under the old thresholds as soon as his monthly turnover exceeded £1,000 per month he would have to register for VAT and, in those circumstances, would be placed at an immediate disadvantage. Once he has to register for VAT his costs to his clients, most of whom will be housewives, will increase by 25 per cent. This means that in effect what he had sold previously in the course of a year at £12,000 he would now have to sell at £15,000 per annum. Of course, his overall position would be more complicated because, in the curtain-making business, he would have few enough purchases to set off against VAT once he had registered. He would not be trading in curtain materials and, consequently, his major input would be the cost of his own labour. Then he would be faced with the position that most of his competitors would be operating in the black economy anyway. Therefore, legitimising oneself effectively puts one out of business and works counter to employment. The raising of the thresholds does constitute a positive incentive to employment for self-employed persons.
Historically it would have been difficult to do this — the previous Government moved to remove thresholds — because it was not evasion or possible loss of revenue on the VAT side about which they were concerned but rather the consequent loss of revenue on the income tax side. When there was no liability to self-assessment the only reasonable cross-check was the VAT register. Now that there is self-assessment the same rules of self-assessment will apply to the small trader as to anybody else, the same obligations and spot checks will apply. Therefore the necessity, for the sake of cross-matching, to have a trader with a very small turnover register for VAT simply as a method to check his liability to income tax is no longer applicable. It is timely that this move be made.
I am very pleased the Minister has again accepted the spirit of the amendment I tabled. In view of his explanation of EC regulations imposing an inhibition on him, I am not quarrelling with the levels he is introducing here. I withdraw amendment No. 15 in my name and I propose to agree to the Minister's amendment.
In relation to the Minister's raising of the thresholds, I agree with Deputy Noonan, this is a reasonable response to the circumstances prevailing. However, on reflection I am amazed that when we reduced the threshold in 1983 to £12,000 — because of the limitation on subsequent indexation of levels within the EC — we actually prevented ourselves from having a more reasonable limit now, which is somewhat extraordinary. One would have imagined that it having been £15,000 in 1983 we would now have a limit of say, £20,000 or whatever without any bother. However, that is water under the bridge.
The point I should like to raise with the Minister is the question of thresholds as they relate to occasional trading. I have had a number of complaints — I have written to the Minister about them — about occasional traders coming from abroad, operating here and getting licences for occasional trading. These people do not have to register for VAT at all. I will not go into all of the details but a major concern is in the area of fur trading, occasional sales being carried on in hotels here, with the fur traders in question using foreign Access and Visa machines so that the whole operation means trading in Ireland in very strange circumstances. Of course the Irish fur trade were very anxious that the proper declarations of value be made. At the time I wrote to the Minister suggesting that nobody should be allowed to get an occasional trading licence here in certain areas unless they also registered for VAT. I am not talking about grocers at fairs or the like. But, in relation to high value goods there should be an absolute requirement that, for example, if one wants to trade in something like fur coats in Ireland, one must be registered for VAT; there should be a prohibition against such traders operating without having registered for VAT. That is only in the interest of the Irish members of the fur trade. They should not be wiped out by predatory raids on the part of people who can operate apparently with total disregard for the law.
Bearing in mind that the Minister is raising the thresholds, of which I am in favour, I would ask him if he would now take on board the necessity to prevent people from making predatory raids from abroad in high value goods, such as watches and the like. There is huge ease, especially in commodities which are difficult for Customs and Excise officials to value coming in at Dún Laoghaire, such as piles of fur coats, for people to declare incorrectly the value of the goods they are bringing in and re-export those they do not sell, when the Revenue are no wiser one way or the other. If they use Visa and Access machines with English accounts the transactions never show in any shape or form and VAT in Ireland is evaded completely. They are being facilitated by being given occasional trading licences by this State.
I wrote to the Minister about it because the Irish Fur Traders' Association wrote to me really annoyed about the situation. When increasing VAT thresholds I would ask the Minister to bear that in mind, that it is not sufficient. There are some people who, by virtue of the fact that whatever their threshold — because they are exempt for a day's sales of £15,000 in Ireland, and would not have to register for VAT because they are effectively exempt — they can get a licence to trade occasionally and rip off the Irish tax gatherer.
In response to the points raised by Deputy McDowell with regard to traders coming in from abroad, taking in goods and conducting sales, I should say that, first, they are caught for VAT at the point of import. I would accept that there are difficulties encountered with regard to the issuance of occasional trading licences, an issue that I placed under the microscope in the Department of Industry and Commerce before leaving there. It is a difficult area. Customs and Excise officials have a difficult task in trying to keep up with them.
It reminds me of a story told in the midlands about itinerants trading in watches, bringing them in from abroad, that they pay full duty on say, 1,000 watches, have the receipts and documentation available. Yet every time a Customs and Excise official arrived they never had any more than 1,000 watches. They might be selling them from, say, a false bottom in a van or the like. There are difficulties encountered in that area. The question of tightening up on occasional trading licences is one way of confronting the issue but would mean a partial solution only. It is an area that is under review in the Department of Industry and Commerce, the relevant Department.
I should point out that our thresholds are the highest in Europe at present. To give the House some examples, in the United Kingdom they are £27,579 or the equivalent thereof. Thresholds in some other European countries are very low. Heretofore ours stood at £25,000, now they will be £32,000. Those in Greece stand at £4,700, Germany, £7,500, so we are well at the top of the league in any of the examples one might care to take. That is as far as we can go.
With the introduction of self-assessment there is less need for the circumstances that obtained some years ago. With self-assessment, the value of VAT registration for income tax purposes and cross-reference does not exist to the same extent any longer. That is why I have moved as far as I could in that respect. I believe it meets the circumstances and should be acceptable to the House.
Amendment, by leave, withdrawn.
Amendment No. 16 in the name of the Minister. I might add that amendments Nos. 16 and 17 form a composite proposal and amendment No. 18 is an alternative. Therefore, amendments Nos. 16, 17 and 18 can be discussed together by agreement.
(Limerick East): The meaning of amendment No. 16 does not jump immediately off the page. Therefore, on this side of the House we are not sure whether they comprise a compatible group. If the Minister would tell us what is the intent of amendment No. 16 we would be in a position to agree or disagree as the case may be.
I might draw the attention of the House to the fact that amendments Nos. 14, 15 and 28 should have been taken together. Amendment No. 28 is a very technical one.
I might remind the House that while amendments are discussed together the actual questions are not put until such time as they are met in the numerical sequence in which they appear here. While one amendment may be discussed with another, the question will not be put until it is reached in numerical sequence. Amendment No. 28 is the last one tabled.
I want to make sure that the effective date is inserted correctly.
It is agreed that only the Minister can formally move.
I thank you.
Deputy Noonan would like an explanation on amendment No. 16.
I move amendment No. 16:
In page 59, before line 1, to insert the following:
"57.—Section 32 of the Principal Act is hereby amendment in subsection (2A) (inserted by the Act of 1978) by the substitution of ‘, subsection (6) or (7) of section 15 or paragraph (ia) of the Sixth Schedule' for ‘or subsection (6) or (7) of section 15'.".
This is a technical amendment which has the effect of broadening the scope of the reduction in rate from 25 per cent to 10 per cent for certain works of art. It provides that regulations made in relation to the reduction in the rate shall only be made with the consent of the Minister for Finance. Those regulations are drawn up by the Revenue Commissioners. Amendment No. 17 is consequential.
I would ask your indulgence to refer to amendment No. 17 and to indicate that where the word "statutory" appears it should read "statutory". Is that agreed? Agreed. Amendments Nos. 16, 17 and 18 are to be taken together for the purpose of discussion.
In relation to amendment No. 17, I have decided to make a further concession on the reduction in rate from 25 per cent to 10 per cent in respect of works of art. The reduction in rate will now also apply to certain items of furniture, silver, glass or porcelain over 100 years old. It is estimated that the cost will be about £100,000 in 1989 and £200,000 in a full year. In order that a satisfactory level of administrative control can be applied in relation to the reduction in rates for these items, suitable regulations will have to be drafted. This will be done as soon as possible. This amendment takes account of Deputy Noonan's proposed amendments on Committee Stage and indeed, on this Stage also.
Amendment No. 18 is opposed. The relief sought by the Deputy is, by and large, covered in amendment No. 17.
(Limerick East): On Committee Stage I put down an amendment proposing that the Minister would extend the scope of the reduction of the 25 per cent VAT rate to 10 per cent in respect of other articles of craftsmanship. The Minister had confined the original scope of the reduction to original hand executed works of art——
And hand manuscripts.
(Limerick East): ——hand manuscripts, hand paintings, lithographs and so on. The issue was that we could extend the 10 per cent rate and reduce it from the existing 25 per cent in respect of antiques. We were talking first of antique furniture, then of antiques which would be made of silver, glass or porcelain. In an attempt to define what an antique was, we said it would be furniture or anything made of these materials and which would be more than 100 years old. That was the intent of my amendment. So far as I can see the Minister has accepted the spirit of the amendment and incorporated it here in this amendment. This has received a wide welcome in the trade. I am glad the Minister has done this.
A number of issues arise. First, it is the practice, certainly in rural areas, to include miscellaneous items of antique furniture in the auction, say, of the contents of a house. It is also the practice and it is widespread that, rather than selling antiques in an antique shop, to put them into the local parish hall in the course of a general auction of antiques and objects of art. If something is sold at auction a VAT rate applies but not on the value of the article. The VAT applies on the value of the service of the auctioneer, it applies to the auctioneer's commission. It is not 25 per cent of the value of the antique table but it is 5 per cent of that again — it is the commission — or perhaps less because regularly it would be 2½ per cent or 2 per cent. Secondly, antique works, which frequently are works of art, have been spirited out of the country. Irish collectors cannot compete with the differentiation of VAT rates between here and the United Kingdom. Even more than that, if, for example, a particularly significant object appears in Sothebys, or one of the London auction rooms, or wherever, and an Irish collector purchases it and brings it back to Ireland, at the point of importation he is subject to the 25 per cent Irish VAT rate. This is bringing about a situation where very valuable artefacts — not only of cultural and artistic merit but of historic merit — cannot be repatriated without a 25 per cent levy and that is keeping things out of the country. While collectors would obviously, in certain circumstances, purchase such items, there is a tendency to keep them in the country of purchase, which is the UK, rather than repatriate them to Ireland because of the disadvantage. Now it will be possible for items such as those I have in mind to be brought back to Ireland and the VAT imposition will be 10 per cent, not 25 per cent. This is very significant progress and I thank the Minister for listening to the arguments I made on Committee Stage and for bringing in an amendment to cover the points I made.
There is a number of points I would like to raise about the amendment. I notice that the Minister has repeated paragraphs (b) and (c). I thought he had made some change but when I cross-matched it with the section it seems to be a repeat. I am wondering if there is some curiosity in drafting or if there is an actual change that I have missed in paragraphs (b) and (c).
It is just a drafting point.
(Limerick East): Paragraph (d) is the new portion of the section. The Minister intends to control this by regulation. I have no objection to that. It is appropriate that there would be regulations. It would be very difficult to cover all eventualities in the text of the amendment so I do not have any problem with it. An article of furniture, silver, glass or porcelain covers the range of materials I had in mind and whether hand decorated or not covers another point. Antiques of more than 100 years old are quite frequently manufactured goods. The original scope of the Minister's amendment was that everything had to be hand done, hand painted, hand made, etc. Mass produced manufactured goods, especially in the furniture trade, can be very significant antiques. I presume there is nothing in the section nor in the intended regulations the Minister has in mind which would confine this simply to items that are hand made, whether they are furniture, silver, glass or porcelain and which would rule out manufactured items. If manufactured items are ruled out, there is not a lot of concession being given here. In the case of furniture one is talking about furniture which was the highly skilled work of craft shops but certainly not hand made. Frequently there was a manufacturing process. The same is true of porcelain. It would be in a situation where it would neither be a once off nor would it be totally done by hand. I presume the intention here — in the absence of anything else being said — is to allow for that. I also notice that the onus of proof is on the person who is claiming the VAT at 10 per cent. That is right. I do not think it is appropriate that the Revenue Commissioners or the Department of Finance would have to put up a section to authenticate the date of antiques. I have no objection, if people are looking for a concession, that the onus of proof should be on them. As I mentioned on Committee Stage in the case of silver there is no problem because all silver is hallmarked. In other areas, for example, furniture, porcelain and glass any reputable trader is in a position to authenticate age and I presume it will be authentication through the vendor rather than authentication on behalf of the purchaser which will be required. I presume what the Minister intends is that in the regulations there will be some form of certification by the reputable vendor which will indicate or certify that a particular object is more than 100 years old and consequently that the purchaser can claim VAT at 10 per cent, or is it the intent that he will pay at 25 per cent and reclaim the 15 per cent? I should like a comment on the mechanism there.
The first procedure.
(Limerick East): The first one? That is even more satisfactory. I am very pleased with this and have no hesitation in withdrawing amendment No. 18 because the Minister's amendment has covered certainly the intent of amendment No. 18, even though it is slightly more restrictive. I also have no objection to amendment No. 16. As the Minister pointed out, this seems to be technically required as a consequence of amendment No. 17, as amended.
Amendment agreed to.
I move amendment No. 17:
In page 59, to delete lines 39 to 45, and substitute the following:
"(b) an original lithograph, engraving, or print, or any combination thereof, produced directly from lithographic stones, plates or other engraved surfaces, which are executed entirely by hand,
(c) an original sculpture or statutory, excluding mass-produced reproductions and works of craftsmanship of a commercial character, or
(d) subject to and in accordance with regulations, an article of furniture, silver, glass or porcelain, whether hand decorated or not, specified in the said regulations, where it is shown to the satisfaction of the Revenue Commissioners to be more than 100 years old, other than goods specified in subparagraph (a), (b) or (c),".
Amendment agreed to.
Amendment No. 18 not moved.
We now move to amendment No. 19 in the name of the Minister. Amendment No. 20 is an alternative. I propose therefore, that amendments Nos. 19 and 20 be discussed together. Is that agreed? Agreed.
I move amendment No. 19:
In page 64, between lines 19 and 20, to insert the following:
"68.—(1) The First Schedule (as amended by the Finance Act, 1970, and subsequent enactments) to the Stamp Act, 1891, is hereby amended under the heading ‘LEASE'—
(a) by the substitution of the following paragraph for paragraph (1):
‘(1) For any indefinite term or any term not exceeding 35 years:
Of any dwelling-house, part of a dwelling-house, or apartment at a rent not exceeding £6,000 per annum——Exempt',
and
(b) by the deletion of subparagraph (a) of paragraph (2).".
On Committee Stage, I promised to consider favourably exempting from stamp duty leases of residential property where the term of the lease is either indefinite or is less than 35 years and where the annual rent is less than £6,000. New section 68 gives effect to this promise. The First Schedule of the 1891 Stamp Act, as amended by subsequent enactments, lists the instruments which must be stamped with the duty payable. The exemption applies to any dwellinghouse or part of a dwelling or an apartment, which would include a flat. Previously there was a distinction between furnished and unfurnished houses and flats, but this has now been removed. The exemption applies only if the annual rent is less than £6,000 per annum, which is approximately £500 a month. The lease must be for an indefinite term or any term not exceeding 35 years. There is no change in the stamp duty charged on residential leases with annual rent of over £6,000 and where the term exceeds 35 years. Leases on commercial and industrial property are still subject to stamp duty regardless of the annual rent and terms of lease. There will be a small loss of revenue here. On the administrative side there will be savings, as there will no longer be any necessity to stamp short-term residential leases. This takes on board, by and large, the suggestions made by the two Deputies.
(Limerick East): I genuinely welcome amendment No. 19. It is an alternative to amendment No. 20. I will, of course, accept the Minister's amendment and withdraw amendment No. 20. This amendment was not put down for the purpose of giving people a monetary benefit of 1 per cent of their annual rent. The stamp imposition on the lease was 1 per cent of the annual rent so if one were paying £50 a week for a flat in Rathmines one can easily calculate what the 1 per cent would amount to. It is not huge money, anyway.
The point behind it is that one of the main factors with regard to rented accommodation is the lack of security of tenure. Three out of four tenants, I understand, are now on week-to-week tenancies, especially in flats but also in rented houses. Except in the case of formerly controlled tenants, leases of longer than one year are almost never encountered. In cases where a year's lease has expired the lease has lapsed and the tenant remains on a month-to-month tenancy. The limited security offered by the one year lease is lost. Lack of security of tenure makes it difficult for tenants to secure their legal rights. As their right to a quiet and peaceful enjoyment of the home is often affected by this, a complaint from the landlord, for example, or a complaint to the landlord, can often result in a tenant being issued with a notice to quit and having no rights whatsoever.
Short-term letting arrangements offer much flexibility to students and other young people who would not be interested in long-term tenancies. A significant number of people, mainly single people on modest incomes, remain lifelong tenants in the private rented sector. Such tenants are particularly affected by the chronic insecurity of tenure. As they continue to rent privately and become older and their income remains modest, they are in a very insecure position. They may be given notice to quit their flats, typically a week's or a month's notice, and never enjoy the security of a long-term home.
Stamp duty is at 1 per cent and my amendment and that of the Minister exempt short-term leases from that. It is hoped that in so far as the obligation to stamp leases inhibited landlords in the issuing of leases the exemption of leases from stamp duty would mean that leases would be offered more frequently to tenants who would require them.
The level is appropriate, also. Leases of under £6,000 per annum, about £500 a month, are appropriate. I am glad to hear from the Minister that even though there is some small loss of revenue this will be compensated for by savings which will be made on the administrative side. Again, I thank the Minister. Because he does exactly what we requested on Committee Stage, I am withdrawing amendment No. 20, which is an alternative to the Minister's amendment.
I also welcome what the Minister has done. When I put down the amendment proposing something similar on Committee Stage it was done, I must confess, on the representation of the Threshold organisation which wanted me to put down another amendment in relation to another aspect which was disallowed on technical grounds — that was to make section 23 financial concessions, tax concessions, contingent on certain minimum standards of tenure for tenants. There is much merit in that and I would ask the Minister to look into it. It may well be that the tax system, to return to the Commission on Taxation, is not the method of improving landlord and tenant law. It might be better to bring in a full-scale charter for landlords and tenants rather than use the tax system as a carrot-and-stick method of getting them to do what they should do, anyway.
A revenue loss of £.5 million is estimated here but the Minister says that on the other hand there will be compensating administrative savings. That provoked in my mind the questions, what kind of efficiency audit goes on in the whole tax system as to small charges and administrative time used in collecting them? Is there a unit in the Revenue Commissioners Office or in the Department of Finance which examines the use of personnel in specific areas doing detailed work which is not very remunerative in terms of revenue? I know the Minister will say there is an ongoing review. I have never seen a Department which is not in the state of constant ongoing review. Is there a process to evaluate every tax system, to audit, especially in things like stamp duty, the efficiency of the system? It seems that stamp duty is something which is built up by a process of accretion.
Such things as changing the stamp duty in relation to cheques and cheque books can be the subject of a radical amendment to make it much more sensible. Are there many more matters like this which, were it not for Threshold putting pressure on Deputy Noonan and myself to put down amendments, would yield similar type savings on the administrative side? Perhaps the Minister would indicate whether there are not a number of other types of stamp duty which are so little used that it would be better to clear them off the Statute Book completely and change the 1891 Stamp Act so as to simplify matters.
To clarify matters in case there is any misunderstanding, the yield from stamp duty on all leases is £500,000, including residential, commercial and industrial properties, so the amount is tiny. It is 25p each.
That is not 1 per cent.
Evaluating the whole area, it is small bread. I had the same representations made to me by the Threshold organisation but they did not mention — or at least I do not recall their mentioning — the section 23 tax. In any event I do not think that is the way to go. There is an extremely small loss of revenue here. There are compensations on the administration side in relation to evaluation and so on. An added efficiency unit are set up on behalf of the Government to look at specific areas in each Government Department. I have already given them certain areas to evaluate in my Department and I assume other Ministers are doing the same especially in those areas where much administrative time is spent on small stamping duty when you can be fooling yourself thinking you are getting in revenue while it is costing you more to do it. Many other areas have to be evaluated when we get around to doing that. Things have been there for many years which seem to escape notice but unless they are homed in on we will not give the results sought.
Amendment agreed to.
Amendment No. 20 not moved.
I move amendment No. 21:
In page 70, between lines 31 and 32, to insert the following:
"(3) Any person aggrieved by the imposition on him of a surcharge under this section in respect of any asset may, within 30 days of the notification to him of the amount of such surcharge, appeal to the Appeal Commissioners against the imposition of such surcharge on the grounds, and only on the grounds, that, having regard to all the circumstances, there were sufficient grounds on which he might reasonably have based his estimate of the market value of the asset.
(4) The Appeal Commissioners shall hear and determine an appeal to them under subsection (3) as if it were an appeal to them against an assessment to tax, and the provisions of section 52 of the Principal Act relating to an appeal or to the rehearing of an appeal or to the statement of a case for the opinion of the High Court on a point of law shall, with any necessary modifications, apply accordingly.".
This amendment gives the taxpayer a right of appeal to the Appeal Commissioners against the imposition by the Revenue Commissioners of a surcharge arising by reason of the undervaluation of an asset included by him in return for gift tax or inheritance tax purposes. Section 74 of the Bill introduces a surcharge in respect of any substantial undervaluation of an asset which is comprised in a gift or inheritance and is included in a return delivered by an accountable person for capital acquisitions tax purposes.
The surcharge consists of a specific percentage, 30 per cent, 20 per cent or 10 per cent of the tax ultimately attributable to the undervalued asset. To put this surcharge into perspective, I should point out that the real value would have to be one and a half times the submitted value before any surcharge would arise.
On Committee Stage of the Bill, Deputy McDowell made a plea that a taxpayer should be excused from the surcharge if he could establish that he genuinely believed his submitted valuation was correct and his error was a bona fide error. This amendment is a response to that plea. It gives a taxpayer a right of appeal to the Appeal Commissioners against the imposition of a surcharge on the grounds that the taxpayer reasonably believed his submitted valuation was correct. This right of appeal is, of course, in addition to the taxpayer's normal rights of appeal in ascertaining the market value of the property concerned.
Amendment agreed to.
I move amendment No. 22:
In page 73, lines 19 to 21, to delete "unless he has attained the age of 15 years prior to the commencement of the relevant period, and" and substitute "unless—".
Section 78 of the Bill introduces a revised paragraph 9 to Part I of the Second Schedule to the Capital Acquisitions Tax Act, 1976. This revised paragraph 9 sets out the conditions on which a nephew or niece of a disponer is to be treated as the child of the disponer for gift tax or inheritance tax purposes, including the condition that the nephew or niece has to be over 15 years of age all through the relevant five year period. This amendment deletes this age requirement.
A child of a disponer is subject to less onerous gift tax or inheritance tax than a nephew or niece of the disponer. Paragraph 9 of Part I of the Second Schedule to the Capital Acquisitions Tax Act, 1976 provides that a nephew or niece of a disponer is to be treated as a child of the disponer in respect of the gift or inheritance comprising business assets, but only if the nephew or niece has worked substantially on a full time basis for the disponer in the period of five years ending on the date of the gift or inheritance. Section 78 of the Bill introduces a revised paragraph 9 and, while this concession is being retained, it is being extended to gifts and inheritance taken by a nephew or niece on the exploration of a limited interest created by the disponer. At the same time, the opportunity is being given in the context of self-assessment tax to set out for the guidance of a taxpayer the conditions which constitute working substantially on a full time basis. One of these conditions is that the nephew or niece has to be over the age of 15 years at the start of the relevant five year period.
On Committee Stage of the Bill, Deputy Michael Noonan asked me to reconsider this age requirement. I have accepted that it may distort the intention of the uncle or the aunt. Accordingly, this amendment rectifies that position. In other words, the relief is available for nephews and nieces irrespective of their ages at the date the gift or inheritance is being taken by them.
(Limerick East): Again I thank the Minister for his response to the point raised on Committee Stage. A favourite nephew or niece in certain circumstances would be treated as a son or daughter in respect of a gift from a disponer and here we are dealing with the conditions which would have to be complied with in the case of a nephew or niece. I take it that the 15 years of age commencement date is being taken up completely and then it would be a matter of opinion when the five year period of work of appropriate length with the aunt or uncle would arise. For example, I take it that if a child of 12 years of age went to live with an aunt——
The five years must end at the date at which——
(Limerick East): Yes, but it can commence at an early age.
At an early age.
(Limerick East): It is a matter of opinion then at what age the child would be capable of providing the kind of service over the length of hours as specified in the Bill. Therefore, a case could be made that a ten year old who was doing all the messages for a disabled aunt and generally being useful about the place might qualify between the ages of ten and 15. Is that the position?
That is the position.
(Limerick East): That meets the point raised. I do not think the Minister could do it in any other way. To be precise would run counter to the intent.
Amendment agreed to.
I move amendment No. 23:
In page 76, line 25, to delete "consort" and substitute "concert".
This, Sir, is in honour of yourself. I looked at my Oxford English Dictionary today and at Chambers Twentieth Century Dictionary and I have arrived at the view that "consort" used in this context is obsolete and "concert", to act in concert, is the normal modern expression. It is a rarity to find "consort" used in this context. Maybe the Minister has some other explanation, but I have not seen it used in any other Statute passed in this century. I may be wrong in that and doubtless the Minister has a file of 25 precedents where it is commonly used. Certainly my understanding was that it should be "concert" rather than "consort.""Consort" is 17th and 18th century language when used as a noun, apart from "consort" as a spouse, or as a verb, to consort with. "To act in concert" is the more normal usage. Since the Leas-Cheann Comhairle told me he has an interest in words, I thought I should not let the matter go by.
I know I will not disappoint the Deputy when I tell him this section has been passed by the Parliamentary Draftsman and the Attorney General who do not seem to share the Deputy's concern about the word in question.
The meaning intended to be conveyed by the word "consort" is of a group of people acting together to bring about a tax avoidance scheme. It is intended to mean more than mere agreement. In this regard it is used in the same context as "consortium" with which it shares the same root.
Chambers defines "consort" as meaning, among other things, "partnership", "company", "agreement", "accord". It specifically defines "in consort" to mean "in company". As such it is considered to be an appropriate word to convey what is intended.
However the difference in shade of meaning between "consort" and "concert" is not sufficient as to make much difference to the efficacy of the section.
So the Minister will accept my amendment?
It is really immaterial. If it would make the Deputy sleep better tonight I will accept it.
I thank the Minister. When I lose my seat I will look back on this night. I want to make one point. It is amazing that it took three advisers to get the Minister to change his mind.
They had to wait all evening to get to it.
Amendment agreed to.
Amendment No. 24 not moved.
On a point of order, is it suggested that amendment No. 24 is out of order?
Yes, because it does not arise out of the Committee Stage debate. Therefore, it does not qualify for inclusion here.
I will have great difficulty sleeping tonight. I am taken by surprise.
I take it you are having nightmares about other matters.
I move amendment No. 25:
In page 91, lines 28 and 29, to delete "mineral hydrocarbon light oil used in vehicles" and substitute "hydrocarbon oil used for combustion in the engines of vehicles".
Deputies will recall that I undertook to look at a number of points raised on Committee Stage regarding this section. I now propose to amend the first line of subsection (1) (b) to provide for a rebate of excise on auto diesel as well as on petrol used in a vehicle specially constructed or adapted for use by a disabled driver or passenger. I commend this amendment to the House.
(Limerick East): I thank the Minister for his amendment. We raised this matter on Committee Stage. The rebate will now be available to disabled drivers in respect of diesel fuelled cars as well as petrol fuelled cars. For cars with power steering or automatic gear change diesel may be a more appropriate option. It is a good amendment. I am very pleased with the section the Minister has now included in the Bill in respect of tax concessions for disabled drivers. Last year the Government intended to scrap the scheme and replace it with a restrictive and most unsatisfactory scheme of grants from the health boards. All of us, led by the Minister, were able to avert this and the scheme is being maintained whereby there will be a refund of VAT and excise duty on cars and a refund of excise duty on petrol. We have clarified and expanded the criteria of eligibility for the scheme so that it meets needs more effectively.
One or two items have been brought to my attention by the Irish Wheelchair Association. I understand they are worried about the reference to "any vehicle" in subsection (1) (b) and that they would prefer a reference to "any motor vehicle". In subsection (2) (a) they fear that the reference to "further medical criteria" may open up the possibility of excessive bureaucratic intervention. In subsection (2) (b) they would like to know who would determine appeals. They wonder how it is proposed to implement subsection (2) (g) which requires evidence that the vehicle is for the driver's personal use and evidence of his or her driving capacity. They wonder if it would apply in the case of a progressive disease where at a given time a disabled person might be able to drive but the progress of the disease might render him unable to drive. I understand there are cases where this happens and the disabled person who progressively becomes unable to drive continues to use the tax refunds and is driven about by a spouse. That is a serious issue which the Minister might take on board. He might look at these issues when drafting the regulations. He might also confirm that the spokespersons on Finance will have sight of the regulations before they are promulgated.
Amendment agreed to.
I move amendment No. 26:
In page 92, line 8, after "size" to insert "or sizes".
I am also amending subsection (2) (e) by adding the words "or sizes" after "size". It will be my intention to stipulate in the regulations an upper limit of two litres for private cars. I would like, however, freedom to stipulate a different limit for vehicles adapted for use by disabled persons as passengers. This amendment provides such freedom.
I commend this amendment to the House. I take the opportunity to tell Deputy Noonan and the House that I will take note of the matters raised. It is not my intention to make this scheme over-bureaucratic. We all set out to find a scheme acceptable to this section of the community and we do not intend to stifle it by over-bureaucratic regulations.
Amendment agreed to.
I move amendment No. 27:
In page 92, between lines 28 and 29, to insert the following:
"(4) The Minister may by regulation made under this section amend any regulations previously made under this section.".
When I put forward this amendment on the last occasion the Minister said it was implicit in the section and that he did not think it was necessary. I was wondering if the Minister would reserve onto himself the right to revoke regulations made. It would be quite serious if a future Minister for Finance simply revoked all the regulations and left nothing there. I would not be keen to give to the Minister the power to end it by the stroke of a pen.
When I looked for the revocation clause I found there was no right of amendment either. Deputy Noonan made the point about the Opposition spokesmen seeing the regulations, but it might mean very little if amendments were made without a similar undertaking in relation to them. It is not a very big point but there does not seem to be any power to amend. The Minister may find this working to his detriment.
Some disabled driver might claim he was prejudiced by an amendment made and might challenge the right to amend, saying the Minister was given only one power to make regulations once and never given any power to change them. Most sections which allow a Minister to make regulations seem to contain a power to revoke regulations by other regulations. If a disabled driver thought that some restriction of cover made by some future Minister was improper, he might be able to make the argument that since there was no right to amend the regulations once made, they must stand for good. There does not even seem to be the statement that the Minister may from time to time make these regulations.
Section 15 (3) of the Interpretation Act, 1937, provides that every statutory power to make regulations shall, unless the contrary intention is explicit, be construed as a power to revoke or amend such regulations. This answers the Deputy's point.
I concede that fully. Why do they put in all the other Acts the power to amend or revoke?
Amendment, by leave, withdrawn.
I move amendment No. 28:
In page 95, line 48, after "sections 52," to insert "53*,".
This amendment is consequent on amendment No. 14. It has the effect of providing that the date of passing of the amendment is the commencement date for the amendment.
Amendment agreed to.
Question proposed: "That the Bill do now pass."
(Limerick East): I thank the Minister for his courtesy and his open-minded treatment of the debate. He took many amendments on board and introduced amendments himself to meet the points raised. It is a curiosity of the House that frequently a kind of Murphy's law applies and work expands to fill the time available. This certainly seemed to happen on Tuesday and we are finishing on time tonight. Murphy's law did not apply tonight. People were not long winded and the debate fitted the time allocated.
Without the racing industry it might have been shorter.
(Limerick East): The help from the horse and jockey club.
The Minister was convivial.
I would re-echo what Deputy Noonan has said. The Minister has been amenable to a number of amendments. There were others in relation to anti-avoidance measures which he might have taken on board, but that is life. On behalf of the Labour Party, who are not present, I offer the Minister every good wish.
The Workers' Party hope the question will be put.
Question put and declared carried.
This Bill is certified a Money Bill in accordance with Article 22 of the Constitution.