Michael Noonan
Question:8 Mr. Noonan (Limerick East) asked the Minister for Finance if he will outline the scope and purpose of the second Finance Bill scheduled for publication in the autumn of this year.
Ceisteanna—Questions. Oral Answers. - Autumn Finance Bill.
The second Finance Bill to which the Deputy refers and which will be introduced in the autumn, will have two primary functions. Firstly, it will complete, subject to progress at Community level, the programme for fiscal legislation required by the Internal Market; there are areas where the relevant EC Directives have still to be adopted. In this context, it will also provide for the domestic measures needed to offset the adverse cash flow implications for the Exchequer in 1993 of the ending of VAT at point of entry on goods sourced in other EC member states.
Secondly, the Bill will contain the legislative provisions for a new fringe benefits tax as announced in the budget, as a means of ensuring the effective taxation of such forms of remuneration and of broadening the tax base, and which is to come into operation on 6 April 1993.
Finally, the Bill may contain some other provisions which the Government may feel necessary between now and its publication. It would be my intention that such measures would be kept to a minimum so as not to detract from the primary functions of the Bill to which I previously referred.
(Limerick East): May I ask the Minister what is the expected cash flow loss from the change in VAT arrangements at the point of entry, which will come into effect on 1 January next year? Would the Minister outline some of the measures he has in mind to recover that loss, because to put their affairs in order traders would need an indication in principle now rather than have to wait the announcement of details in the second Finance Bill in the autumn.
The cash flow figure is £200 million. A number of suggestions have been made as to how this matter could be dealt with. Work on the matter was suspended during the course of the work on the Finance Bill but it recommenced this week. I accept what the Deputy has said, that we should not put this matter on the long finger, and it is not my intention to do so. About half a dozen suggestions have been made and they require extensive analysis. I would like to see what their impact would be on industry, and that work will be done immediately. I do not want to make too much of this point but the effective date is not necessarily 1 January next; it will be within the year. I accept the thrust of what the Deputy said and I will be anxious to deal with the matter as quickly as possible.
(Limerick East): Is the Minister aware of the widespread concern about some of the anti-evasion and anti-avoidance measures introduced in the recent Finance Bill? Would the Minister consider consolidating all anti-evasion and anti-avoidance measures in the Finance Bill in the autumn so that one code and one reference would be available to the taxpayers and the professional practitioners involved in these matters? That would also give this House an opportunity of having a thorough and systematic debate on these measures which, up to now, we have approached in a piecemeal fashion and with time schedule deadlines.
I can see the sense in what Deputy Noonan has said, but to have arrangements completed by the autumn would be stretching the system. I am anxious to keep the Bill in the autumn to an absolute minimum. Many of the people involved in the work on that Bill will also be involved in work on various EC Directives. The point made by the Deputy is a reasonable one because many of the issues involved have been in law for 20 years. However, the public have realised that most of these issues have created no difficulty — the difficulty has arisen mainly with third party measures, which I have amended. Discussions have commenced with accountants and tax officials on a statement of practice to make sure that no difficulty arises. I am not sure what the implications of the Deputy's suggestions are but I will consider the matter to see what can be done.