SECTION 126.

Question proposed: "That section 126 stand part of the Bill."

Is this the provision that will allow the publication of a list of tax defaulters every quarter rather than in any year? Has the Minister considered revising the figure of £10,000 and does he feel that the quarterly publication will achieve what he wants? Is there any evidence that quarterly publication will improve matters?

There is no proposal to change this.

What is the nationale behind the quarterly approach?

The purpose of the publication was to act as a deterrent by way of shame. If it comes out four times a year the prospect of shame is stronger; and if it comes out once a year, it is such an enormous tome that only the most prurient go through it.

On the matter of £10,000, some people have been on that list who should not have been there. It authorises a Revenue audit and an evasion might not have happened. A person might have only partially claimed an allowance or there could have been a dispute over staff mileage allowances that could have been settled. There are matters such as these which have nothing to do with evasion. However, if the total sum is above £10,000 that person's name appears on the list as if they were a Revenue defaulter evading tax.

The purpose of this was to deal with people who were deliberately evading tax. I have dealt with many revenue audits in my practice and there is some liability due in almost every case but it has nothing to do with evasion. That sum could easily come to over £10,000 which would result in that person appearing on the list of tax evaders which is unfair. They will end up on the same list as real evaders who have not declared deposit accounts, extra sales or whatever. It is very unfair to classify people in that way. I know some officers of the Revenue Commissioners agree that compliant taxpayers who send in their accounts every year should not be classified with people who have evaded tax for many years.

I take the Deputy's point. I am informed those lists cover all those upon whom a fine or other penalty was imposed by a court and all those in whose case the Revenue Commissioners accepted a settlement in excess of £10,000. Settlements are not published where the amount is less than £10,000 or where the taxpayer has, in advance of any Revenue investigation, voluntarily furnished complete information relating to undisclosed tax liabilities. Perhaps we could tighten that up.

I know those regulations very well and——

If somebody is subjected to an audit, over the course of which it emerges——

That they have been over allowing for expenses, for example.

There is invariably a difference of interpretation in the area of expenses.

And a deal is often struck.

Deputy McCreevy is saying that a taxpayer who at no stage attempted to hide or evade——

For example, the employees of a company might be given a subsistence allowance for lunch or travel which was disallowed in the course of negotiations. However, the amounts would be stated exactly in the company's books.

This seems to be a question of management rather than law. The figure of £10,000 is reasonable.

I have no problem with that figure for people who are deliberately evading tax. However, many compliant taxpayers end up with a liability of over £10,000 after the various negotiations about gross profit percentages, disallowances and so on. Such people end up on the same list as Joe Bloggs who has deliberately evaded tax.

Many people who are subjected to an audit feel they must agree the matter there and then. They would be far wiser to say they will think about it than agreeing so readily.

I have brought this to the Minister's attention before. Many Revenue officials felt they could not leave a place at the end of the week unless they had got some of the unpaid tax. They have eased off on that somewhat. That was unfair because those people were compliant taxpayers. Such people are being classified in the same way as people who have not been in the tax net for years and are involved in real invasion.

A professional person who submitted his accounts to the Revenue Commissioners might have "X" disallowed. Would the auditor draw to his attention that he was claiming less than the norm on "Y" and "Z"? Do auditors ever suggest that a taxpayer could pay less on some fronts?

The charter of rights is designed to address that issue. That is the practice. There might, however, be personality clashes in some cases which occur in the course of normal human behaviour. The Deputy is saying that the management of this must be handled properly.

There is a problem in that the outdoor audit officers' hands are tied in this matter. Most of them take a very reasonable approach and go out of their way to try to minimise the liability cases which are, strictly speaking, not ones of evasion but to do with disputes over various allowances.

I must declare a personal interest in this as a well known entertainer whom I know — although he is not a client of mine — ended up on the list last year or the previous year for a fairly large sum of about £250,000. He had to write to the newspaper to say the case arose out of a dispute about whether a particular scheme was allowable and that it was not a matter of evasion. Certain aspects of the Goodman tax issues arising out of the beef tribunal were also matters whose allow-ability was under dispute. The entertainer appeared on the defaulters' list as being liable for £250,000 but it had been disputed for years whether that scheme was a proper tax avoidance measure, which is not the same as evasion. It was never the intention that such people should be included on that list. The outdoor audit officers know that but their hands are tied if the sum is above £10,000.

I will get a report on that for Report Stage. We are not proposing to change the law — it is more a question of management practice. I have experience of a number of semi-State bodies and the Revenue Commissioners have moved from a position of being blind, deaf and dumb in regard to their customers to being the most customer focused organisation in the public service.

There has been a remarkable change over the past ten years.

They are maintaining those changes. There are personnel from the Revenue Commissioners present in this committee room and they have heard what the Deputy said. However, most of what he said relates to the management and administration of the existing law rather than changing the law.

The whole change in emphasis has been to everybody's betterment because taxpayers are now far more compliant and more anxious to keep their affairs in order. It has been a two way street.

So much so that, as an issue of public concern, the payment of tax has dropped to 4 per cent in the opinion polls, which is bad news for Deputy McCreevy's party. In a recently published opinion poll crime and unemployment were the two issues of most concern.

Tax and jobs are the same issue, and jobs are number one on the agenda.

Actually, crime is number one.

Yes, crime and employment.

Question put and agreed to.
Section 127 agreed to.
NEW SECTION.

I move amendment No. 112:

In page 121, before section 128, to insert the following new section:

"128.—(1) Section 242(1) of the Finance Act, 1992, is hereby amended in the definition of ‘licence' (as amended by the Finance Act, 1993)—

(a) by the substitution of ‘"licence" means a licence or authorisation, as the case may be, of the kind referred to—' for ‘"licence" means a licence of the kind referred to—', and

(b) by the insertion of the following paragraph after paragraph (g):

‘(gg) in section 93, 116 or 144 of the Consumer Credit Act, 1995;'.

(2) The Consumer Credit Act, 1995, is hereby amended

(a) in section 93—

(i) by the substitution, in subsection (10), of the following for paragraph (d):

‘(d) the applicant has failed to provide satisfactory evidence that a current tax clearance certificate in relation to the licence has been issued in accordance with the provisions of section 242 (as amended by the Finance Act, 1997) of the Finance Act, 1992,',

and

(ii) by the insertion of the following after subsection (10):

‘(10A)(a) Where in relation to a moneylender's licence—

(i) an application in accordance with section 242 of the Finance Act, 1992, for a tax clearance certificate has been made—

(I) not less than four months prior to the commencement date of such licence, and

(II) a tax clearance certificate has not yet been issued or refused,

or

(ii) a tax clearance certificate has been refused and an appeal against such refusal has been made and accepted in accordance with subsection (6) of the said section 242, and in either case, the licence could, but for the provisions relating to a tax clearance certificate, have been issued, then—

(I) in a case where a licence has been granted in respect of the previous licensing period, such licence may continue in force beyond its latest expiry date pending—

(A) the issue or refusal of a tax clearance certificate, or

(B) in the case of an appeal, the final determination of that appeal,

and

(II) in a case where a licence has not been granted in respect of the previous licensing period, a licence may be issued temporarily and remain in force pending

(A) the issue or refusal of a tax clearance certificate, or

(B) in the case of an appeal, the final determination of that appeal:

Provided that the amount of the fee that would be payable on the application for the licence is duly deposited with the Director.

(b) Every licence issued temporarily or continued in force in accordance with paragraph (a) shall, while it remains in force, be deemed to be a licence within the meaning of this section.

(c) Where—

(i) a determination is made to issue a tax clearance certificate, in respect of an application referred to in subparagraph (i) of paragraph (a), or

(ii) the final determination of an appeal referred to in subparagraph (ii) of paragraph (a) is to the effect that the application for a tax clearance certificate in relation to a licence is an acceptable application,

and where the tax clearance certificate has been issued, the licence continued in force or issued temporarily under this subsection shall expire upon the grant of a licence under this section and the duty deposited shall be set against the appropriate duty payable on the grant of the licence.

(d) Where—

(i) a determination is made to refuse a tax clearance certificate, in respect of an application referred to in subparagraph (i) of paragraph (a), or

(ii) the final determination of an appeal under subparagraph (ii) of paragraph (a) is to the effect that the refusal of an application for a tax clearance certificate in relation to a licence is a valid refusal,

the licence continued in force or issued temporarily under this subsection shall expire not later than seven days after such refusal or after the determination of such appeal, and the amount of any duty deposited in excess of the proportion of that duty attributable to the period when the licence was temporarily in force shall be repaid,',

(b) in section 116—

(i) by the substitution, in subsection (9), of the following for paragraph (d):

‘(d) the applicant has failed to provide satisfactory evidence that a current tax clearance certificate in relation to the authorisation has been issued in accordance with the provisions of section 242 (as amended by the Finance Act, 1997) of the Finance Act, 1992,',

and

(ii) by the insertion of the following after subsection (9):

(9A)(a) Where in relation to an authorisation—

(i) an application in accordance with section 242 of the Finance Act, 1992, for a tax clearance certificate has been made—

(I) not less than four months prior to the commencement date of such authorisation, and

(II) a tax clearance certificate has not yet been issued or refused,

or

(ii) a tax clearance certificate has been refused and an appeal against such refusal has been made and accepted in accordance with subsection (6) of the said section 242,

and in either case, the authorisation could, but for the provisions relating to a tax clearance certificate, have been issued, then—

(I) in a case where an authorisation has been granted in respect of the previous authorisation period, such authorisation may continue in force beyond its latest expiry date pending—

(A) the issue or refusal of a tax clearance certificate, or

(B) in the case of an appeal, the final determination of that appeal,

and

(II) in a case where an authorisation has not been granted in respect of the previous authorisation period, an authorisation may be issued temporarily and remain in force pending—

(A) the issue or refusal of a tax clearance certificate, or

(B) in the case of an appeal, the final determination of that appeal:

Provided that the amount of the fee that would be payable on the application for the authorisation is duly deposited with the Director.

(b) Every authorisation issued temporarily or continued in force in accordance with paragraph (a) shall, while it remains in force, be deemed to be an authorisation within the meaning of this section.

(c) Where—

(i) a determination is made to issue a tax clearance certificate, in respect of an application referred to in subparagraph (i) of paragraph (a), or

(ii) the final determination of an appeal referred to in subparagraph (ii) of paragraph (a) is to the effect that the application for a tax clearance certificate in relation to an authorisation is an acceptable application,

and where the tax clearance certificate has been issued, the authorisation continued in force or issued temporarily under this subsection shall expire upon the grant of an authorisation under this section and the duty deposited shall be set against the appropriate duty payable on the grant of the authorisation.

(d) Where—

(i) a determination is made to refuse a tax clearance certificate, in respect of an application referred to in subparagraph (i) of paragraph (a), or

(ii) the final determination of an appeal under subparagraph (ii) of paragraph (a) is to the effect that the refusal of an application for a tax clearance certificate in relation to an authorisation is a valid refusal,

the authorisation continued in force or issued temporarily under this subsection shall expire not later than seven days after such refusal or after the determination of such appeal, and the amount of any duty deposited in excess of the proportion of that duty attributable to the period when the authorisation was temporarily in force shall be repaid.',

and

(c) in section 144—

(i) by the substitution, in subsection (9), of the following for paragraph (d):

‘(d) the applicant has failed to provide satisfactory evidence that a current tax clearance certificate issued in relation to the authorisation has been issued in accordance with the provisions of section 242 (as amended by the Finance Act, 1997) of the Finance Act, 1992,',

(ii) by the insertion of the following after subsection (9):

‘(9A)(a) Where in relation to an authorisation—

(i) an application in accordance with section 242 of the Finance Act, 1992, for a tax clearance certificate has been made—

(I) not less than four months prior to the commencement date of such an authorisation, and

(II) a tax clearance certificate has not yet been issued or refused,

or

(ii) a tax clearance certificate has been refused and an appeal against such refusal has been made and accepted in accordance with subsection (6) of the said section 242,

and in either case, the authorisation could, but for the provisions relating to a tax clearance certificate, have been issued, then—

(I) in a case where an authorisation has been granted in respect of the previous authorisation period, such authorisation may continue in force beyond its latest expiry date pending—

(A) the issue or refusal of a tax clearance certificate, or

(B) in the case of an appeal, the final determination of that appeal,

and

(II) in a case where an authorisation has not been granted in respect of the previous authorisation period, an authorisation may be issued temporarily and remain in force pending—

(A) the issue or refusal of a tax clearance certificate, or

(B) in the case of an appeal, the final determination of that appeal:

Provided that the amount of the fee that would be payable on the application for the authorisation is duly deposited with the Director.

(b) Every authorisation issued temporarily or continued in force in accordance with paragraph (a) shall, while it remains in force, be deemed to be an authorisation within the meaning of this section.

(c) Where—

(i) a determination is made to issue a tax clearance certificate, in respect of an application referred to in subparagraph (i) of paragraph (a), or

(ii) the final determination of an appeal referred to in subparagraph (ii) of paragraph (a) is to the effect that the application for a tax clearance certificate in relation to an authorisation is an acceptable application,

and where the tax clearance certificate has been issued, the authorisation continued in force or issued temporarily under this subsection shall expire upon the grant of an authorisation under this section and the duty deposited shall be set against the appropriate duty payable on the grant of the authorisation.

(d) Where—

(i) a determination is made to refuse a tax clearance certificate, in respect of an application referred to in subparagraph (i) of paragraph (a), or

(ii) the final determination of an appeal under subparagraph (ii) of paragraph (a) is to the effect that the refusal of an application for a tax clearance certificate in relation to an authorisation is a valid refusal,

the authorisation continued in force or issued temporarily under this subsection shall expire not later than seven days after such refusal or after the determination of such appeal, and the amount of any duty deposited in excess of the proportion of that duty attributable to the period when the authorisation was temporarily in force shall be repaid.',

(3) This section shall apply and have effect in relation to an application under—

(a) section 93 of the Consumer Credit Act, 1995, for a moneylender's licence,

(b) section 116 of that Act, for a mortgage intermediaries authorisation,

(c) section 144 of that Act, for a credit intermediaries authorisation,

the commencement date of which is on or after the 1st day of January, 1998.".

Under the Consumer Credit Act, 1995, the Director of Consumer Affairs may refuse an application for a moneylender's licence or a credit or mortgage intermediaries authorisation if the applicant does not produce a current tax clearance certificate. This amendment underpins that condition by applying to those licences and authorisations the same statutory system of tax clearance that applies under section 242 of the Finance Act, 1992, to excise licences. Under that system, a tax clearance certificate will not be issued by the Collector General unless the person applying for the certificate, and certain other persons connected with the applicant, have complied with all obligations of the Acts governing income tax, corporation tax, capital gains tax and VAT in relation to, first, the payment of tax, interest and penalties and, second, the delivery of returns. It is to do with the rules and regulations concerning moneylenders and tax clearance certificates.

It provides they can continue to trade in certain circumstances where there is a dispute.

Yes, they will not be closed down.

One institution operating in my constituency, which is also the Minister's constituency, thought it could sell alcohol in a dance-hall on the basis of applying to the Revenue Commissioners for a licence. I take it that could not happen?

Is that the dancehall in Pleasant Street?

Yes, the Olympic Ballroom. Did it receive a theatre licence?

I am not sure.

It is causing major disquiet.

I am aware of that.

Amendment agreed to.
Section 128 agreed to.
NEW SECTIONS.

I move amendment No. 113:

In page 122, before section 129, to insert the following new section:

"129.—(1) The Minister for Finance may advance moneys from the Central Fund or the growing produce thereof to the Post Office Savings Bank Fund on such terms and conditions as that Minister thinks fit for the purpose of the acquisition, holding or disposal of any rights or interests, direct or indirect, in any securities of the State to which section 138(1)(b)(i) of the Finance Act, 1993, relates.

(2)(a) In respect of any moneys advanced by virtue of subsection (1), such moneys shall, subject to paragraph (b), be repaid to the Minister for Finance at such time or in such circumstances as that Minister may specify, together with any interest thereon at such rate or rates as that Minister may fix.

(b) The Minister for Finance may, from time to time, alter the time or circumstances under which any moneys advanced by virtue of subsection (1) are to be repaid.".

This amendment provides the authority to the Minister for Finance to lend money to the Post Office Savings Bank fund for the purpose of buying Irish Government securities. The amendment will allow the National Treasury Management Agency the flexibility to introduce minor changes in the way it manages the primary dealer system in Government bonds by allowing it to hold bonds purchased back from primary dealers in the Post Office Savings Bank fund pending subsequent resale. The current practice is to cancel bonds purchased from primary dealers wishing to adjust their portfolios and issue new bonds where needed. In practice, this change would make no difference to primary dealers but it would protect us from an adverse impact on the general Government deficit which could arise from a possible change in the way EU accounting rules are interpreted.

Amendment agreed to.

I move amendment No. 114:

In page 122, before section 129, to insert the following new section:

"129. The National Treasury Management Agency Act, 1990, is hereby amended in section 4 by the insertion of the following subsection after subsection (1):

‘(1A) An additional function of the Agency shall be:

(a) to perform, on behalf of the Minister for Agriculture, Food and Forestry whenever requested by that Minister, the borrowing function set out in Regulation 11 of the European Communities (Common Agricultural Policy) (Market Intervention) Regulations, 1973 (S.I. No. 24 of 1973), and

(b) to exercise the function of that Minister in relation to the management of the indebtedness arising from such borrowing,

on such terms and conditions as may be agreed by the Agency with that Minister.'.".

In April 1996 a value for money report was published by the Comptroller and Auditor General on the borrowing activities of the Department of Agriculture, Food and Forestry for FEOGA purposes. The report concluded that while the borrowing and associated risks were managed quite well by the Department, consideration should be given to the involvement of the NTMA to a much greater extent in the management of the borrowings involved. The proposed amendment would facilitate the adoption of this recommendation by expanding the function of the NTMA to allow it to undertake and manage such borrowings as an agent of the Minister for Agriculture, Food and Forestry. The treasury management expertise which the NTMA can bring to this area should ensure that the lowest possible servicing costs would be achieved. A group of people in the Department is effectively managing this fund, mimicking what the NTMA does. The recommendation is to move everything to the agency and it is being done in such a way that we do not add to the total debt but the expertise in managing the fund is given to the NTMA. It is the implementation of a recommendation which came before this committee.

Amendment agreed to.
Sections 129 and 130 agreed to.
NEW SECTION

I move amendment No. 114a

In page 122, before section 131, to insert the following new section:

"131.—Section 61 of the Finance Act, 1996 is hereby amended by the insertion of the following paragraph after paragraph (c):

‘(d) the Road Tax Fund pertaining to Motor Caravans will be aligned to the regime prevailing in both Northern Ireland and the United Kingdom, that is, at a rate of IR£155 per annum, payable in one moiety,'.".

I do not accept the amendment.

I will resubmit this on Report Stage, with permission.

Amendment, by leave, withdrawn.