I move amendment No. 15a.
In page 17, subsection (1), after line 9, to insert the following:
"(f) an amount equivalent to 0.5 per cent of the net amount payable to the Revenue Commissioners in respect of the taxable period".
This seems to me an amendment which would commend itself to the Committee in view of the cost incurred by people in operating this system.
I would agree that, on the face of it, the amendment has certain attractions, but it presents a number of difficulties which make it impossible for me to accept it. The main objection that I would have to it is this: that it would not operate equitably as between different traders. For instance, while the cost of operating the tax in relation to goods liable at the 16.37 per cent rate is not likely to be more expensive than its operation in relation to goods at the 5.26 per cent rate, the net tax payable would be higher and the suggested basis of compensation would therefore favour goods taxed at the higher rate. As a result traders such as jewellers and furniture dealers would receive relatively more compensation than grocers or drapers; and those traders who are accountable at the 30.26 per cent rate would be the most favoured of all. In addition to that, the method proposed in the amendment would favour traders who imported their stock, because, since no tax would be chargeable on imports, their net liability for each taxable period would be higher than the net liability of corresponding traders who purchase their stock locally from accountable traders. Another objection to it is that firms who are engaged solely in exporting would have no net liability and therefore would not be entitled to any relief. I would add that in so far as this is intended to compensate retail traders, in particular, these traders will have their liquidity position substantially improved by the decision to extend the taxable period from one to two months, and this improvement would at least compensate, if not more than compensate, them for any additional cost of operating value-added tax as against the present system of turnover tax.
I am sorry I was not present for the beginning of the discussion of this amendment. I feel rather strongly about this aspect of the introduction of VAT, that is, the cost of administration. As has already been mentioned here, the introduction of VAT will eliminate a certain amount of evasion, which is to be welcomed. Since there will be extra revenue from the stopping of evasion this Bill should be seen to help traders to administer the value-added tax system properly. The amount involved would be only nominal. If this amendment were accepted it would show goodwill on the part of the Minister to all traders in the country.
I should like to support this amendment. As I said on our very first discussion, the Revenue Commissioners are extremely fond of putting costs on people. The Minister, as the responsible political figure, not the present Minister particularly—I have no reason to think he is doing it more than anyone else—but all Ministers for Finance, are very fond of this game of getting other people to do their work for them. I do not know how the Minister could keep a straight face when he said this system would not operate equitably as between traders, when I think of our income tax system. This is in almost the same field as income tax; there is no great difference between them. Under our income tax system some people are absolutely immune from income tax——
Could I interrupt the Deputy to suggest to him that if he follows that line, which is very interesting, he will be guilty of something of which he was accusing another member of the Committee, namely, being irrelevant.
I am not irrelevant at all. As one of the Revenue Commissioners on one occasion said to me, there is legal and illegal evasion of income tax. Surely the Minister had not a straight face when he said that this would not operate equitably as between traders. When I think of our whole taxation system and the inequity of the major part of it I do not think the Minister is being quite fair in talking about it not operating equitably. I take the Minister's point. I think we were told early on that as between the wholesale tax and the turnover tax 80 per cent of transactions, in value, were covered by turnover tax and 20 per cent by wholesale tax. I take it the Minister is right in saying this is of particular relevance to retailers. I cannot see inequity in people who deal with 20 per cent of the trade of the country getting a bit more money fortuituously. The truth is, although the Minister was polite and nice in dealing with this amendment, that neither he nor his advisers have any intention or eye paying to any person no matter how much trouble they may be put to. They put people to intense trouble under PAYE. They have every intention of putting small firms to intense trouble under this. Many of these will not be able to afford the highly sophisticated machines for dealing with this. I support this amendment.
It is now 5 o'clock.
I am not withdrawing the amendment.
The Committee adjourned at 5 p.m. until 7.30 p.m. on Wednesday, 28th June, 1972.
