I should draw the Committee's attention to the fact that amendment No. 24a has an effect on other amendments; No. 24b is consequential, and Nos. 24a and 24b seem to meet in part Nos. 25, 26 and 63, which form an alternative proposal. The suggested grouping is, therefore, 24a, 24b, 25, 26 and 63 together. The Committee can take them in that fashion, if they so wish.
SECTION 25.
I move amendment No. 24a:
In page 28, before line 1, to insert the following subsection:
"(1) Any person aggrieved by a determination of the Revenue Commissioners in relation to—
(a) a liability to tax under sub-section (5) or (6) of section 17,
(b) a charge of tax in accordance with regulations, or
(c) a claim for repayment of tax,
against which an appeal to the Appeal Commissioners is not otherwise provided for under this Act may, on giving notice in writing to the Revenue Commissioners within twenty-one days after the notification to the person aggrieved of the determination, appeal to the Appeal Commissioners."
The effect of this amendment and amendment No. 24b is to extend the right of appeal to any charge of tax or to a claim for refund of tax. Under the Bill, the right of appeal is confined to estimates under sections 22 and 23, with which we dealt a moment ago, and this is the situation at present in regard to both turnover and wholesale tax. However, on reviewing the situation, we felt the right of appeal, as contained in the Bill, might be too restricted in the context of the value-added tax. Claims for rebatement will be a feature of the operation of value-added tax and it is felt there should be a clear right of appeal in regard to such claims. Certain other calculations of tax charges will require to be made in regard to de-registration, the change from a cash basis to a sales basis, and so on, and it is felt that disputes in regard to these matters should also be subject to appeal. The extension of the right of appeal, as proposed in these amendments, would enable a taxpayer to have any dispute in regard to the reviewing of tax, or any claim for a rebatement, determined on appeal.
Several issues are raised here. One is as to whether this type of appeal is the right kind of appeal. The one I proposed in my amendments is for a value-added tax tribunal. The Minister's is where the appeal is to the Appeal Commissioners. That is one issue to be determined. The other is something on which I find it very hard to form a view myself and on which I would be glad of the Minister's guidance: it is as to whether the range of issues, on which it seemed to me in my amendment No. 26 that an appeal to a value-added tax tribunal should lie, is covered, in fact, by the very much shorter list of the Minister in his amendment No. 24a, in which he lists three items—(a), (b) and (c). I have some doubts about this, but I am open to reassurance. I am not clear that, to take the first one, the question of registration or the cancellation of registration by a person is covered by the Minister’s (a), (b) and (c). There may be others. Before going back to the question of what kind of appeal there should be or what kind of appeal body there should be, could we just tackle this to see whether, in fact, the range of issues on which an appeal is possible under the Minister’s proposal is identical with mine or is narrower than mine. Would the Minister express a view on that?
It would seem that, whatever mechanism you have, the basis for appeal would boil down either to an appeal against the amount of tax being levied or an appeal for rebatement of tax and, if one accepts that, then my amendment would cover all conceivable grounds of appeal.
A good deal depends on whether the phrase "Liability to tax" under subsection (5) of section 17 is as wide as the Minister suggests. Is it, I wonder?
Certainly the intention here, as I have said, is to extend the right of appeal to enable the taxpayer to have any dispute in regard to the reviewing of tax on him or any claim for rebatement by him determined by appeal.
Would the Minister have any idea which would be less costly to the taxpayer—what Deputy FitzGerald suggests or what the Minister's amendment proposes?
Deputy Tully is raising the question of which kind of appeal it is. Could we just leave that for one moment, if the Deputy would not mind?
Sorry. I would mind. Perhaps the Minister might answer the question if he can. I should like to get this clear.
I assume Deputy Tully's question relates to the cost to the taxpayer?
Both, if possible, but particularly to the taxpayer.
With regard to the taxpayer I think one can assume there would not be any cost of making the appeal, as such, beyond what would be involved in fees to an accountant. Presumably this would be the same in both cases. As regards Revenue a different form of appeals tribunal would almost certainly cost more money than the Appeal Commissioners.
I suppose it would depend on the volume of appeals. Could the Minister give an estimate as to whether this matter could be dealt with almost immediately. I assume that what Deputy FitzGerald had in mind was that an appeals tribunal specifically set up to hear appeals would be able to give undivided attention to them, whereas, under the other system, people appealing would have to take their place in the queue.
I asked a question a while ago and I think the Minister evaded it, I do not say deliberately, but how long will it take the Appeal Commissioners to hear a matter of this sort? I am thinking particularly of a claim for repayment of tax.
I try to give whatever information I can lay my hands on at the moment. I should say that under PAYE the number of appeals involved is very small. It did not happen that the machinery got clogged up because of a mass of appeals.
It happened under the previous Income Tax Acts. There were delays of years.
I think that is not the position now. I cannot guarantee that this is absolutely the latest information but it is fairly recent information. The normal time for an appeal would be one to two months if it were taken in Dublin.
That would be quite all right.
One has an option of having it taken in Dublin or in one's own area. If one opts to have it taken in one's own area it could be longer.
I wanted to get that clear.
I was going to come to that. Possibly we can come back to it again. I was trying to establish in my own mind whether the Minister's wording is as wide as mine. The Minister refers at (a) to a liability to tax under subsection (5) or (6) of section 17. That is very restrictive because subsection (5) involves only a charge of excess tax where there is a mis-statement by the person, and subsection (6) deals only with the question of a non-registered person delivering an invoice. These are two very special cases. Obviously that is narrow enough. A lot depends on what is meant by a charge of tax in accordance with regulations. Does “a charge of taxes in accordance with regulations” cover such an issue as the registration of a person?
Yes.
It covers everything that could influence the amount of tax charged? Is that right?
The intention is—and I am advised that it is achieved by these amendments—that any matter which could be a conceivable ground of appeal in respect of liability to tax or in respect of a repayment of tax is covered.
Was it not very useful that we did not understand the Bill properly at first or it would have gone through the Dáil without these amendments. It would be quite a problem.
What distinction is there between a liability to tax and a charge of tax?
I confess I was using that phrase without reference to the Bill.
A dangerous procedure.
The phrase I was using, "liability to tax" was intended to cover the kind of situation which creates liability arising under sections 22 or 23, and this amendment is designed to cover anything that would not be covered by that, which would be the items mentioned here: subsections (5) or (6) of section 17, a charge of tax in accordance with regulations, which is actually taken from the relevant section which is section 32, and a claim for repayment of tax. I am advised that any grounds of appeal that can be conceived of under either heading of, broadly speaking, liability to tax or claim for repayment, is covered.
Everyone I have in amendment No. 26 is covered by this much simpler form?
I am so advised.
That settles that. There is no need to press that point. On the question of the type of appeal, it is noticeable that in the British code a special value-added tax tribunal has been provided. It would seem that this is a very special area and it might require separate treatment. There is a danger, although we cannot be sure how much of a danger, of the mechanism being clogged.
We are a much smaller country.
True, and we also often have much smaller tribunals. In the British code there are a number of different units so that tribunals can operate simultaneously. I wonder whether we would not be better to have a special VAT tribunal for this purpose.
It is rather a pity that the Minister has not taken power to set up such a tribunal if necessary. I do not agree with legislation by ministerial order but this is one case where it might be useful to have such a proviso in case it gets a little bit clogged-up.
Value-added tax will be administered in conjunction with income tax in the same way as turnover tax and wholesale tax are at present. It is intended that the same appeals procedures will apply. In the first instance the appeal is to the Appeal Commissioners who conduct their proceedings in a reasonably informal manner. The taxpayer may appear in person and he need not be professionally represented. If he is dissatisfied with the determination of the Appeal Commissioners he can appeal to the Circuit Court and may appeal to a higher court on a point of law. This present appeals system is effective and efficient in regard to the present wholesale and turnover taxes and there is no reason to think that it will not be equally effective in regard to value-added tax. There is a danger, if one sets up a special appeals tribunal of the kind envisaged in the Deputy's amendment, that such a body would become much more formal than the Appeal Commissioners and make life much more difficult for what I would call the ordinary small taxpayer. In any event, the system we are using appears to work effectively and there is not any reason to think it will not work just as effectively for VAT.
Is the Minister suggesting that the setting up of the tribunal would be done in order to justify the existence of VAT?
I am not suggesting anything of the sort. All of us have enough experience to know that the setting of a new appeals tribunal with the kind of structure envisaged in the amendment could well have the result I have suggested.
I would withdraw amendments Nos. 25, 26 and 66, in view of the discussion, but I should like the Minister to say if he would introduce a different system to that suggested?
I would give that undertaking if it becomes necessary.
The Minister might take authority to set up such a body if he found it became necessary. Can he do it under existing legislation?
No, it would mean amending legislation.
Does the Minister not feel that, with experience, more amendments to the Act may become necessary?
I would not rule that possibility out. We do not claim to be the font of all wisdom. I would undertake that if the appeals system provided here turns out to be ineffective or inefficient we would take steps to remedy that position. It is not in the interests of the Revenue Commissioners any more than the taxpayers to have an inefficient appeals system.
I will accept that.
Amendment agreed to.
I move amendment No. 24b :
In page 28, line 33, after "section 23” , to insert “or this section”.
Amendment agreed to.
Section 25, as amended, agreed to.
Section 26 agreed to.
SECTION 27.
I move amendment No. 24c :
In page 30, subsection (4), line 22' to delete "or assembler".
This is a drafting amendment. An amendment at Committee Stage in the Dáil defined "manufacturer" to include assembler in section 21 and a consequential amendment was made in section 21. Unfortunately, a consequential amendment in section 27 was overlooked and this amendment has been tabled to remedy it.
Amendment agreed to.
Section 27, as amended, agreed to.
Sections 28 to 31, inclusive, agreed to.