Much of what the Institute of Taxation prior to the amendments being published. To put on the record for the benefit of the Seanad, this section re-enacts section 15 of the Stamp Act, 1891 in the form which makes it more relevant to today's current taxation practice. Little has happened with stamp duty since 1891. There have been some changes but not many.
The section is the primary provision concerning penalties for the late payment of stamp duties and the late delivery of instruments for stamping. The existing section 15 of the 1891 Act has two kinds of penalties. First, it provides an interest penalty of 5 per cent per annum for the late payment of duty. This interest is intended to compensate the Exchequer for the cost associated with the late receipt of the tax. It has not been increased since 1891 and is clearly insufficient given the present level of interest rates. It is now proposed to increase the interest rate from 5 per cent per annum to 1.25 per cent per month or part of a month. This is the rate applying to late payments for most other taxes.
The second penalty provided by the 1891 Act is to double the duty payable where an instrument is not stamped within 30 days of execution. This penalty applies to instruments which account for most of the stamp duty yield. In the early years of this century this provision fell into disuse probably because of its severity. The intention behind this section in the Bill is to bring back into practical application the use of a penalty for late presentation of documents. This is a very useful role to play in creating a proper compliance climate. Similar penalties and surcharges are imposed under other taxes for late delivery or non-delivery of returns.
In stamp duty the instrument to be stamped is effectively the return for tax purposes. Accordingly, it is proposed to preserve this separate penalty while scaling down its severity. Where an instrument is stamped later than 30 days, but no later than six months after it is first executed, a penalty of 10 per cent of the duty payable would be imposed in addition to any interest charges. Where an instrument is stamped between six and 12 months late the penalty would be 20 per cent of duty payable. An instrument stamped 12 months or more after execution would attract a penalty of 30 per cent of the duty payable. It will be the practice of the Revenue Commissioners, if this provision becomes law, to impose it where instruments are presented late for stamping. Inevitably, there will be taxpayers or their agents who will, though acting in good faith, find that the penalty applies to them. The Revenue Commissioners have a discretion in such cases, depending on the particular circumstances, to mitigate the penalty. Section 100 shall come into operation with effect as and from 1 November 1991 and will apply to any instrument, whenever executed, which is unstamped or insufficiently stamped. I want to make it clear to the Seanad, as I did in the other House, that there is no question whatever of any retrospection applying in this situation.
On the question raised by the Senator in relation to the appeals system, appeals in relation to stamp duty arise in two circumstances, first, where valuations of property or non-quoted shares are disputed and, secondly, where the point at issue is one arising from conflicting interpretations of stamp duty law. In the vast majority of cases, where valuation of properties submitted to the Revenue Commissioners for stamp duty purposes is not acceptable to them, the matter is resolved through the intervention of the Valuation Office. If, however, a taxpayer is dissatisfied with the value placed on the property by the Valuation Office, then he or she is entitled to bring his or her case before the Land Values Reference Committee, which will appoint an arbitrator to decide the issue.
Further stages of appeal to the Circuit Court and the High Court are also provided for. In instances where the valuation of non-quoted shares is disputed, the taxpayer may present his case to the appeals commissioners. Again, in this case further appeals may be directed to the Circuit Court and the High Court. Disputes relating to matters of law like those relating to questions of valuation are normally resolved without recourse to appeal. In the event, however, of failure to resolve the matter to the taxpayer's satisfaction a right of appeal directly to the High Court is provided for.
The stamp duty appeals procedures have worked well in the past and have provided a satisfactory and practical way of resolving disputes between taxpayers and the Revenue Commissioners. I would also stress that an overwhelming majority of the stamp duty assessments which are made do not result in the appeals procedures being used. There is nothing in the proposed new stamp duty legislation which would make the existing appeals procedures any less effective or which would necessitate the introduction at this time of additional safeguards to the many which already exist in this area. However, if it should emerge in the future that the absence of an appeal to the appeals commissioners on a point of law is creating a serious problem for taxpayers I will certainly review the situation.
