Amendments 152 to 155 inclusive are related and may be discussed together, by agreement.
SECTION 232.
Chairman
I move amendment No. 152:
In page 235, subsection (11) (b), line 2, after "159," to insert "paragraph (b) of section 160,".
These amendments are necessary to provide for the dates of effect of those provisions inserted into the VAT Act by additional amendments Nos. 126 and 129. They provide that the provisions of amendment No. 126, which deal with electronic invoices, have effect from the date of passing of the Act, that the provisions of amendment No. 129, which deal with the supply of sport facilities by hotels has effect from 1 July 1992.
Amendment agreed to.
I move amendment No. 153:
In page 235, subsection (11) (b), line 11, to delete "sections 176" and substitute "paragraph (a) of section 176, sections".
Amendment agreed to.
I move amendment No. 154.
In page 235, subsection (11) (c) line 16, after "175," to insert "paragraph (b) of section 176".
Amendment agreed to.
I move amendment No. 155:
In page 235, subsection (11) (d) line 20, to delete "paragraph (b)" and substitute "paragraph (c)".
Amendment agreed to.
Section 232, as amended, agreed to.
FIRST SCHEDULE.
Question proposed: "That the First Schedule be the First Schedule to the Bill."
We have a problem with this which we did not reach at Committee Stage. I wish to indicate that, on Report Stage, I will be putting down amendments to the sections giving rise to the Schedule.
Question put and agreed to.
SECOND SCHEDULE.
I move amendment No. 156:
In page 239, to delete line 12 and substitute the following: "23. An Bord Tráchtála — The Irish Trade Board.".
The purpose of this amendment is to substitute the correct name of "An Bord Trachtála — the Irish Trade Board" for "An Bord Tráchtála" in the list of accountable persons set out in the Second Schedule to the Bill.
Could the Minister identify the new bodies being brought in, to which the retention tax will apply? He has given an all-inclusive schedule and I am not sure which were in previously and which he is introducing now.
The new ones are: Comptroller and Auditor General, the Commissioner of Valuation, The Chief Boundary Surveyor, the Director of Ordnance Survey, the Civil Service Commissioners, Clerk of Dáil Éireann, Teagasc, An Bord Glas, An Bord Pleanála, ACC Bank, Aer Lingus, Aerlinte Eireann, Aer Rianta, Arramara Teoranta, The Blood Transfusion Service Board, Bord na gCon, Bord Gáis Éireann, Bord Iascaigh Mhara, Bord na Móna, Bord Telecom Éireann, Coilte Teoranta, Córas Beostic agus Feola, Córas Iompair Éireann, Custom House Docks Development Authority, Electricity Supply Board, Housing Finance Agency, Industrial Credit Corporation, Irish National Petroleum Corporation, Irish National Stud Company, Irish Steel, National Building Agency Limited, National Concert Hall Company Limited, An Post, Nítrigin Éireann Teoranta, An Post National Lottery Company, The Racing Board, Radio Telefís Éireann, The Royal Hospital Kilmainham, An Bord Tráchtála and the Radiological Protection Institute.
Does the Minister have an estimate of the total volume of payments which will be paid by all those bodies which he is including for the first time? Does he have a figure for the current tax year for the yield that will be returned?
No.
So he is shooting in the dark?
I am not sure but it could be small because many of the professional people would actually be paid by the individual companies.
The DIRT is a standard rate of tax of 27 per cent.
Yes.
Could the Minister explain why, when contractors pay off their sub-contractors which are one man operators like blocklayers, the retention remains at 35 per cent, while for every other area of retention, it has been moved down to 27 per cent. Why are sub-contractors still on 35 per cent retention? That is blindingly unfair in the present circumstances. I know why the Minister went after the building industry, but they are the only group I know of who have a retention of 35 per cent while for everyone else it is down to 27 per cent. There is an amendment on this in my name which will be going back in on Report Stage and which I think should be accepted in all fairness, common decency and justice. Why would you take one small group of people and say it is 35 per cent for them. That is like putting a sign over them. I know the industry is bad in terms of tax compliance but this is like putting a badge on them.
I can look at it during the year. I saw the Deputy's amendments. He knows the history of it. The sub-contractors certificate was an anti-avoidance issue and the Congress of Trade Unions at the time argued for it to be 50 per cent.
The skilled craftsman will be paying tax at 48 per cent plus PRSI. Retention at 35 per cent is still a better deal.
The same applies to the doctor, the solicitor, the barristers retained in the beef tribunal, who will be paid by the Exchequer, and the two inspectors who got £500,000 for five and a half months work. They are all subject to retention, but at 27 per cent.
It should be the same rate. It was brought in before the retention tax. It had an earlier life.
There was a black economy in the building industry. The rate got stuck at 35 per cent and never came back down.
Deputy Noonan's point is particularly valid in relation to the blocklayer and the carpenter who pay 35 per cent retention tax. There is no comparison between their earnings and the potential earnings, in many cases, of the doctor or the solicitor. It is an unfair discrepancy.
Just to be clear about what Deputy Noonan has asked me to look at. The C2 was the anti-avoidance certificate. If a person has the C2, the tax is not deductable. If there is no C2, then it is deductable at the rate of 35 per cent. Is the Deputy referring to withholding tax?
I am referring to the C2.
I have had similar representations. The argument is that the rate of the C2 should be the same as that of retention, if we have read it correctly.
I presume it is not full and final settlement in either case.
No.
There is still a liability at the marginal rate, is there not?
I will look at it for next year.
Treat them like the professions.
There are other obligations involved in qualifying for the C cert.
Amendment agreed to.
Chairman
Amendments Nos. 157 to 174, inclusive, in the name of Deputy Ruairí Quinn, may be discussed together.
I move amendment No. 157:
In page 239, to delete lines 20 to 22.
At the top of the Schedule is the heading "accountable persons for purposes of Chapter III of Part 1." The inference that was made was that directors of semi-State companies would in some way become liable in a manner in which they are not currently liable, by the inclusion of these companies in the Schedule. Perhaps the Minister would clarify that point. Is that not the correct reading of it?
All of the bodies listed after No. 31, an authorised insurer, are among the list of commercial State bodies which are being brought into the ambit of withholding tax with effect from 6 June next. There is no obvious reason for including some and excluding others. It would be inconsistent to have some State bodies operating the withholding tax and others not.
Amendment, by leave, withdrawn.
Amendments 158 to 174, inclusive, not moved.
Second Schedule, as amended, agreed to.
Third to Sixth Schedules, inclusive, agreed to.
SEVENTH SCHEDULE.
I move amendment No. 175:
In page 246, line 20, to delete "Any where" and substitute "Where".
This amendment is intended to correct a typographical error which occurred when the Bill was published.
Amendment agreed to.
Seventh Schedule, as amended, agreed to.
Title agreed to.
Chairman
I suggest that the Report of the Committee be as follows: The Special Committee has considered the Bill and has made amendments thereto. The Bill, as amended, is reported to the Dáil. Is that agreed? Agreed.
I would like to thank the Chairman for chairing the proceedings for the last three days. I thank all the members of the Committee, Opposition spokesmen, people who have given a huge amount of time to it. We have had more than twice the usual amount of time given to a Finance Bill Committee Stage.
I would like to thank the staff of the Seanad and our colleagues of the Upper House for allowing us to disrupt their normal schedule for the week. We appreciate this.
It took us some time to get going in the first few hours as we were working out the concept of the committee. According to the experience of colleagues in the Revenue Commissioners and the Department of Finance, we examined far more sections than would normally be the case. We will have two days on Report Stage when we will have an opportunity to discuss things further.
I thank the committee for their co-operation and for their attempt to take Committee Stage this way. I am sure it is a practice which can be improved, but which will be followed in the years ahead.
Chairman
I would like to thank the Minister and members of the Committee for the co-operation they have given over the last three days. I suppose it was experimental early on, but when the debate settled down we got on quite well. There was a great sense of co-operation among the committee members, so we can all agree that it has been a very worthwhile experiment.
I would like to be associated with the Minister's and the Chairman's words. In particular, I would like to thank the officials who were very helpful, informally as well as formally.
I would also like to be associated with those remarks and to say that while we had twice the amount of time devoted to scrutiny of the sections we did not get twice the number of concessions from the Minister that we normally got. This has been an improvement of the way we usually do our business nonetheless and I cannot see us ever going back to the old style Committee Stage debate, certainly not on the Finance Bill.
As they say in the Supreme Court, I concur.
I would like to be associated, on behalf of our grouping, with those sentiments. I felt it was a worthwhile exercise. We had a shiver for five minutes on Monday but, once we sorted that out, there was goodwill on all sides and quite a lot of work was done.
The Committee concluded its deliberations at 8 p.m.