Finance Bill 1991: Report Stage (Resumed).

Debate resumed on amendment No. 30:
In page 18, between lines 12 and 13, to insert the following:
"14.—(1) In this section `tax' means income tax or corporation tax as the case may be.
(2) (a) This section applies to a gift of money which, on or after 6th April, 1991, is made to the Minister for the benefit of the youth service and is not deductible in computing for the purpose of tax the profits or gains of a trade or profession or is not income to which the provisions of section 439 of the Income Tax Act, 1967, apply.
(b) The Revenue Commissioners may consult with the Minister in relation to any question which may arise in connection with paragraph (a).
(3) Where a person proves that he has made a gift to which this section applies and claims relief from tax by reference thereto, the provisions of subsection (4) or, as the case may be, subsection (5) shall apply:
Provided that, in determining the net amount of the gift for the purposes of those subsections, the amount or value of any consideration received by the said person as a result of making the gift, whether received directly or indirectly from the youth service or any other person, shall be deducted from the amount of the gift.
(4) For the purposes of income tax for the year of assessment in which a person makes a gift to which this section applies, the net amount thereof shall, subject to subsection (5), be deducted from or set off against any income of the person chargeable to income tax for that year and tax shall, where necessary, be discharged or repaid accordingly; and the total income of the person, or where the person is a wife whose husband is assessed to income tax in accordance with the provisions of section 194 (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, the total income of the husband shall be calculated accordingly:
Provided that the relief under this section shall not be given to a person for a year of assessment—
(a) if the net amount of the gift (or the aggregate of the net amount of gifts) made by him in that year, being a gift or gifts, as the case may be, to which this section applies does not exceed £100, or
(b) the extent to which the net amount of the gift (or the aggregate of the net amounts of gifts) made by him in that year, being a gift or gifts, as the case may be, to which this section applies, exceeds £10,000.
(5) Where a gift to which this section is made by a company—
(a) the net amount thereof shall, for the purposes of corporation tax, be deemed to be a loss incurred by the company in a separate trade in the accounting period of the company in which the gift is made, and
(b) the reference in the proviso to subsection (4) to a year of assessment shall be construed as a reference to an accounting period of the company.
(6) This section, in so far as it relates to income tax and corporation tax, shall be construed together with the Income tax Acts, and the Corporation Tax Acts, respectively.".
—(Deputy Deenihan.)

Everybody agrees with the sentiment of this motion, that those who are engaged in youth services are doing important and valuable work. Nevertheless, we are engaged here in an exercise of not narrowing the tax base but attempting to widen it to bring benefits to all taxpayers. This amendment, if accepted, would narrow the base rather than widen it. Already £9.8 million has been allocated this year as against £8.9 million last year. That is not a cutback. We are all aware that inflation is running at less then 3 per cent. In addition a further £5.6 million is provided for sports organisations where our young people would be the principal beneficiaries. When you contrast that with pre-1988 when £1 million to £2 million was spent by the Exchequer on youth services, then one can see that since the advent of the lottery, youth services have been the recipients of significant allocations. We would all like to give them more but that is the reality. There is no point in talking about a budgetary situation in the UK where they do not have a lottery from which such amounts of money can be allocated to youth organisations.

I am not surprised at the Minister's response. I was disappointed at Deputy O'Dea's response and certainly he did not endear himself to the youth organisations this morning by implying that this was not a very worthy cause. I put down this amendment not because it would be a cost to the Exchequer but to give an opportunity to people to invest in the youth services and to give them an incentive to do so. Whatever money we spend on young people is a good investment. Nevertheless it is obvious that the amendment will not be accepted.

I would like to point out that whereas the allocation for youth work in general has been increased this year, the amount for various youth organisations has been reduced drastically in some cases. As a result 35 people have already lost their jobs and more will follow. Expenditure for the programmes in general has been increased but for the various youth organisations there have been marked and drastic reductions.

I would ask the Minister to convey to his Cabinet members my personal disgust and that of the youth organisations. These people will be on the streets shortly; they will make it very awkward for the Government and they have every right to do so. Their plight has been totally ignored both in this House and in general. These are the people who provide the service our education system should provide for all our young people. In withdrawing the amendment I would like to express my dissatisfaction at what is happening in the overall youth service. It is totally unfair and it is an abandonment of our young people by the Government.

Deputy Mac Giolla rose.

Has the Deputy not spoken earlier?

No. I support what Deputy Deenihan has said.

I am in a difficulty because I presumed that Deputy Deenihan was concluding the debate as he had move the amendment earlier. I was not in the Chair at the time so I will give Deputy Mac Giolla the benefit of the doubt.

The Minister said that he had increased the allocation this year from £8.9 million to £9.8 million but the allocation has not yet reached what it was in 1988.

At that time it was only £1 million to £2 million.

A sum of £4.8 million was allocated to disadvantaged youth. There has not been a breakdown of where that went. I would like to see a breakdown showing where that half of the allocation went — to youth or community groups or to what area? The Minister cannot say sufficient money has been allocated to youth organisations. The fact that many of our youth have fled the country has influenced the Government in ignoring them. Five, six or seven years ago youth held centre stage when special youth employment levies were imposed. Our youth were our greatest resource but now they have gone and the Government have lost interest. This is no longer top of the agenda. That is the main point Deputy Deenihan was trying to make and I support it. The Minister should try to get the youth organisations back on centre stage and give them sufficient resources to expand. A report issued in 1984 estimated that the amount of funding needed for youth organisations was £20 million. They are now getting £9.7 million. That is totally inadequate.

Amendment, by leave, withdrawn.
Amendment No. 31 not moved.

I move amendment No. 32:

In page 21, to delete lines 17 to 40.

I wonder if Deputy Rabbitte is conveniently absent. It is hard to rationalise the logic behind this amendment when one reads the budget night debate when he advocated the opposite to what he is advocating now. The Deputy said then that if we were serious about the BES we should not curtail it. This is the biggest U-turn in the debate.

You are taking a chance there, Minister. We are talking about amendment No. 32.

Amendment No. 31 was ruled out of order. Is he not lucky? It is no harm to mention it anyway, because the Deputy tried to convince me yesterday that he had not made a U-turn. Amendment No. 32 is difficult to reconcile with Deputy Rabbitte's approach on Second Stage, when he was highly critical of the introduction of transitional arrangements. We introduced transitional arrangements in response to hardship cases where small operators had committed themselves under legal contract to carry out certain work and the season would be too short to enable them to use normal borrowing requirements to repay money. The transitional arrangements took those hardship cases into consideration. Deputy Rabbitte was very critical of that and now he wants to broaden the transitional arrangements I introduced. I do not understand the Deputy's logic. This was debated on budget night in a fair and open manner and I met the arguments put forward then.

I reject the amendment. There were abuses that needed to be rectified. Big operators could use and abuse the BES to the exclusion of small operators. This was a good scheme but it has to be properly focused. The changes I have made will refocus the scheme on small companies who cannot borrow in any other way.

Amendment, by leave, withdrawn.

I move amendment No. 33:

In page 24, line 3, to delete "£500,000" and substitute "£2,000,000".

The net effect of this amendment is to increase the amount a company can borrow under the BES. It stands on its merits.

Under the BES only 35 out of 239 companies raised more than £500,000 and that is why I set the figure at £500,000. Under the scheme some 115 companies raised amounts of £50,000 or less.

Indeed, from the start of the BES up to the end of the 1989-90 tax year 55 per cent of all investments were less than £50,000 while over 90 per cent of the amounts raised were less than £500,000. On the reasonable assumption that this pattern will continue, the vast majority of the remaining eligible firms will still be able to raise required funds through the BES. All that is changing is the cost to the Exchequer which has arisen from a small number of expensive, largely asset-backed and risk free projects. The statistics clearly show that a BES capital ceiling of £500,000 is more than adequate for most companies' needs. As we know, the multiple company concept was used by a considerable number of companies in this regard.

Amendment, by leave, withdrawn.
Amendments Nos. 34 and 35 not moved.

(Limerick East): I move amendment No. 36:

In page 25, between lines 28 and 29, to insert the following:

"18.—(1) Section 12 of the Finance Act, 1989, is hereby amended by the deletion of `£7,000' in each place where it occurs and the substitution therefor of `£9,000'.".

This amendment is to increase the capital allowances paid in respect of motor vehicles. I would like to hear the Minister's response to the proposal.

I accept that the capital limit used in determining capital allowances and running expenses deductions for cars has lost relevance to the market value of a car which is adequate for commercial use. Increases in both the 1988 and 1989 Finance Acts brought the limit from £4,000 to its current level of £7,000. This is an expensive relief. Because I was reducing VAT which affected the cost of cars, I simply could not find room to do both this year. It is a question of cost.

Sales of cars went up from 54,000 in 1987 to 83,000 in 1990. The motor industry benefited significantly from the reductions in the standard rate of VAT in the last two years. This year's 2 per cent reduction will represent a saving of up to £10 million in sales purchases for the business community. Economic circumstances have changed and have affected the purchasing of cars this year, especially in the first three to four months. That is a reflection on economic activity and the worldwide recession. To increase the limit from £7,000 to £9,000 would cost £12 million in a full year.

Consequently, I reject the amendment.

Amendment, by leave, withdrawn.

(Limerick East): I move amendment No. 37:

In page 25, between lines 28 and 29, to insert the following:

"18.—The provisions (inserted by the Corporation Tax Act, 1976, and amended by section 20 of the Finance Act, 1985) of the Income Tax Act, 1967, specified in the Table to this section shall have effect as if the references to the 1st day of April, 1991 (as provided for in the Finance Act, 1988) were references to the 1st day of April, 1992.

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Subsection (2A) (a) of section 254 (industrial building allowance).

Paragraph (ii) of the proviso to subsection (1) and paragraph (ii) of the proviso to subsection (3) of section 264 (annual allowances),

Paragraph (iii) of the proviso to subsection (1) of section 265 (balancing allowances and balancing charges).".

This is something I mentioned on Committee Stage and Deputy Deasy has a constituency interest in it. Certain tax reliefs are allowed for multi-storey car parks in designated areas. These reliefs or other reliefs do not apply outside the designated areas. There is room for some relief to encourage the building of multi-storey car parks in advance of designation of areas. I understand that Deputy Deasy had in mind a project which is being undertaken by Waterford County Council to alleviate traffic problems in Dungarvan. Multi-storey car parks will only be built where there is a public demand, where people will pay for space. The possible tax foregone would be quite small. There will certainly not be a great rush to build multi-storey car parks.

The provision to which I refer, and which Deputy Deasy seeks to restore, was, if I remember correctly, renewed in every Finance Bill in the late eighties. I do not think there was any taker until the issue of designated areas came up. Certainly, in a series of Finance Bills this relief was renewed and there was no takeup. Now that there is a specific public sector project in mind under which there would be an arrangement with a developer I should like the Minister to consider allowing the measure for one year to see if the project will go ahead.

The amendment as drafted would open up avenues for abuse. The whole policy has been directed towards the elimination of accelerated capital allowances, which is in line with the OECD recommendations for a reduction of the corporate tax rate. I could not accept the amendment as it stands. The Deputy's statements are directed at one public sector car park project, but the amendment, as drafted, goes much wider than that. I am not in favour of restoring accelerated capital allowances per se. I could not accept the amendment in the way it is drafted because it would open up many issues again, but we could consider the matter next year if that is not too late.

(Limerick East): Will the Minister's officials talk to the people involved to ascertain whether an arrangement could be arrived at either by simply designating the car park as a designated area so that it could benefit from the schemes already in place or by some other method?

(Limerick East): The issue is important to one town. It is not a tax avoidance idea and I should like to see it go forward.

I know that. I shall certainly have my officials talk to the county manager concerned, but designation per se would be a matter for the Minister for the Environment.

(Limerick East): Certainly, but the Minister is on reasonably friendly terms with the Minister for the Environment.

We can talk; there is nothing to be lost by talking.

Amendment, by leave, withdrawn.
Amendments Nos. 38 and 39 not moved.

(Limerick East): I move amendment No. 40:

In page 30, to delete line 47, and in page 31 to delete lines 1 to 15, to delete paragraph (c) and substitute the following:

"(c) in subsection (2)—

(i) by the deletion of `, before the building or structure is used,',

(ii) by the deletion of paragraph (a), and

(iii) in paragraph (b), by the deletion of the words `before the building or structure is used' and the substitution therefore of `before any allowance under Chapter II, Part XV of the Income Tax Act, 1967 and Chapter I, Part XVI of the Income Tax Act, 1967, has been claimed',".

This is another amendment I have put down on a specific request to raise the issue with the Minister for Finance. I should like the Minister to tell me of his attitude to it.

Section 19 of the Finance Act, 1970 allowed the purchaser of a building to claim capital allowances on the cost of the building provided that the building was unused at the time of sale. The provision gave rise to a problem in the designated areas whereby a purchaser of a building could be denied the capital allowances if the developer of the building put a tenant in place before selling the building to that purchaser. Representations have been made that investors should not be denied the capital allowances if the building is sold within a short period after setting a tenant in place.

In my opinion section 21 provides an adequate response to the problem by ensuring that capital allowances will not be denied if the building is sold within one year after its first use. Deputy Noonan's amendment seeks to remove any time limit from the provision. I do not believe this is necessary. The allowances are designed to encourage construction and should be made on or shortly after construction. To allow them to be deferred without limit may leave room for manipulation. The time limit will ensure that investors will be found within that period of one year thus freeing the developer to undertake new projects.

In the circumstances, I must oppose the amendment.

Amendment, by leave, withdrawn.
Amendments Nos. 41 to 44, inclusive, not moved.

(Limerick East): I move amendment No. 45 which is the name of Deputy Cotter:

In page 62, between lines 22 and 23, to insert the following:

"59.—The provisions of this Chapter shall have effect in relation to the towns of Ballybay, Carrickmacross, Castleblayney, Clones and Monaghan in County Monaghan as they have in relation to the Temple Bar Area.".

The Deputy cannot be serious.

This amendment seeks to extend the Temple Bar scheme of tax reliefs provided by Chapter VII of the Bill to the towns of Ballybay, Carrickmacross, Castleblayney, Clones and Monaghan.

It would not be appropriate to extend the Temple Bar Area tax reliefs to any other area. These reliefs are being given in unique circumstances and for a very specific purpose. The Deputy will be aware that Dublin has been given the signal honour of being designated European City of Culture in 1991. In addition to the various activities and events being undertaken in the city to mark the occasion, the Government have chosen the refurbishment and conservation of the Temple Bar Area as their flagship project. The same argument could not be made in favour of the other towns mentioned. What the Deputy may have in mind is an extension of designated area status for the towns in question, and if that is so then that is a question for the Minister for the Environment who could bring those towns into the programme of designation.

Amendment, by leave, withdrawn.

I move amendment No. 46:

In page 63, between lines 23 and 24, to insert the following:

"(5) The Minister for Finance will establish, in conjunction with the Revenue Commissioners, a statutory clearance procedure which will enable an acquiring company to obtain advance confirmation that a proposed payment will or will not satisfy the conditions for treatment as a CGT transaction.".

On a point of order, is it in order to ask the Minister, in relation to section 73, to which there is no amendment——

No, I am sorry, Deputy. The House is on Report Stage and only amendments tabled may be dealt with.

(Limerick East): The point may be raised on Fifth Stage, in about ten minutes.

I am glad to note that Deputy Noonan has the same sense of timetable as I have. This amendment was put down on Committee Stage but was not reached. I was advised by my advisers that in order to facilitate the orderly taxation of companies in the business of acquiring shares within the company, and to have schemes cleared in advance by prospective purchasers, that there should be some statutory system of clearance, a procedure that would be agreed and established by the Revenue Commissioners, than allow people to walk into the system in anticipation. I am not sufficiently expert on taxation to comment on the practicability of the amendment. I was advised by a practising accountant and the amendment seems to have many merits. I was a little worried about whether its wording is in order. Is the Minister prepared to take on board the principle and allow the Revenue Commissioners introduce the same mechanism by a different route? If so I would be happy.

I know what the Deputy is looking for. I understand he is talking about the need for certainty.

He talks about a possible approach by the Revenue Commissioners. I confirm to the Deputy, and to the House, that the Revenue Commissioners will be prepared to state their opinion as to how the new provisions apply to an acquisition by a company of its own shares in advance of the actual acquisition.

In writing?

Yes, in writing.

Amendment, by leave, withdrawn.

I move amendment No. 47:

In page 79, line 19, to delete "and" and substitute "any".

Amendment No. 47 and amendment No. 48 are technical amendments that correct minor drafting errors.

Amendment agreed to.

I move amendment No. 48:

In page 79, line 36, to delete "or" and substitute "for".

Amendment agreed to.

I move amendment No. 49:

In page 85, between lines 3 and 4, to insert the following:

"82.—Notwithstanding anything in the Value-Added Tax Acts, tax payable on motor cars imported by disabled persons for their personal use only, shall be zero-rated.".

My reason for moving the amendment is that there is a particular sense of urgency about the issue. The Minister has been very helpful and he understands the position. My amendment would cover the case of a person who is seriously injured in any way. I wish to make reference to a person who was seriously injured in a sporting accident and is now quadriplegic. That person is trying to import a car that has been especially adapted and designed for a person who is physically handicapped. The individual in question has no power in either of his legs, has no power in his right arm and has very limited power in his left arm. The car has been adapted in such a way that it could be driven by that person.

There are simple procedures whereby a person can get in and out of the car because the seats are movable as a result of adaptation. Also, by pressing a button a wheelchair can be taken in and out and put in such a position that the person can move it without great effort. If the person imports a car he will get an allowance under the regulations if it is purchased but, in this instance, the car has not been purchased as the person cannot afford it. The Trevor Jones Trust are providing the car on loan and because of that it is not covered by the regulations. If I thought there would be widespread abuse of any regulation I would not make a case to the Minister but this is a specific case and the Minister should make every effort to accommodate this person.

The Minister said that he did not want to include it in a Finance Act, that he is anxious to bring it in in the form of a regulation. A review has been carried out and I would not press it except for the great sense of urgency. From correspondence with the Minister, I know his heart is in the right place and I do not want to press the matter unduly. However, I should like the Minister to favourably consider it and I thank him for his help so far.

The details of this case were outlined on Committee Stage and I told the Deputy that I was sympathetic in regard to them. To further the goodwill which exists between all parties in dealing with the disabled, I have moved in advance of the review to reduce the cost of adaptation where it is not less than 20 per cent. We all have sympathy with the specific case mentioned by the Deputy and I have asked my officials to address it. I assure the Deputy that a solution will be found well in advance of the review. We will be in touch with the Deputy very shortly to tell him how he can approach the problem to get the result he wants.

I thank the Minister for his help and courtesy in the Dáil and in correspondence with him and his Department. I also spoke on the telephone to a number of Revenue Commissioners who were exceptionally helpful.

Amendment, by leave, withdrawn.

I move amendment No. 50:

In page 87, line 38, after "goods" to insert "or the provision of food and related beverage services normally provided".

I expect the same response to my arguments from the Minister but perhaps he wishes to add something?

The figures of the Irish Hotels Federation appear to have put the cost of this measure at £4 million but we put the cost at £15 million. The differential is probably made up by restaurants, take-aways and other areas which would not impact directly on the hotels sector of the whole restaurant business. However, we confirm our figure of £15 million. A lot of play was made on Committee Stage about the cost of meals in other countries. Madame Scrivener's statement has not been followed through in any shape or form and if the situation changes I will refer to it in my next budget. For the benefit of Members the figures are as follows: Ireland 12.5 per cent; the UK 17.5 per cent; Belgium 17 per cent; Denmark 22 per cent; Germany 14 per cent; Luxembourg 12 per cent; the Netherlands 18.5 per cent; Portugal 0 per cent; Spain 8 per cent; Italy 9 per cent; France 18.5 per cent. Those figures show that we will still be very competitive but I take on board that the tourist sector will be a bigger contributor to our economic wellbeing in future and, consequently, we must ensure that it stays competitive.

Amendment, by leave, withdrawn.

I move amendment No. 51:

In page 101, between lines 34 and 35, to insert the following:

"113. —Section 58 (2) (a) of the Capital Acquisitions Tax Act, 1976 is hereby amended by the insertion of the following after subsection (2) (a) (ii):

`(iii) a person or a child of a person with whom the disponer is living as man and wife.'.".

I re-entered this amendment having regard to the Minister's positive and constructive response last night. I am not trying to use legislation in regard to finance to change the social code, that is for a different Minister and a different set of arguments. In section 117 of the Bill as amended in Committee it seems that the Minister has discretion in relation to the value of an inheritance. I refer to a position where one partner dies leaving an inheritance — which becomes a gift — to the other but which attracts a tax liability. I appreciate that we will not change the law in the Finance Bill but subsection (iii) states:

has resided in the house with the disponer continuously for a period of not less than 5 years ending on the date of the inheritance,

which seems to offer a vehicle for exploration. If the Minister can find a way anywhere in the tax code to avoid the hardship to which I referred I would not be fussy about how it is done; the laws of marriage are for another Minister and for another day. I am specifically concerned with hardship in relation to tax in this instance.

I wish to thank the Deputy for appreciating that general law should lead in this area; it will come under active consideration towards the end of the year when the White Paper on Marriage Breakdown is prepared and ready for debate. I appreciate that Deputy Quinn and other Members have spoken about this growing problem which cannot be ignored. We will certainly take on board the suggestions made by Deputy Quinn in trying to find a solution outside the constitutional problems created in this area because of the special position of marriage within the Constitution. We will look at it in a positive light and see if we can find a solution which does not impinge on the Constitution. I assure the Deputy that the Department of Finance and the Revenue Commissioners, together, will approach it positively to seek a solution without creating further problems for everybody.

(Limerick East): I support Deputy Quinn's amendment. The Minister referred to the forthcoming White Paper on Marriage Breakdown on a number of occasions in reply to this amendment and similar amendments on Committee and Report Stages. Are the terms of reference of the White Paper sufficiently wide to allow those compiling it to examine the tax implications of divorce and other financial implications which would arise from divorce legislation in relation to the tax and social welfare codes? Are we likely to get a series of uncosted conclusions?

Sin ceist eile, as I am sure the Deputy fully realises.

(Limerick East): No answer?

No answer, I will leave that to the Minister concerned.

I appreciate the response of the Minister. I accept his goodwill in this area and I await next year's Finance Bill with anticipation.

Amendment, by leave, withdrawn.

I move amendment No. 52:

In page 107, between lines 17 and 18, to insert the following:

"126. —As respects the year 1991-92 and subsequent years of assessment, section 141 (inserted by the Finance Act, 1986) of the Income Tax Act, 1967, is hereby amended by the substitution, in subsection (4), of `£2,100' for `£720' and the said subsection (4), as so amended, is set in the Table to this section.

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(4) No deduction shall be allowed under this section in respect of any child who is entitled in his own right to an income exceeding £2,100 a year, except that, if the amount of the excess is less than the deduction which apart from this subsection would be allowable, a deduction reduced by that amount shall be allowed:

Provided that in calculating the income of the child for the purposes of the foregoing provision no account shall be taken of any income to which the child is entitled as the holder of a scholarship, bursary, or other similar educational endownment.".

This amendment fulfils the commitment I gave on Committee Stage yesterday to amend section 141 of the Income Tax Act, 1967. I had many representations from various associations dealing with this area, as I am sure many other Deputies had, and in response I am lifting the level from £750 to £2,100 which is the limit on the income of incapacitated children for the purpose of an allowance under this section.

Under the section a person may claim an allowance of up to £600 in respect of a child who is permanently incapacitated. The allowance, however, is reduced pound for pound where the child's income exceeds £720 so that no allowance is due where the child's income exceeds £1,320. This can impose a burden on the parents of such children. To ease the situation therefore, as I promised to do yesterday, I am increasing the income limit for the child to £2,100, which is the same as the single person's tax allowance. This will mean that the child can have an income up to that level and the parent can still qualify for the full £600 tax allowance. I think this will be welcomed by all sides of the House.

: I thank the Minister for his kind response. Last night I requested him to increase the limit to £1,500 but he has been even more generous. Those families caring for physically or mentally handicapped children in the home will welcome this amendment. Again, I thank the Minister for his generosity.

Amendment agreed to.
Bill reported with amendments.
Question proposed: "That the Bill do now pass."

(Limerick East): I thank the Minister, and his officials who have been present in the House for the past two days — two of the finest days we have had this year — for the courteous way in which he dealt with the debate. Despite the heat in the House this was not reflected in the debate.

During the course of the debate on the Finance Bill last year the Minister made various commitments but he did not have the time to meet them between the Committee and Report Stages. However he has done so in this Finance Bill. That should be recorded and acknowledged. Debates can at times prove to be very frustrating for those of us on the Opposition benches if it is only talk for the sake of it but at least on this occasion it appears that we have achieved some results. I hope the Minister will explore those areas he promised to explore and, in next year's Finance Bill, fulfil the commitments he has given, that is if we are all still in the same positions.

This is the first time I have been present in the House for the full debate on a Finance Bill. If I may be so bold, I would like to suggest that we might be far better off if we allocated more time to the debate on Committee Stage and less time for the debate on Second Stage. I ask the Deputies present to bring this suggestion to the attention of their Whips. I certainly intend to do so. Given that it is inevitable that time will be limited with regard to the date on which the fiscal, or financial year starts, we should make better use of the time available. If the Minister is in agreement, I will convey this suggestion to my own Whip and hope that other Members will do likewise. Like Deputy Noonan, I wish to thank the Minister for the courteous way in which he dealt with the debate in the House and for honouring the commitments made in the past.

I have only been present for a few sessions but I am sure Deputy Rabbitte would like to be associated with the remarks made by the other Deputies. I agree with Deputy Quinn when he says there is a need to allocate more time for the debate on Committee Stage — that is where guillotine motions have most effect — rather than for earlier or later Stages.

I wish to join with other speakers in complimenting the Minister and his officials for the work they have put into this Bill. Indeed, it should be said that few Ministers or party spokes-persons, are requested to take part in a three day debate in addition to answering parliamentary questions. I think congratulations are in order.

I was going to raise the following question on Committee Stage but I was advised that it would be more appropriate to raise it at this stage. I wish to refer to section 73 which deals with the grouping of companies. Concern has been expressed that the provisions dealing with the registration of companies for VAT may be applied retrospectively. I think the Minister has indicated that this will not be the case but I would like him to confirm this in the House. Second, would the Minister outline what will happen in a case where directors of a company in receivership are associated with an existing company? Will they be grouped together under this legislation?

That is a good question.

There is no question of the provisions being applied retrospectively.

Indeed, I have stated on many occasions that I do not accept the argument that the provisions of the tax code should be applied retrospectively. On behalf of the officials who have worked hard——

Is the Minister in a position to answer the question about the linking of companies, one of which is in receivership? That sounds like an interesting question.

While waiting for that information, I sincerely thank my officials for making sure that the best information was available to us. We have had a couple of arduous days given the temperature in the Chamber. I agree with the suggestion that there is a need for more time to be allocated for the debate on Committee Stage rather than for the debate on Second Stage. I can assure Deputies Noonan, Enright, Mac Giolla and Quinn that the points which were not dealt with will be addressed between now and the next Finance Bill. I will be in touch with the Deputies on the question of updating the provisions dealing with disabled drivers.

In reply to the question raised by Deputy Callely, a trial scheme has been in operation since 1989 and I understand that the business community are quite happy with it. All we are doing is putting it on a statutory footing. If the Deputy wants to have further discussions with the officials concerned he should feel free to do so. It is the cheapest professional advice he will get in this House.

I wish to compliment Deputies for co-operating during the passage of this Finance Bill. However, there is one matter that I would like to raise over which the Minister apparently has no control. I am referring here to the Council's 18th VAT Directive—

Is that the directive which deals with solicitors?

No, it proposes that veterinary services be subject to a VAT rate of 12.5 per cent. I tabled a question to the Minister on the benefit to the Exchequer from the imposition of VAT at 12.5 per cent on veterinary fees. It was stated in the reply that there was no net gain to the Exchequer and it was strictly a bookkeeping exercise. I believe it is important that we should not do things purely as a bookkeeping exercise. This imposes a cost on people and puts a charge on veterinary services and agriculture services at a point when the agricultural services are experiencing such difficulties. There is no point in imposing a charge for purely bookkeeping reasons. It appears the European Community are imposing regulations which are of no benefit to a particular country and this should be looked at seriously. I would like to hear the Minister's response if he should get the opportunity to reply to it.

Under the 18th VAT Directive adopted in July 1989 we are obliged to move in that direction. The additional costs in relation to it will be negligible and as I have just mentioned the sixth VAT Directive does not permit me to zero-rate anything additional in future.

I thank the Minister for his reply. However, the costs are somewhat greater than the Minister said. There are additional bookkeeping overheads on the veterinary practices and they have to collect it also. It involves additional bookkeeping for the Revenue Commissioners. It is unfortunate that it is of no benefit to the Exchequer.

Unfortunately, the EC is built on bureaucracy. It is the finest bureaucracy in the world. I hate bureaucracy.

We would want to make a start at chipping it away. It is no harm to have common sense and we should proceed along the lines of common sense.

Question put.
The Dáil divided: Tá, 69; Níl, 59.

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Séamus.
  • Browne, John (Wexford).
  • Burke, Raphael P.
  • Calleary, Seán.
  • Callely, Ivor.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hillery, Brian.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Jacob, Joe.
  • Kelly, Laurence.
  • Kenneally, Brendan.
  • Kirk, Séamus.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lawlor, Liam.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Martin, Micheál.
  • McDaid, Jim.
  • McEllistrim, Tom.
  • Morley, P.J.
  • Nolan, M.J.
  • Noonan, Michael J.
  • (Limerick West).
  • Clohessy, Peadar.
  • Connolly, Ger.
  • Coughlan, Mary Theresa.
  • Cowen, Brian.
  • Cullimore, Séamus.
  • Dempsey, Noel.
  • Dennehy, John.
  • de Valera, Síle.
  • Ellis, John.
  • Fahey, Frank.
  • Fahey, Jackie.
  • Fitzgerald, Liam Joseph.
  • Fitzpatrick, Dermot.
  • Flynn, Pádraig.
  • O'Connell, John.
  • O'Dea, Willie.
  • O'Donoghue, John.
  • O'Hanlon, Rory.
  • O'Keeffe, Ned.
  • O'Leary, John.
  • O'Malley, Desmond J.
  • O'Rourke, Mary.
  • O'Toole, Martin Joe.
  • Power, Seán.
  • Quill, Máirín.
  • Reynolds, Albert.
  • Roche, Dick.
  • Smith, Michael.
  • Stafford, John.
  • Treacy, Noel.
  • Tunney, Jim.
  • Wallace, Dan.
  • Wallace, Mary.
  • Woods, Michael.
  • Wyse, Pearse.

Níl

  • Ahearn, Therese.
  • Allen, Bernard.
  • Barnes, Monica.
  • Barrett, Seán.
  • Barry, Peter.
  • Bell, Michael.
  • Belton, Louis J.
  • Bradford, Paul.
  • Browne, John (Carlow-Kilkenny).
  • Bruton, John.
  • Bruton, Richard.
  • Byrne, Eric.
  • Connaughton, Paul.
  • Connor, John.
  • Cotter, Bill.
  • Creed, Michael.
  • Crowley, Frank.
  • Currie, Austin.
  • D'Arcy, Michael.
  • Deasy, Austin.
  • Deenihan, Jimmy.
  • De Rossa, Proinsias.
  • Doyle, Joe.
  • Dukes, Alan.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Finucane, Michael.
  • Flaherty, Mary.
  • Flanagan, Charles.
  • Garland, Roger.
  • Gilmore, Eamon.
  • Gregory, Tony.
  • Harte, Paddy.
  • Higgins, Jim.
  • Hogan, Philip.
  • Kavanagh, Liam.
  • Kemmy, Jim.
  • Kenny, Enda.
  • Lee, Pat.
  • Lowry, Michael.
  • McCartan, Pat.
  • McGahon, Brendan.
  • Mac Giolla, Tomás.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East).
  • O'Brien, Fergus.
  • O'Shea, Brian.
  • O'Sullivan, Gerry.
  • O'Sullivan, Toddy.
  • Owen, Nora.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Reynolds, Gerry.
  • Ryan, Seán.
  • Spring, Dick.
  • Taylor-Quinn, Madelene.
  • Yates, Ivan.
Tellers: Tá, Deputies V. Brady and Clohessy; Níl, Deputies Flanagan and G. O'Sullivan.
Question declared carried.