Vol. 482 No. 3
I move amendment No. 1:
In page 79, line 37, after "shall" to insert "continue to".
The purpose of this amendment is to remove an ambiguity in the Bill as it stands. As the provision in question, section 2 (4)(b)(vii) of the Age of Majority Act, 1985, ceased to apply in 1986 it cannot cease to again apply if it no longer applies. For that reason the provision, as worded at present, does not express existing law as it applies.
The amendment relates to section 7 of the Bill. That section consolidates the provisions of section 112 of the Finance Act, 1986, which provided for the application of the Age of Majority Act, 1985, to certain taxation statutes. To apply the provisions of the Age of Majority Act, 1985, to tax law section 112 of the Finance Act, 1986, provided for the formal cesser of the provision in the Age of Majority Act, 1985, which had prevented such application, namely, section 2 (4)(b)(vii) of that Act.
The Deputy is proposing in relation to this formal cesser that the words "shall cease to apply" in section 7 (1) of this Bill be replaced with the words "shall continue to cease to apply". His concern appears to be that as section 2 (4) (b) (vii) of the Age of Majority Act, 1985, ceased to apply in 1986 when the underlying legislation was enacted it cannot cease to apply again if it no longer applies.
The difficulty with the Deputy's proposal is that it seems to suggest this is in some way new legislation. That is not the case. This Bill consolidates existing law. Section 7, as drafted, faithfully replicates the form of the underlying legislation, namely, section 112 of the Finance Act, 1986. Legislation is always current and should be read as such. Accordingly the phrase "shall cease to apply" has equal effect in 1997. I do not propose, therefore, to accept the Deputy's amendment.
Amendment No. 2 in the name of Deputy Ferris. Since amendments Nos. 2, 3, 17, 22 and 23 form a composite proposal I suggest, with the agreement of the House, they be debated together.
I move amendment No. 2 :
In page 97, line 39, to delete "the United Kingdom" and substitute "Great Britain and Northern Ireland".
We debated this phrase at some length on Committee Stage. The expression "Great Britain and Northern Ireland" is used widely in sections 73 and 830. The Minister's explanation to the joint committee was not entirely satisfactory in that he offered no clear reason for the difference in terminology, nor is it clear there is as much strength in the argument that the terms have a different meaning. It was for that reason I retabled this amendment in the hope that he would be prepared to re-examine it.
The Deputy's intention is to achieve uniformity of expression in the Bill by substituting the term "Great Britain and Northern Ireland" for "the United Kingdom" wherever it occurs. The Deputy makes the point that the expression "Great Britain and Northern Ireland" is used more widely in the Bill.
While one would tend to agree with Deputy Ferris that we should strive for as much consistency as possible — as I stated in the course of our joint committee deliberations — the fact remains that there may well be cogent reasons for the Oireachtas in the past having used slightly different versions to describe what might seem at first sight to be the same thing. Therefore, we should be very careful in making changes to this Bill lest we inadvertently make a substantive change to the underlying law.
Deputy Ferris seeks to amend section 29 which modifies the charge to capital gains tax in the case of gains arising to resident or ordinarily resident individuals, not domiciled in the State, from the disposal of assets situated outside the State and the United Kingdom. I am informed that the parliamentary draftsman's office has indicated that replacing the expression "the United Kingdom" with that of "Great Britain and Northern Ireland" could result in a slight change in the meaning of the underlying legislation. For example, what would be the status of the United Kingdom's areas of the Continental Shelf or even the territorial seas of the United Kingdom? In this connection I refer Deputy Ferris to section 276 of the Taxation of Chargeable Gains Act, 1992, the United Kingdom equivalent of our Capital Gains Tax Act, 1975, where the territorial sea of the United Kingdom is deemed for all purposes of the taxation of chargeable gains to be part of the United Kingdom. In the light of this provision it is certainly arguable that using the expression "Great Britain and Northern Ireland" in Irish legislation rather than that of "the United Kingdom" in some instances may have the effect of excluding such areas, thereby changing the existing law.
Since it is clear there may be a possibility that this amendment could result in a substantive change in the law — beyond the remit of consolidation - I must oppose these amendments.
I still agree with the Minister's position enunciated on Committee Stage. If we wanted to call things by their constitutionally correct name, it would be in addition to "Great Britain and Northern Ireland" that we would include "the United Kingdom". Regardless of our political positions, I understand the recognised term is "the United Kingdom of Great Britain and Northern Ireland".
The Minister is being rightly prudent in this respect because, to change the underlying terminology designating territory in a Taxes Consolidation Bill, in which the issues of domicile could be a dominant factor — even though one cannot point to a specific case in the Bill where such difficulty could arise if Deputy Ferris's amendment were accepted — it is not worth taking the risk for the sake of neatness of drafting.
If the Minister's opinion is that it could lead to substantial change in the legislation outside the scope of this Bill, I shall not press my amendment. Nonetheless, I am not entirely satisfied with some of the explanations given. While understanding the nuances of the past, I contend we should now move forward.
Amendment No. 4 in the name of Deputy Ferris is ruled to be out of order on the basis that it is of the nature of a substantive amendment of the statute law.
We come to amendment No. 6 in the name of Deputy Ferris. Since I observe that amendments Nos. 6, 7, 15, 19, 20 and 21 are cognate, with the agreement of the House, I suggest they be discussed together.
I move amendment No. 6:
In page 264, line 45, to delete "country" and substitute "territory".
On the basis of research into this terminology I consider the term "country" is not the appropriate one and should be substituted with the word "territory".
I know the Minister has fairly strong views on this also. Nonetheless, he should have had an opportunity to examine the reason for my tabling this amendment and, hopefully, will have changed his mind.
These amendments relating to sections 200, 487, 826 and 828 are to be discussed together. Their purpose is to achieve uniformity of expression in the Bill by substituting the expression "territory" for references to "state" or "country".
While it is always desirable to achieve uniformity of expression in legislation, the fact is that sections 200, 487, 826 and 828 of this Bill have faithfully replicated the underlying legislation. Hence, in some cases the word "country" is used while in others "state" is used. Deputy Ferris now proposes that the word "territory" be substituted for the words "country" and "state".
The point may be made that the word "territory" is used elsewhere in the Bill and is an appropriate term to cover all jurisdictions. However, that is not sufficient reason for accepting the amendment. For example, the word "country" can mean a geographical area or one under a particular political jurisdiction, while the word "state" clearly means an area under a particular political jurisdiction. On the other hand, the word "territory" can be construed as having a much wider meaning than either "state" or "country".
There is ample precedent for a reference to "state" when referring to other countries, such as in Article 29.3 of the Constitution which contains the phrase "in its relations with other States".
Moreover, if we take the amendments proposed to lines 16 and 17 of page 1,132 of this Bill which deal with the negotiation of double taxation treaties with foreign states, I am of the firm view that the existing references to "state" and "foreign state" should remain. For example, a "Head of State", in the context of "the Head of a foreign State" has an international currency. The alternative "Head of a foreign territory" would at best be a somewhat awkward construction and, at worst, open to question.
However desirable it may be to achieve consistency in this Bill, to accept these amendments could run the risk of making a substantive change to the underlying law. We cannot take the risk of undermining the status of the Bill as a consolidation measure. Changes of the nature being sought by Deputy Ferris would be best pursued by way of substantive change to the law through the vehicle of the annual Finance Bill. Accordingly, I cannot accept them.
Amendment No. 8 is ruled out of order in that it would entail a substantive amendment of the statute law. The same applies to amendments Nos. 9, 10, 11 and 12.
I move amendment No. 13:
In page 514, line 2, to delete "sections" and substitute "section".
This amendment corrects a typographical error in section 372(3) where the reference in line 2 of page 514 to "sections" should read "section".
Amendment No. 14 in the name of Deputy Ferris is ruled out of order on the basis that it would entail a substantive amendment of the statute law.
I move amendment No. 16:
In page 714, line 40, to delete "islands" and substitute "Islands".
This amendment rectifies a typographical error in subsection (5) of section 495. In line 40 of page 714 the word "islands" should be capitalised.
Amendment No. 18 would require a substantive amendment of statute law.
Amendment No. 24 is in the name of Deputy Ferris. It is proposed to take amendments Nos. 24, 25, 28 to 36, inclusive, 42 and 43 together, by agreement.
I move amendment No. 24:
In page 1167, line 14, after "oath" to insert "or affirmation".
The purpose of these amendments is to remove the ambiguity in the Bill and to achieve adaptation of existing law and practice by making express provision for an affirmation which, in the case of a conscientious objection, is the legal alternative to the oath. The Minister's objections to these amendments on Committee Stage pose two serious difficulties. He relies on the Interpretation Act which states that "oath includes affirmation" - paragraph 20 of the Schedule refers. However, this applies only in the case of persons for the time being allowed by law to affirm instead of swearing. Such permission is given in relation to legal proceedings by the Oaths Act, 1888, but there is no such permission for the purpose of tax administration not involving legal proceedings to which the Oaths Act, 1888, does not expressly apply. This can be verified in the 1990 report of the Law Reform Commission on oaths and affirmations — pages ten to 12 refer. The second difficulty with the Minister's argument is that while "oath" and "swear" are covered by the Interpretation Act, "oath" and "swears" are not and there is no reference in the Act to cognate the words being construed accordingly. The alternative amendment referring to the Oaths Act is also designed to address this problem as an alternative approach and is based on section 18(2) of the Juries Act, 1976. We submitted the legal arguments to the Minister so that he would have an opportunity to understand the reasoning behind the amendments. I hope he will be in a position to accept them.
The Deputy's intention is to remove ambiguity and inconsistency from the Bill by making express provision for an affirmation which, in the case of conscientious objection to taking an oath, is the legal alternative to an oath. I indicated in select committee that the Interpretation Act, 1937, already makes express provision for the term "oath" to include "affirmation" and for the term "swear" to include "affirm" in every Act of the Oireachtas. The provisions of the Interpretation Act, 1937, apply in the case of persons for the time being allowed by law to affirm instead of swearing.
The Deputy makes the point, of which I was not aware during the select committee debate, that the provision which allows a person to affirm instead of swearing is the Oaths Act, 1888, and that the permission given in that Act applies only for the purposes of legal proceedings. The result is that the provisions of the tax code which do not involve legal proceedings but which provide for the swearing of an oath are not covered by the Oaths Act, 1888. Accordingly, in such cases it is not permissible to affirm or declare and a person must swear. This is not an acceptable position and I propose to rectify matters at the most opportune time. However, the gap in our tax legislation identified by the Deputy is not one with which we can deal in the course of consolidation. Deputy Ferris identified a lacuna in the law and substantive legislation will be required to put it right. To accept this amendment would be to accept a substantive change to the underlying law. Accordingly, I oppose it. However, I assure the House that I will examine this issue in the context of the Finance Bill with a view to rectifying the matter. In the context of tax generally there may be similar defects in some of our other tax codes and I need to consider this aspect of the matter also. I thank Deputy Ferris for identifying this lacuna in the law. I cannot accept his amendment now because it would make a substantive change to the Consolidation Act but, in the context of the next Finance Bill, I will so do. This error may also arise in another branch of tax legislation.
I appreciate the Minister's response because a great deal of research was carried out which resulted in the discovery of this lacuna. I am satisfied the Minister will address this matter as soon as possible, perhaps in the Finance Bill. If lacunas are discovered in other Acts we will have served some useful purpose by proceeding along these lines.
Amendment No. 26 cannot be debated as it would require a substantive amendment to the statute law. The same applies to amendment No. 27.
I move amendment No. 37:
In page 1327, line 22, before "marriage" to insert "a".
This amendment corrects a typographical error by inserting the indefinite article before the word "marriage" in subsection (3) of section 1026. Line 22 of page 1327 of the Bill refers.
Amendment No. 38 is in the name of the Minister. Amendment No. 40 is related, No. 39 is an alternative to No. 38 and No. 41 is an alternative to No. 40. Amendments Nos. 38 to 41, inclusive, to be taken together, by agreement.
I move amendment No. 38:
In page 1329, between lines 17 and 18, to insert the following:
"(1) In this section, ‘spouse' shall be construed in accordance with section 2(2)(c) of the Family Law Act, 1995.".
These amendments, two in my name and two in the name of Deputy Ferris, are related and are to be discussed together. The amendments propose to insert a definition of "spouse" into sections 1030 and 1031 of the Bill. Section 1030 consolidates the provisions of section 72 of the Finance Act, 1997, which deals with the capital gains tax treatment of disposals of assets made on foot of separation orders or foreign divorces. Section 1031 consolidates the provisions of section 71 of the Finance Act, 1997, which deals with the capital gains tax treatment of disposals of assets made on foot of divorce orders granted by the Irish courts. In the Finance Act, 1997, measures were designed to bring into the corpus of fiscal law the provisions of section 52 of the Family Law Act, 1995 and section 35 of the Family Law (Divorce) Act, 1996. However, the definition of "spouse" in section 2(2)(c) of each of those Acts, necessary for those provisions to have effect, was not copied in the Finance Act, 1997 measures. The amendments are designed to rectify those omissions. As my amendments achieve the goal sought by Deputy Ferris's amendments, I ask the House to agree to my amendments.
They meet the point I was making in a different way and I thank the Minister.
I move amendment No. 40:
In page 1330, before line 1, to insert the following:
"(1) In this section, ‘spouse' shall be construed in accordance with section 2(2)(c) of the Family Law (Divorce) Act, 1996.".
I move amendment No. 44:
In page 1346, line 20, to delete "a felony or misdemeanour" and substitute "an offence".
I outlined why legally this may be a more appropriate term of reference. I hope the Minister will consider it on the basis of removing whatever ambiguity may exist.
The amendment proposes to replace the reference to "a felony or misdemeanour" in section 1070 with a reference to "an offence". It is prompted by section 3 of the Criminal Law Act, 1997. Section 3(1) of that Act provides for the abolition of all distinctions between felony and misdemeanour while section 3(2) establishes that on all matters on which a distinction had previously been made between felony and misdemeanour, the law and practice in relation to all offences will be that applicable at the commencement of the Act in relation to misdemeanours.
I oppose the amendment for two reasons. First, it is inappropriate because the Criminal Law Act, 1997, did not come into operation until 22 July 1997, while the provisions of the Taxes Consolidation Bill will effectively operate from 6 April 1997. The amendment, if accepted, would therefore operate on a retrospective basis for a period in which there would have been distinctions between felonies and misdemeanours. As such the amendment would make a substantive change in the underlying law.
Second, the Criminal Law Act, 1997, did not abolish the concept of "felony" and "misdemeanour"per se. The Act abolished all distinctions between the two concepts and further provided that where there was previously a distinction made between felony and misdemeanour, including in the mode of trial, the law and practice in relation to all offences will be that appropriate to a misdemeanour. In light of the wording of the Criminal Law Act, 1997, it is too simplistic to take the approach that “felonies” and “misdemeanours” have been abolished. In the circumstances the amendment could have the unintended result of changing the current law and thereby possibly having an adverse effect on current efforts to bring criminal proceedings in the area of tax evasion. I oppose the amendment for these reasons.
The purpose of the amendment is to achieve the adaptation of existing law and practice by taking into account the enactment of the Criminal Law Act, 1997, and consequent abolition of "felony" and "misdemeanour". These categories were abolished by section 3 of that Act which was enacted on 22 April, 1997. It is now the law, having commenced on 22 July 1997. Reference to "felony" or "misdemeanour" in existing law would appropriately be to "an offence". The amendment reflects existing law. In any case it is wrong to refer in a Bill to categories of offences which have been abolished. The amendment involves no change in the intended scope of the section.
I agree with the Minister on this matter. It is dangerous in a consolidation Bill to change terminology which could be subsequently subjected to legal challenge. We have the recent example of the effect of the Houses of the Oireachtas attempting to abolish common law offences. Fortuitously, the Director of Public Prosecutions and the Garda Síochána simultaneously charged the kidnappers of Mr. Lacey with firearms offences. Otherwise, the gentleman involved would have walked free. We should be careful in a consolidation Bill about importing new terminology or material. However, if on reflection the Minister feels there is merit in Deputy Ferris's argument, as was the case in a previous amendment, a commitment to study it and deal with it in the context of the 1998 Finance Bill would be a prudent way to approach it.
Deputy Noonan has put the matter succinctly. I cannot afford to take the chance because it may have an unintended result. As Deputy Noonan pointed out, there was an example this week of an unintended result arising from a change in the law in a specific area. I will have the matter examined further and if it is appropriate, it will be dealt with in the 1998 Finance Act.
There is no intention in the amendment to change the scope of the section, but to tidy up this area. However, I accept the Minister will reconsider it in the context of future legislation.
I move amendment No. 45:
In page 1357, line 8, to delete "assessor" and substitute "assessment".
The amendment relates to section 1081(1). Its purpose is to correct a typographical error in line 8 of page 1357. The reference in that line to "assessor" should be a reference to "assessment".
Amendments Nos. 46 and 47 are out of order because they would mean substantive amendment of statute law.
Amendments Nos. 48 to 51, inclusive, are related and may be discussed together. Is that agreed? Agreed.
I move amendment No. 48:
In page 1417, line 7, to delete "Minister for Health" and substitute "Minister for Health and Children".
Amendments Nos. 48 and 49 rectify incorrect ministerial title references in the Bill.
Deputy Ferris's amendment No. 50 arises as a consequence of our agreement on Committee Stage to an amendment to change the reference in section 862 to Secretary of the Department of the Department of Finance to Secretary General of the Department of Finance. That amendment was necessary because of the enactment of the Public Service Management Act, 1997, which changed the title of heads of Departments from Secretary to Secretary General. The Public Service Management Act, 1997, commenced on 1 September 1997, whereas the Taxes Consolidation Bill has an effective commencement date of 6 April 1997. Hence, it is necessary to retain the reference to Secretary of the Department of Finance in the period from the commencement of the Taxes Consolidation Bill to 31 August 1997. Deputy Ferris's amendment No. 50 achieves this objective.
On Committee Stage we also agreed to amendments moved by Deputy Ferris to change references in section 667 of the Bill to University College, Dublin and University College, Cork to the National University of Ireland, Dublin and the National University of Ireland, Cork, respectively. The amendments arose as a consequence of the Universities Act, 1997, which changed the title of various educational institutions. The Universities Act, 1997, commenced on 16 June 1997, whereas the Taxes Consolidation Bill has an effective commencement date of 6 April 1997. Hence, it is necessary to retain the references to University College, Dublin and University College, Cork in the period from the commencement of the Taxes Consolidation Bill to 15 June 1997. Amendment No. 51 in Deputy Ferris's name achieves this objective. I ask the House to agree to amendments Nos. 48 to 51, inclusive.
I thank the Minister for accepting the amendments.
I have a problem with the logic of amendments Nos. 48 and 49. It appears every time there is a change of Administration, the titles of Ministers and Departments also change. While it appears at face value that something modern is being done in bringing the terminology up to date with the last change of Government in June, there is nothing to say that the title of the Department of Health will not change again quickly. For example, there is a very strong case for calling the Department of Health the Department of Health and Social Services, as it is called in the United Kingdom, rather than the Department of Health and Children. While "Department of Health and Children" describes many of the functions of that Department and Minister in those areas, it is within the wider remit of that Department to look after social services. The consolidation Bill, as the Minister said on Second Stage, is a job for a generation. It is not something that we will return to year after year. The last such Bill was in 1967.
It would be better if this Bill's terminology stood the test of time in respect of Ministers and their titles and this should be done in the definitions section, where the Minister of Health could be defined as the Minister who, from time to time, carried out the functions of the Minister of Health or any other Minister carrying out these functions. That is a better approach, because what looks up-to-date now could be changed by a new Taoiseach or the present one in six months or three and a half years for reasons of modernity, to give the impression of activity when none is taking place or for the sake of public relations. We would then have a consolidation Bill that is no more permanent than this.
There are descriptions of Departments which do not change that much, no matter what tricking is done with their titles by a Minister. I do not intend to call for a division on this amendment, but the Minister should have stuck to the position he adopted on Committee Stage. He could have accommodated Deputy Ferris's view and the desire to call Departments by names in current usage. It would be better to have an addendum to the definitions rather than the amendments now proposed.
I understand Deputy Noonan's point but I tabled this amendment to achieve adaptation of the existing law and practice by taking account of the new terminology under the Public Service Management Act, 1997, which took effect on 1 September 1997, Statutory Instrument 339/97. I tabled this amendment for that reason and because it is consequential on the acceptance of Committee Stage amendment No. 110. I am pleased the Minister has accepted this amendment because it is a more fundamental issue than the changing of Minister's titles due to the Public Service Management Act.
Amendments Nos. 48 and 49 relate to Deputy Noonan's point and amendments Nos. 50 and 51 relate to Deputy Ferris's comments on the title of the Secretary of the Department of Finance.
Deputy Noonan has a point regarding the names of Departments. He is right in thinking that possibly in the lifetime of this Administration someone will think of a good reason to change Department names. The Department of Finance would have had its name changed a long time ago but for the fact that it is the only Department referred to in the Constitution, which states that the Minister responsible for the Department of Finance can do certain things.
We were advised that, in regard to Department functions, the latest names were the best ones to use in the consolidation Bill. The difficulty with approaching this matter in the definitions section of the Bill is that as different Governments come to power, they change the functions of various Departments. We accepted the advice offered to us on name changes but there is legitimacy in Deputy Noonan's view.
I have explained that I am accepting Deputy Ferris's amendments relating to the title of the Secretary of the Department of Finance because of the starting dates of the consolidation Bill and the Public Service Management Act.
I move amendment No. 49:
In page 1517, line 7, in column (1) of the Table, to delete "Minister of" and substitute "Minister for".
I move amendment No. 50
In page 1517, after line 36, to insert the following:
"Construction of reference to Secretary General of Department of Finance
30. A reference in this Act to the Secretary General of the Department of Finance shall, in respect of the period from the commencement of this Act to the 31st day of August, 1997, be construed as a reference to the Secretary of the Department of Finance.".
I move amendment No. 51:
In page 1517, after line 36, to insert the following:
"Construction of certain references to educational institutions
31. A reference in this Act to an educational institution mentioned in column (1) of the Table to this paragraph shall, in respect of the period from the commencement of this Act to the date mentioned in column (3) of that Table opposite that mention in column (1), be construed as a reference to the educational institution mentioned in column (2) of that Table opposite that mention in column (1).
TABLE
|
(1) |
(2) |
(3) |
|
National University of Ireland, Dublin |
University College, Dublin |
15th June, 1997 |
|
National University of Ireland, Cork |
University College, Cork |
15th June, 1997 |
I thank Deputies for their assistance in passing this Bill. It is the most important Bill ever put through the House and I thank Deputies who contributed on Committee and Report Stages. In particular I thank Deputy Ferris and his back-up team. I know the person involved and I ask Deputy Ferris to pass on my best wishes to him.
