Special Committee on the Finance Bill, 1992 debate -
Tuesday, 12 May 1992

SECTION 135.

Mr. B. Ahern

I move amendment No. 108:

In page 148, subsection (1), lines 28 and 29, to delete "which may not be earlier than the 30th day of September prior to the" and substitute "but only where the period ends not earlier than the 31st day of October prior to the beginning of the".

The amendment clarifies an ambiguity over the timing of the end of the period for which annual turnover must be established under the provision as amended. Annual turnover may be established for a period of 12 months anytime before 11 months prior to the beginning of the licensing year.

Amendment agreed to.

Mr. B. Ahern

I move amendment No. 109:

In page 148, subsection (1), line 37, after "related" to insert "except that, in the case of a licence granted in respect of a hotel currently registered in the register of hotels maintained and kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1987, the provision of meals in a dining room separate from any area with a bar wholly or primarily designed for the sale of alcoholic beverages shall not be regarded as so related".

This amendment provides that meals in the dining rooms of hotels shall be regarded as an excluded business activity.

Amendment agreed to.

Chairman

Amendments Nos. 110 and 116 are related and may be taken together.

Mr. B. Ahern

I move amendment No. 110:

In page 148, subsection (2), line 44, after "and" to insert, "subject to subsection (3),".

Amendment agreed to.

Chairman

Amendments Nos. 111, 112, 115 and 117 inclusive are related and may be discussed together.

It should also be noted that the proviso proposed to be inserted in section 135, by amendment No. 112 relates to subparagraph (iii) of paragraph (b) of subsection (2).

Mr. B. Ahern

I move amendment No. 111:

In page 149, subsection (2), line 10, to delete "Table." and substitute "Table:".

Amendment agreed to.

Mr. B. Ahern

I move amendment No. 112:

In page 149, subsection (2), between lines 10 and 11, to insert the following:

"Provided that—

(I) where, in respect of premises which are currently or which were previously licensed, a licence is granted where annual turnover is not yet established under subsection (1), a rate of duty equal to the sum paid when the premises was last licensed, subject to a minimum rate of duty of £200;

(II) where a licence is granted, in respect of premises not previously licensed, a rate of duty of £200.".

Amendment agreed to.

Mr. Quinn

I move amendment No. 113:

In page 149, to delete the Table to subsection (2) and substitute the following:

"TABLE

Level of Annual Turnover	Rates of Duty
(1)	(2)
Under £100,000	£150
£100,000 but less than £150,000	£200
£150,000 but less than £250,000	£300
£250,000 but less than £450,000	£700
£450,000 but less than £750,000	£1,200
£750,000 but less than £1,000,000	£2,000
over £1,000,000	£3,000

I know that a number of members will want to speak on this amendment. The alternative table proposed was suggested by a number of interested parties and provides for a more gradual escalation into the high revenue yield. Since it was not possible for us to estimate the total yield, nor, I suspect, would it be possible for the Minister who would not have access to the full range of turnovers, the table is designed in response to representations I received from rural pubs around the country, many of whom do not open during the day and pursue limited trade.

Mr. Noonan (Limerick East)

I wish to link amendment No. 118 with amendment No. 114.

I did not redraft the table in my amendment but took the people with a turnover of less than £150,000. Down the country a turnover of less than £3,000 a week is not significant. Licence fees were raised from £50 to £100 last year or the year before and now they are being doubled again. For people with a small turnover, it would be more acceptable if licences were increased by £50 and without prejudice to the rest of the Minister's table, I suggest that £200 be deleted and £150 inserted which was the waiver I put down; there is a printing error.

The Minister has declared that licences will only be granted in the courts next September if a tax clearance certificate is put up before the District Judge which will not only prove that the personal taxation of publicans is up to date but also that their VAT, excise residential tax have been paid. I have no objection to that in principle but the lead in time is too short. To deprive a publican of his licence is to deprive him of his livelihood. I ask the Minister to allow for longer notice; instead of insisting on September 1992, it should be deferred to September 1993. The amendment proposes to replace 1992 with 1993 but not to depart from the principle advocated by the Minister.

The Minister's licence table has been accepted by publicans even though I will make a case for those on low turnover. They are seriously concerned about what the Minister is proposing for September and afraid they might lose their licences in cases where they do not have time to put their affairs in order. There is sympathy and support among publicans for what the Minister is doing because of competition from fly-by-night merchants who lease pubs and do not return PRSI VAT or PAYE. Vintners suggest that substantial bonds should be required before pubs are leased. An extra year is a long time for a lead in but it is not possible to have a shorter lead-in time because licences come up for renewal every September.

Mr. Martin

I thank the Minister for responding to the original lobbies and to pressure on this issue between Budget day and the Finance Bill. Most publicans I have been in touch with are reasonably satisfied with the compromise and with the new table as printed in the Bill. People at the middle level argue that the rise from £400 to £900 is excessive for those with a turnover of around £350,000. Agitation is not as great now as it was in January, February or March and a reasonable effort has been made.

In relation to tax clearance, I was heartened by the number of publicans who said they did not expect the Minister to do anything on tax clearance because they expect to have their tax affairs in order; a small number of publicans are concerned about it. Maybe September is a short lead-in time from now but some people would probably find it difficult to put their tax affairs in order for any deadline.

Mr. Hogan

I agree with the previous sentiments expressed and I ask the Minister to think seriously about a longer lead-in time for this tax. Contrary to what Deputy Martin says more than a few publicans are anxious to receive more time to put their affairs in order so that they can pay their taxes at the appropriate time.

Miss Flaherty

I support the amendment. Many self employed people are coming to terms with the changes in personal income taxes over the last years. They had been paying their tax in advance which involved some of them in additional bills. In other circumstances, I would have no mercy but the self employed have suffered extra burdens in recent years in an effort to make taxation equitable.

Mr. Roche

The more important of the two issues is that raised by Deputy Noonan. It is very difficult between now and September to get all one's affairs up to date if one is in difficulties. I am not concerned about valuation and our case would have been made easier were it not for some intemperate attacks on the Finance Bill in the Business Post last Sunday by a gentleman representing the Vintner's Association. Talk about biting the hand that feeds you! I ask the Minister to review the date. The points being made are urgent and valid

Mr. Power

In relation to the tax clearance certificate if one publican is allowed to remain in business without having his tax affairs in order he is given an unfair advantage over his competitors. I ask the Minister to stick to his guns.

Mr. Finucane

I support Deputy Noonan. Amendment No. 118 is valid and the Minister should concede. It would harness goodwill among the vintners.

Mr. B. Ahern

I thank the Members who acknowledge that I have gone a considerable way in trying to assist publicans. Together with a number of other groups, they were given time and attention by my Department and a number of changes have been made which I am not altogether convinced will resolve all issues. Either myself or another Minister will have to return to the tax position of the publican. From my knowledge now, I can understand why Mr. Tadhg O'Sullivan said he was concerned at the increased powers of Revenue and that he might have to tell his members not to pay at all. Perhaps he should tell his members what the law of the land is and how small contractors have to comply with the law. He negotiated a good deal with me and if he was honourable enough to tell the truth to his members of what he negotiated it would be helpful. I will be slow to negotiate again with a person who says one thing in a room and goes outside and pontificates about other things. I will make no further concessions to him now and I do not think it is necessary to do so. Mr. O'Sullivan agreed to the table so if he has a difficulty with his own members he should own up to this mistake and not blame it on any Member of this House. Deputy Noonan may have a point that some small publicans may experience difficulties in putting their tax affairs in order but the appeals mechanism in this case is very simple, unlike other appeals mechanism. As I have already said to city and country vintners, in the case of a straight appeal vintners will continue to hold their licence while the appeal is in progress, so they cannot lose. I announced these conditions on 29 January but if anybody now finds himself in difficulty, or foresees a difficulty arising, he should contact the Revenue Commissioners because we have decided not to be over-harsh in dealing with this issue.

Mr. Noonan (Limerick East)

There is a problem with the banks' policy that the Minister may not be aware of. If a bank thinks a publican is capable of producing the revenue to service the loan they will give a loan to the vintner to pass on to the Revenue Commissioners. But if, in the bank's estimation, the business is shaky, it will refuse to loan money.

Mr. Quinn

That's true. Can we go back——

Mr. B. Ahern

I will take that into account. There are a number of issues I want to refer to following lobbying by many Members.

I could say many things that would not make good reading for publicans. Rather than trying to compete with me by defending the indefensible, they might acknowledge that I will be lenient towards them in light of what Members of this House have said about their difficulty in getting their act together. But if I see pubs with huge turnovers selling Guinness not bought in the Republic of Ireland, I will become cynical; I cannot stay quiet forever. Rather than have a war of words with me, it would be better for them to get their house in order. Both the Department of Finance and the Revenue Commissioners have given them time to do that — but the abuses of turnover in respect of minerals etc. cannot be allowed to continue. Profits margins of 40 per cent are involved here. I would ask Members here to lobby pubs to get their tax affairs in order; otherwise we must consider a tougher regime.

There are no more pubs in Dublin now than in 1908, yet 600,000 additional people live in the city. In dealing with competition legislation, this will have to be faced up to. Publicans should put their affairs in order quickly or next January I will be wiser and more tired of their unfairness.

Chairman

As it is now 9 o'clock, I am required to put the following question in accordance with an Order of the Dáil of 12 May.

Question put: "That the amendments set down by the Minister for Finance to sections 125 and 143, inclusive, and not disposed of are hereby made to the Bill, and, in respect of each of the sections undisposed of, that the section or, as appropriate, the section, as amended, is hereby agreed to."

As we do not have the full committee present, we must wait for the required eight minutes.

The Committee divided: Tá, 8; Níl, 7.

Tá

• Ahern, B.
• Kirk, S.
• Ahern, D.
• Martin, M.
• Dennehy, J.
• Power, S.
• Hilliard, C.
• Roche, D.

Níl

• Finucane, M.
• Noonan, M.
• Flaherty, M.
• (Limerick East).
• Flanagan, C.
• Quinn, R.
• Hogan, P.
• Rabbitte, P.

Question declared carried.

Progress reported; Committee to sit again.

The Committee adjourned at 9.10 p.m. until 11 a.m. on Wednesday, 13 May 1992.