This is a consolidation Bill and I do not propose to detain the House for long in expressing my views on it. I congratulate the officials from the Department of Finance and the Revenue Commissioners who have been so assiduous in putting this together. The Taxes Consolidation Bill, 1997, was, in many ways, a magnum opus and the officials could have been forgiven for resting on their laurels and not finishing the job by drafting the stamp duties Bill. I am glad, however, they did not do that but have brought together this particularly good piece of work. I offer my congratulations unreservedly to them. Without wishing to carp or be negative, they should flaunt their laurels a little, to mix my metaphors, when they next pass the Department of Justice, Equality and Law Reform. Areas of our criminal law would benefit hugely from being consolidated, not least of which are relatively non-contentious areas such as road traffic legislation. If the energy shown by the officials from the Department of Finance and the Revenue Commissioners were brought to bear elsewhere, we would all be the better for it.
I do not intend to say a great deal on this consolidation Bill. However, I invite the Minister to share his thoughts on several issues, either today or on Committee Stage. In a recent conversation, one of the Minister's officials – who is not here today but would be known to the officials present – said that stamp duty was a truly wonderful tax because it increased incrementally every year without the need for the Minister for Finance, or anyone else, to do anything with it; the thresholds were set in stone and had not been changed in decades but the tax take continually increased as long as house prices increased, which they consistently have done in the past decades. For many years that argument held good and Ministers for Finance benefited from it, but given the current state of the Exchequer's coffers there is a case for looking anew at the argument for indexation. The principle of indexation has been accepted in the case of capital gains tax and the thresholds for capital acquisitions tax. In relation to the CPI or, more meaningfully, the increase in house prices, the possibility of indexing the thresholds for stamp duty should be considered.
More recently, in the wake of the first Bacon report on the housing crisis the rates of stamp duty charged were changed in the Finance (No. 2) Act, 1998. I would be interested in hearing either on Second or Committee Stage the Minister's reflections on what has happened since. The specific purpose of the changes was to remove the incentive for investment in housing property by removing the exemption from stamp duty and to increase it for those who wanted to buy for the purpose of living in it. There were indications in the months immediately following the introduction of the Act that it had some effect, that the rate of increase in new house prices had slowed down and in some cases plateaued. That seemed to change around the turn of the year and there is no indication at this stage that the changes have had any long-term positive effect. As the Minister of State is aware, the Minister undertook at the time to review the operation of the changes within a relatively short space of time to ascertain if they had been effective. There is a need to refocus the thrust of stamp duty, not on assisting the construction industry, the traditional focus, but on assisting individuals seeking to buy houses. Rather than exempting new houses from stamp duty the Government should seek to exempt first-time purchasers. That argument still holds good.
On more trivial matters, why is stamp duty charged on documents such as the assignment of life insurance policies? The stamp duty chargeable is only £10. I do not understand the reason for it. From a purely revenue point of view, it seems there can hardly be an argument in favour of stamp duty on ATM cards or cheques. What are the Minister's reflections on the matter?
On a more serious issue, the Minister will be aware that the argument has been made by business in recent months and years that the stamp duty charged on share transfers, more popularly called companies' capital duty, should be reduced, if not eliminated. It is currently charged at a rate of 1%. I see no persuasive argument why this should be the case. It seems that share transfers and Stock Exchange activity are proceeding apace, notwithstanding the rate of duty charged on share transfers, but the case has been made by the industry and the Stock Exchange. I would be interested in hearing the Minister's view.
As the Minister is aware, in my former existence I was a practising solicitor. In presenting a document for stamping is one required to present a PD – particulars delivered – form. I would be interested in knowing what this document is for. Certain information is required in regard to a particular transaction from the purchaser and the vendor, including their RSI number, which is a recent development. Does this contribute to an information bank in the Revenue Commissioners and to what use is it put?
I am conscious of the good work done by the Revenue Commissioners on the Bill, for which I congratulate them. We will facilitate passage of the Bill not just now but also on Committee Stage.