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Dáil Éireann díospóireacht -
Thursday, 28 Nov 1929

Vol. 32 No. 11

Ceisteanna—Questions. Oral Answers. - Income Tax Forms and Procedure.

asked the Minister for Finance if he will consider the advisability of appointing a Commission to examine the whole income tax code with a view of endeavouring to remove certain hardships under which taxpayers are suffering, and who would investigate and suggest the best means whereby the whole procedure in regard to income tax returns could be simplified.

As already indicated by me in the Dáil on the 24th April and 12th June of this year, I am of opinion that income tax simplification in the Saorstát is necessary. A Departmental Committee is now at work on the drafting of a simplified code and it is hoped that it will have completed its labours at a comparatively early date. As the subject is so highly technical I am afraid no good purpose would be served by appointing a Commission until the Departmental Committee has completed its work. When the Departmental Committee has reported and the matter comes before the Dáil, I shall be prepared to consider the question of appointing a Commission if such a course seems necessary. If, however, the Deputy will be good enough to communicate to me the particular hardships which he has in mind, I shall be prepared to have them specially considered without waiting for the report of the Departmental Committee. The simplification of income tax forms generally is dependent on the simplification of the Acts. Consequently, until a new code of income tax law is available, it would not be possible to make any radical changes in the existing forms.

asked the Minister for Finance whether he will consider the advisability of introducing proposals for legislation to amend the income tax law as follows: (a) by repealing Section 165 of the Income Tax Act, 1915, which gives absolute power to the Revenue Commissioners to issue warrants for the arrest and detention of defaulting taxpayers, the length of the detention being at the pleasure of the Commissioners, without any right of appeal to the Minister or the court; and (b) to amend Rule 85 of the District Court Rules (and the Acts authorising same), whereby a special form of decree in revenue cases is provided by altering the form of decree made under said Rule so as to exclude the provisions for arrest and detention for an indefinite period at the pleasure of the Revenue Commissioners.

With regard to (a) the powers conferred upon the Special Commissioners of Income Tax under Section 165 of the Income Tax Act, 1918, are applied only in a few cases of wilful default in which the taxpayer is well able to pay, but cannot be brought under the ordinary powers of recovery. In fact, only nine cases have been dealt with under this section since April, 1923. In seven of these cases the tax was paid at once; in one case it was paid on the third day after arrest; in the remaining case the defaulter was imprisoned for a month, and then released when evidence was produced that he had squandered his means. In practically every case the person arrested was known to be about to leave the country to avoid payment.

With regard to (b), if the power of arrest were to be discontinued in cases of decrees for income tax in the District Courts, the collection of tax would be impossible in many cases, where neither the Collector of Taxes nor the Sheriff could recover the duty by distraint though the taxpayer would be well able to pay. In the past these powers have, through misunderstanding, been applied in some cases in which the person affected, though undoubtedly liable, had become unable to pay the amount due. While it would not be advisable to make the suggested alterations in procedure, it has been arranged that in future every case involving arrest will be specially examined by the Revenue Commissioners, and the Deputy may rest assured that in no case will a defaulter be arrested if he is genuinely unable to pay.

Is the Minister aware that under that clause the Revenue Department have issued warrants for the arrest of persons who offered to pay what appeared to be reasonable instalments of the amount claimed, and will the Minister instruct the Department to accept payments by reasonable instalments where it would impose hardships upon the persons to pay the whole amount in a lump sum?

The Deputy can rest assured that where it is reasonable that instalments should be accepted, arrangements will be made to accept payments by instalments. I think I know something of the case the Deputy had in mind in asking the question, and if the offer of instalments was not accepted in that case, it was due to a misunderstanding, the offer having been made not to the Revenue official, but to the Sheriff.

Is the Minister aware that the case he referred to as having produced payment in three days is the case of a man who was out of work since 1926, and who was put in prison in the hope, which proved successful, that his relatives would be shamed into paying, and would not that in fact amount to something like blackmail?

I am not aware of that, and I do not think it is the case.

Is the Minister aware that several people willing to pay substantial instalments have been sold out by the Revenue Commissioners?

I do not think that any person who offered to pay instalments and who could not afford to pay the whole amount, has been sold out.

Mr. Boland

Will the Minister deny that it has happened?

I could not.

Mr. Boland

You cannot deny it.

There are thousands of income tax recovery cases, and if the Deputy cites some particular thing that happened in one case, I could not deny that, because, as I already intimated in the answer, cases of misunderstanding will occur.

Does the Minister say he is setting up a Departmental Commission to inquire into this matter? (Deputies: No, no.)—a Departmental Committee—because if so I would like to know the terms of reference. They ought to be fairly wide.

That is a different question. A Departmental Committee is at work in producing a new code of income tax law which will we hope, be very much simpler than the present code, which was evolved for a country where industrial conditions are very different, and a code that will be more suitable to the conditions here.

Will that Committee have power to deal with the matters just referred to?

The committee will deal with every matter affecting income tax law.

Will the Minister, even now, give directions that in the cases of men out of work the powers of imprisonment will not be enforced when it is obvious that they have no means and when warrants for their committal are issued only in the hope and with the object of forcing them to pay under the shame of imprisonment?

I stated in reply to the question that although certain persons who could not pay have been arrested it has now been arranged that in future no person will be arrested as a result of legal action and that special examination will be made in every case where arrest is involved so that there will be no recurrence of the arrest of persons who are unable to pay.

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