Could the Minister give the House some information as to the buoyancy or elasticity of income tax? He was rather disquieting when he said, on one occasion, that we had reached the limit of a fertile yield on this tax. It is a tax which gives an index of the amount of our taxable resources. Perhaps the Minister could give the House some general information on the subject, and some indication of the amount of arrears he is looking for. The Minister, on one occasion, mentioned the very large sum that he expects to get from arrears of excess profits duty and from taxes in one form or another. So far as I know, he has not budgeted for anything like the sum he mentioned. Generally, any information the Minister could give us of possible arrears on current yield would be appreciated.
Finance Bill, 1933 (Certified Money Bill)—Committee.
I regret that at the moment I am not able to give the Senator the information he asks for except in this general way: that the receipts from income tax and property tax generally have not been disappointing. In fact, they realised the estimate on which last year's Budget had been based. On the question of the amount which we hope to get from excess profits and other back duty cases, we expect that eventually we will get about £2,000,000. That necessarily will not be collected in one year. In fact the rate of collection will depend on the rate at which the accountants can supply to the investigation branch of the Revenue Commissioners the necessary statement of accounts to enable the Revenue Commissioners to assess defaulters for back duty. We anticipate that the yield in general will be of the order of £300,000 or £400,000 per year. The probable yield from back duty cases is taken into consideration in preparing the estimates for income tax and property tax generally and is duly credited under the various headings which appear in the returns from time to time.
On the Second Reading of the Bill, I asked the Minister a question with regard to the entertainment tax on Rugby and Association football: whether he would deal sympathetically with my suggestion either to remove the tax altogether next year, or to reduce it to a figure which would allow those clubs to expand as clubs in the country that play other games are allowed to expand. I do not think he was able, in the course of his reply, to deal with that particular subject, but possibly he may be able to tell us now what he has been able to do.
I would like to support the appeal of Senator The McGillycuddy so far as Association football is concerned. I think it is safe to say that in Dublin, for instance, more people, ordinary workers and others, follow Association football than any other game. The entertainment tax is really a tax on them and not on the promoters of the game. The same can be said, but to a lesser extent, of Rugby, which is now played in most counties. Even in Munster there are scores of Rugby clubs. An ex-member of this House was lately running a Rugby team, all the members of which were Irish speakers. He would not allow any others into it. I think that is one of the best replies one could make to those who would condemn Rugby and wipe it out on the ground that it was not an Irish game and, consequently, that it was something to be condemned. Even the President of the Executive Council played Rugby, and he was none the worse nationalist or patriot for that. In any case, I do not think we should discourage outdoor sports of any kind. The nation that is strong physically and athletically is the nation that will eventually develop good clean minds amongst its people, and that will develop intellectually and culturally also. We notice that all the progressive nations around us are trying to develop outdoor sports of all kinds, and I think we should follow that very excellent practice. It keeps people from practices of a very less commendable nature and develops their bodies and incidentally develops their minds. It would be very unwise to discriminate between one sport and another. It is very difficult to keep people from playing the type of game that they desire and, provided it is not a game against the law, I do not think there should be any particular penalty imposed on them. I hope that the Minister, seeing that he has met quite a number of outdoor sports in this Budget, will, on the occasion of his next Budget, consider favourably the appeal made by Senator The McGillycuddy.
I am inclined to support the appeal as an old Rugby football player many years ago. I do not see why it should be penalised, and it does not seem to be very sensible. I am, of course, glad to see Gaelic football played, but to penalise one game for another is rather a useless business. I certainly would like to see these games free of extra taxation. I think it is a mistake to be taxing these sports, because, if the people want to play them, they will do so.
It seems to me that both Senator Moore and Senator O'Farrell have been under a misapprehension as to the purpose of this tax. The purpose of this tax is to raise money and not to encourage the playing of one game as against the playing of another. In fact, when the section was originally introduced in the Finance Bill last year, every game and every sport to witness which money is charged for admission was brought within the scope of the entertainment duty and had to pay tax correspondingly. It happened that the Gaelic Athletic Association, in very different times from those in which we are now living, had established, by the attitude they took up then, it seems to me, a prescriptive right to exemption from this duty, and, accordingly, they were exempted, but no other association during the period 1920 and 1921 had taken up the attitude they took up in regard to entertainment duty, and, accordingly, as they had paid entertainment duty to the British Exchequer in other days, it was felt that they could quite easily, in the difficult circumstances in which we find ourselves, pay it to-day.
I want to come back again to the point that the sole purpose of this section is to raise money. I have granted a considerable number of exemptions in this year because we found that the section in the case of these games was defeating itself. I am not able to say that in regard to a number of other games which are much more popular and the business side of which has been developed to a much greater degree. I feel, however, that, having exempted the Gaelic Athletic Association and having further exempted a number of minor associations controlling sports other than football and hurling, there is a certain anomalous element created under the duty as it stands at present, and I would be quite anxious to extend that exemption to games played under other codes and under other control, but I could not pledge myself in advance to do that. I could only do it if the financial circumstances warranted it. The first duty of a Finance Minister is to impose a tax and to look for the money where he feels he can get it, and the justification for continuing the tax on the games played under the Irish Rugby Football Union and the Free State Football Association is that a considerable amount of revenue is to be collected from the spectators who wish to see these games. The tax does not debar anybody from personally engaging in a pastime if he wishes to do so. It merely provides that if he goes to look at a football match, he has to pay in exactly the same way as he has if he goes to look at a motion picture.
Having said that, I should like to come back to the point that I feel that a certain anomaly exists, and I am anxious to get rid of it. I do not wish the Finance Act to have even the appearance of discriminating against one form of sport vis-a-vis another, and, accordingly, if the circumstances warrant it, I should be very anxious and very ready, either next year or as soon as possible, to enlarge the exemp tion which has been granted in this year's Finance Bill and to bring within the scope of the exemption all forms of outdoor sport. I am not able to go further than that at the moment.
The following two recommendations appear on the Order Paper in my name:—
Section 39, sub-section (2). To delete in line 39 the words "two years" and to substitute therefor the words "one year".
Section 39, sub-section (2). To delete in line 44 the words "two years" and to substitute therefor the words "one year".
I am particularly sorry that Senator Brown is unable to be present as these recommendations are of a somewhat technical character and he would have been much better able to deal with the problem than I. The recommendations are put down because of a fear that the effect of the sub-section would be to hold up the distribution of the assets of deceased persons, who might possibly be liable to income tax for two years instead of one. I understand from Senator Brown that, under the law applicable to executors and administrators, they have one year to get in estates, pay duties and distribute the surplus to the legatees or next-of-kin. After the expiration of one year they are liable to an action for administration by the court, and they may be made liable for the costs of this action. There is, of course, nothing in this sub-section to deal with that possibility. The danger is that the effect of the sub-section in the case of estates insolvent as to creditors would be that the estate would be wound up by the court with inevitably increased cost and less money available for the creditors. In the case of an estate insolvent as to legacies, the position might not be quite so serious but, there again, it might lead to a certain amount of loss. I am in a difficulty with regard to these recommendations. I have had some conversation with responsible persons in the Revenue Department, and I am assured that the general intention is to get this matter settled up as quickly as possible in the case of estates where there is a possible danger of their being liable to excess profits duty, which, of course, means profits made somewhere about 14 or 15 years ago. There is the danger in these particular recommendations, I am told, that if the period is reduced to one year, the Revenue Commissioners would be forced to make that assessment within one year and that in the case of estates in which there is a doubt or in which the assessment is made and is being disputed, it would, generally speaking, be in the interests of the executors and the estate to have that amount reached by agreement, and that one year might easily work in the contrary direction to that which I desire. I am not satisfied that a difficulty does not exist in regard to the law but, nevertheless, with the leave of the House I do not propose to move these recommendations. I think that in view of the doubt that exists it would be impossible for me to go further into the matter, but I should like to put it to the Minister that it is a matter that should be borne in mind by the Revenue Commissioners. The reason I am making this statement so long is that I know that the two years period has not been inserted in this Bill for the purpose of unduly harassing executors, but to make the matter as easy as possible.
There is one other point, and I should rather like to have this confirmed if possible by the Minister. It is that it should be made perfectly clear that the fact that an executor applies for a certificate that there is no further liability for excess duties should not be taken in any way as a suggestion that he is suspicious in his own mind that there is any such liability. Many executors would be frightened to go to an inspector and ask him for a certificate that income tax has been paid for a back period of years for fear it would seem that they themselves thought that there was some tax due. If it could be made quite clear by the Minister that the request for such a certificate on the part of an executor would not be so regarded, I think it would meet my case. At any rate it is always a mistake to send forward a recommendation where there is any doubt. I have not had the benefit of the advice of Senator Brown owing to his unavoidable absence and while I still think there is a difficulty which requires to be looked into, I think it better to leave the matter to, shall I say, the tender mercies of the Revenue Commissioners and trust them to look into the matter and to do their best. With the leave of the House, I propose to withdraw these two recommendations.
On the second point raised by Senator Douglas, that the Revenue Commissioners should not regard an application by an executor for a certificate as being tantamount to a declaration that he himself had reason to believe or suspect that excess profits duty was due by the estate, I have no hesitation whatever in giving that undertaking on behalf of the Revenue Commissioners. The manner in which they will look at that application at the outset when it is made by the executor will be that it is a normal step for him to take in order to safeguard himself from the consequences in which a neglect of the section might involve him. At the same time, I do not want it to be understood that if the executor does apply for a certificate such a certificate will be issued merely as a matter of course or as a matter of form. It will be necessary for the executor in these circumstances to produce to the Revenue Commissioners all the information they require in order to satisfy themselves that a certificate may properly issue.
I am satisfied with the first portion of the Minister's statement, but the latter portion of it, while I would probably make the same statement myself if I were Minister for Finance, has brought me to my feet again. I think it is no harm to mention that these recommendations did not originate in my head or in the head of Senator Brown but were caused by a certain amount of uneasiness which was expressed by responsible people outside. In the case of an executor for the estate of a deceased, who may have been a partner in a business existing, say, 15 years ago, he will almost certainly not be in a position, without very great expense, to produce the evidence and it should, I think, be possible for the Revenue Commissioners, on a request for a certificate, and after a reasonable time, to give that certificate where they have no reason whatever to suspect. Obviously, if, on a request for a certificate, they ask him for information the executor has to find it. To say that in every estate, where a person might in some way have been interested in a business, liable 15 years ago to excess profits, his executors will have to produce this evidence with the application would make the position almost impossible for the executors. I feel sure that the matter will not be dealt with in that rigid form, but I mention it because there might be a great deal of uneasiness caused.
Could the Minister say why it is necessary every year to pass a section such as this, placing all taxes and duties under the care and management of the Revenue Commissioners. Is there any hidden meaning in specially enacting that in this Bill?
If I had notice that Senator Sir John Keane was interested in this matter, I should probably be able to give him a much more satisfactory answer and much fuller information on the point. The position is that the re-enactment of this section of the Finance Bill attaches to the specific duties enacted by the Bill and their collection the privileges that formerly attached to the collection of these duties under the Crown. That is, I understand, in brief the reason why this form of words is always enacted in the Finance Bill. As to what these particular privileges might be I am afraid my knowledge of the Statute Law of England and possibly of the Constitutional and Common Law, will not enable me to explain the matter in detail. This is an annual enactment.
I am quite satisfied.
On this schedule, I should like to draw the attention of the Minister and the House to the constant appearance of what I suggest is this very objectionable provision for licences. We have had this on two or three occasions and one Minister himself expressed the hope that it would be possible either to abolish this licensing system altogether, or in some way give publicity to such licences as were granted. As you will see, in respect to a number of these duties, the Minister has power to license under any conditions he sees fit, any particular person. I suggest that is a most dangerous extension of an administrative or a bureaucratic power. It is largely undermining the authority and power of Parliament. We had hoped that it would only be transitional but if now appears this thing is going to become chronic. I do wish the Minister would look at it in this light and, if possible, give us an assurance that there would be an end of a very drastic restriction in this power of licensing individuals without any knowledge on the part of the general public or even knowledge on the part of their competitors in business.
I suppose at this stage one may be allowed to grumble a little. I wish the Minister could manage to get the Customs authorities to act a little more quickly than they do. They are very slow. As an instance, I may say I know of a case in which a few pieces of silver plate which were made in this country were brought over to England a short time ago and were subsequently sent back here. A question was asked of the commissioners whether duty would be charged on the silver when it was brought back. The particular commissioner concerned said he did not know but he would find out in two or three days. Later the question was asked again but he still had not found out. At the end of three weeks the owner was told that the question had to be referred to the board. The value of the articles was only about £20, but although they had been made in Ireland, it took a whole month to ascertain whether the customs duty was to be imposed. It was decided eventually they were not to be imposed but it should not have taken a month to discover a simple thing like that.
It is not usual for me to have to defend the Government against an attack by Senator Colonel Moore, but I should like to say that my experience has been that the improvement in the last 12 months in the manner in which the Customs authorities deal with this matter has been very marked as compared with the previous period. I think the delays originally were due entirely to the fact that you had an enormous number of tariffs and an extraordinary variation in tariffs. It was practically impossible for the Revenue Commissioners, in such circumstances, to deal with these matters expeditiously, having regard to the amount of work that was placed in their hands. The delays were due also partly to the fact that the ordinary public, such as the Senator and myself, are slow to conquer the extraordinary intricacies involved in filling up forms adequately. I should like to say that it is the experience of traders generally that a very definite improvement has taken place. Even when there were difficulties, I do not know that the staff were to blame, although you will always have men, stupid men, who make errors in every Department. These delays were practically inevitable in the circumstances.
My principal object in rising is to raise a matter which I raised previously in this House and which deals specifically with the point raised by Senator Colonel Moore. I do think it would save a good deal of time and aggravation on the part of members of the public—while it would cost a little money to commence with I think eventually it would be well worth the expense—if some kind of office could be set up in Dublin where it would be possible to deal simply in advance with inquiries as to the duty which is applicable to specific articles. If you want an article of furniture that is made entirely of wood the matter is perfectly simple. You can buy a book which is tolerably up to date, if any book dealing with such matters can be up to date, showing the number and variety of the duties. The last book that came out in regard to this matter was out of date before it could be printed. That, however, could not be helped. It is sometimes extremely difficult to know, if you are getting any smaller articles, under what heading they will come and what duty will apply. I know that there has been a number of complaints similar to that made by Senator Colonel Moore and I think there should be a special office set apart for the specific purpose of dealing with inquiries of that kind. It is true that you get every courtesy from the Customs officials, but after all their job is not to deal with inquiries. Their job is to assess the duties on articles coming in. I think it would be a great help if there was a small staff of officers who could give advice on this matter. I raised this matter before and the Minister for Industry and Commerce said that he would take it into consideration to see if something could be done.
There is one other suggestion I would like to make to facilitate the public. An official import list is issued from time to time. I think it would be a great help if, on the first of every month, a list of corrections in that list could be published so that a firm could buy that corrected list, pin it to their import list, and find out exactly the changes made during the month. Where a person is importing a large variety of articles it would certainly be an advantage if such a list could be obtained. Possibly it may be obtainable but the general public are not aware of it. I should also like to refer to the point raised by Senator Sir John Keane. As a Senator, I have an enormous sympathy with the point of view he expressed, but as a person interested in some manufactures I know perfectly well that the worst thing that could possibly be done would be to withdraw the licences. We have had an intensive scheme of tariffs without any preliminary examination. Even after an examination by a Tariff Commission you get errors. If there was a public examination manufacturers who might be affected in their manufactures—I am referring to manufactures in which articles are used that are liable to duty—would have an opportunity of putting their case and a special arrangement might be made to meet the circumstances. Where you have tariffs applied without any public examination, the manufacturer does not know, until he reads it in the papers, that a tariff has been imposed. If there was no system by which he could apply to the Minister for a licence to import these articles he might find himself in an impossible position. That would seriously injure the manufacturers of the country.
I am not yet satisfied that the licences must be secret. I do not think it would be fair to ask to have them published in the daily papers every day, but I personally cannot see why, within a certain time after the issue of the licence, it would not be possible to go to the Custom House or some place of that kind to see a list of these licences. I know there are great difficulties in dealing with these matters and my own experience is that they are dealt with as fairly and as expeditiously as possible. If you want a licence for a particular article and you go to the officials of the Ministry of Industry and Commerce, they will be able to tell you almost certainly and promptly the conditions under which such licences can be granted. Generally the conditions are that the article is not made in Ireland and that you require it for the purposes of manufacture. In certain cases there may be slightly different conditions, but you can find them out. You cannot abolish the present system of licensing, while you have a system of protection without very serious injury to the manufacturers of the country, but personally I am not quite satisfied that they must be secret.
I think that Senator Douglas has dealt fairly adequately with the point raised by Senator Sir John Keane. The licensing provisions have been introduced for the convenience and the advantage of taxpayers. If it were not for these provisions, it is certain that the Revenue Commissioners would have to charge duty on a number of articles which were not made here, but which were indispensable to the importer, articles which were possibly necessary for the establishment of a new industry or the extension of an existing industry. It is obvious that the Minister for Industry and Commerce, or myself, as Minister for Finance, never contemplated that duty would be imposed upon articles or commodities of this nature. I think the objection of Senator Sir John Keane to this provision arises, possibly, from the fear that in the administration of it some discrimination is made as between one applicant for a licence and another. I should like to assure the Senator that that is not so. The rule has been drafted and it is uniformly adhered to. Wherever a licence is granted to one person for the importation of any article, every subsequent applicant for a licence for the importation of that article, if conditions have not changed as regards manufacturing at home, will be granted a licence.
There is, I think, a good deal to be said for the suggestion made by Senator Douglas that a list of the licences issued should be published. I should say that it might be desirable to have a list of the articles in respect to which licences have been issued. I do not know whether it might not be unfair or be prejudicial to traders or manufacturers, in some way, if the fact that they have received licences was published to the general public. It would be an indication, possibly to some competitors, and, while it might not be a very valuable indication, it would be an indication of the nature of their business, and possibly the lines of manufacture that they proposed to develop. While I would hesitate to publish a list of the licensees, I think there is something to be said for publishing a list of articles in respect of which licences have been issued. As to the publication of a list of tariffed articles, I will look into that, but I think a month would be much too frequent. It might not appear to be excessively frequent last year, when there was a considerable number of new articles——
My suggestion was not to have a monthly list but simply to have a sheet which would indicate errors and changes in previous lists. A list was issued about the middle of December. I went through it, having the various Bills and Orders in front of me, and corrected it for my firm. It was comparatively easy for me to do that because I had the Bills which are sent to me. It would be difficult for the ordinary public to do it. In the list I referred to I had only to make about eight alterations, showing the changes in the duties on certain articles. If that was published each month or thereabouts it would be convenient. I believe the changes from the previous one would be very small. I did not mean to have a new list issued monthly.
There would be no objection to issuing a list of the sort required by Senator Douglas, but I would not like to bind myself to issuing it every month. As a matter of fact, I think changes in the tariffs will be less frequent than last year. It will be issued, at any rate, sufficiently often to be of value to the public. I could undertake to do that.
On the question of having an inquiry office, I am not so sure that that would be as valuable as the Senator thinks, because very often a great part of the delay, in matters of this sort, where people go looking for information, is that they first of all address a verbal inquiry, which it is very difficult to deal with in any office organisation, as the Senator no doubt knows; secondly, that the people who make the inquiry are not in a position to describe with accuracy the article they have in mind; and finally, a determination whether the article would be subject to duty or not can only be made when it is actually produced to the customs officer. It might be a source of annoyance, as much an inconvenience as a source of help for the general public, to have an inquiry office of the type suggested, because people would come and describe what would connote one article to the customs officers and when it was produced it would turn out to be something different. They would then say that they had been misled. I would not like to give any undertaking on that suggestion until it is more closely examined.
As to the point raised by Senator Moore I would like if he could give me particulars of the case in question so that I could have it examined. If a person has addressed a verbal inquiry to a customs officer and renewed it at intervals it is obvious that it cannot be expeditiously dealt with in a huge organisation like the Revenue Commissioners. Ultimately if the matter is in any great doubt it has to be referred to the Board for a decision. Possibly in this case, and in a number of other ones, which I have personally investigated, the blame cannot properly be placed upon the revenue staff, but on the manner in which the inquiry for information was made.
While on that I might possibly deal with another point which Senators may have had brought to their attention, and that is the delay in clearing the goods from the customs. I have had very many complaints on that score. I have had them investigated. Personally, I investigated the whole of this matter at the time the protectionist policy was being put in force, in June of last year. I must say that I could come to no other conclusion than that a great deal of the complaints were due, first to the general ignorance, not merely of the public with regard to procedure, but those acting as clearing agents for the public. Very often there had been failure to present dutiable articles and clearances in time, and they were not accompanied with the prescribed duty and forms which have to be filled in. While the importers ascribed all the blame for the delay to the Revenue Commissioners, nevertheless a great part of it was due to the fact that those who had been appointed as then agents to clear the goods failed to take the necessary steps, and to pay the duty. The moment the duty is cleared on any article it is immediately marked for clearance, and the consignee can get possession. He cannot get possession until the duty has been paid, and the necessary particulars of the clearing notes furnished to the revenue officials.
The Schedules and Title agreed to.
Bill reported.