I move that the Bill be now read a Second Time. As the Dáil is aware, the main purpose of this Bill is to give effect to the proposals outlined in the Budget and to confirm the taxes which have been imposed by Resolution. As these proposals have already been debated at length I do not intend to expatiate upon them. In addition to its main purpose, however, this Bill further proposes to make certain changes in the law relative to the collection of taxes. In some cases, the more numerous changes are made to meet the convenience of the taxpayer; in other cases they are made to safeguard the Revenue. I propose to explain them briefly at this stage. Each of these changes, if past experience is a guide, will be debated separately and at great length upon the Committee Stage of the Bill, so that its full implication will then be made clear. By far the greater part of the new proposals relate to the general administration of the customs law and will be found in Part II of the Bill, Sections 14 to 16; Sections 19 to 27; Sections 31, 32 and 34 inclusive. The remainder will be found in the other parts of the Bill. Sections 2 and 3, which are in Part I, relate to income tax and sur-tax, and Sections 40 and 41 relate to stamp duty, and Section 42 to the general provisions of the measure.
Section 2 proposes to grant relief in certain double taxation cases and the necessity for it arises in the following way: Persons resident in Great Britain and also resident in the Saorstát are entitled to a measure of double taxation relief under the provisions of the First Schedule of the Finance Act, 1928, the underlying intention is to relieve such persons completely of the tax of one of the countries, and the cost of such relief is borne between the two Exchequers. Owing to differences in the method of assessment of the two countries it occasionally happens that the existing legal provisions do not enable complete double taxation relief to be granted. If this occurs in the case of a wealthy Englishman it tends to operate to induce him to give up his residence in this country. The result might be that there would be serious loss to the Saorstát Exchequer in addition to a certain economic loss to the country as a whole. The section is therefore designed to give the Revenue Commissioners discretionary power to grant further relief in such cases and to see that persons whose main place of residence and main centre of life are in England are not mulcted through taxation for maintaining a residence in the Free State.
Clause 3 is consequential upon the provisions of the Public Service (Temporary Economies) Bill and is designed to enable the income tax assessment on State employees for the year 1933-34 to be adjusted by reference to the reductions imposed by the Economies Bill.
Section 14 of the Bill provides for the importation, free of duty, of trophies and cups, bowls and shields or articles of similar type which Saorstát competitors have secured in contests outside the Saorstát. I should like to make clear that this concession is restricted to a particular type of work, that is to say, trophies in the nature of cups, bowls or shields. A canteen of cutlery or a wireless set would not be covered by this concession.
Section 15 is occasioned by the operation of the Agricultural Produce (Cereals) Act, 1933, under which many articles are prohibited to be imported, except under licence from the Minister for Agriculture or the Minister for Industry and Commerce. The duty on most of the articles is removed, and where such is not the case the intention is to exempt the article still dutiable and which the Minister will decide to admit under licence.
Section 16 provides for a drawback on the exportation of blended tea. It appears that an export trade is springing up in this blended tea in the Saorstát. Hitherto the blend had to be performed in bond to secure the benefit of the drawback. It is felt that this operation could be more economically carried out on private premises and this section of the Bill, with the necessary safeguards, is designed to secure that purpose.
Section 18 makes provision for charging an annual excise duty of £15 on moneylenders' licences, which it is anticipated will be taken out under the provisions of the Moneylenders Bill which is at present before the Dáil.
Section 19 grants a reduction to £5 5s. in the present licence duty imposed upon rectifiers or compounders of spirits.
Section 20 arises out of the position created by the imposition of the Emergency Duties Order 5 which provided among other things for the removal, as on and from 24th December, 1932, of the 20 per cent. ad valorem emergency duty payable on imported motor cars and parts thereof and the admission, from the same date of non-British motor cars and parts at the preferential in lieu of the full rate. As a result of this, traders found themselves with motor cars on hand which had borne the emergency duty or the full, as distinct from the preferential, duty. The position was that they could obtain a refund of the difference between the full and the preferential rate by exporting, and re-importing any cars affected but they could not obtain relief from the emergency duty because the Emergency order, imposing the duty, contained no provision for drawback on exportation. In these circumstances, the traders appealed to be relieved from the necessity of exporting cars and, also, to be refunded, without incurring trouble or expense, the amount of the emergency duty paid on unsold cars in stock. It was decided to grant the request, and Section 20 gives effect to that decision. The section also contains a provision in paragraph (3) affecting all classes of goods in respect of which licences to import, free of duty, may be issued. In many cases, licences were not issued immediately on application, because the merits of the case had to be explored. Importers, being unable to wait upon the decision, paid the duty and took delivery of their goods, and, subsequently, the issue of a licence was recommended by the Department of Industry and Commerce, or the Department of Agriculture, as the case might be. It was found that the refund and the issue of a licence was not strictly legal. Paragraph (3) of the section is intended to regularise the matter and to cover any refunds which may have been made.
Section 21 is similar in scope to Section 20. The Finance (Customs Duties) (No. 4) Act reduced or abolished the duties on certain parts of motor cars as from 24th December, 1932. Traders found, as a result, that they were carrying large stocks of parts which, as from that date, were free of duty or were, at least, admissible at a reduced rate, and they also found that the public were expecting to receive immediate advantage of the reduction in duties. It is proposed, in these cases, to make repayment on the basis of a flat rate, having regard to the rate of duty paid, that is, whether full or preferential, in respect of such parts as are proved to have been in stock and are of the nature of parts which are now free or are liable to a lower rate of duty than prior to 24th December last.
Section 22 provides for relief from conditions on payment of duty. It was found that importers who were granted a licence to import goods, free of duty, under licence, for use, which was deemed to qualify for such free licensed importation, sometimes wished to devote the goods, or portion thereof, to some other use and to pay the duty. This provision is introduced to cover such cases. Section 23 makes provision, generally, in respect of duties imposed by this and future Acts for payment of customs drawback, subject to the usual revenue safeguards. It has, for some time, been the practice to insert a drawback provision in all financial resolutions and implementing Bills. The general provision, now introduced, will facilitate administration and relieve possible cases of hardship and, in any cases in future, in which it is not desired to allow drawback, special provision will be made to exclude such cases from the operation of this new provision.
Section 24 relates to cases which arise on the re-importation of any article. The section is a general one for this and for future Acts and it is intended to make provisions known as the re-importation provisions which, hitherto, have enabled a home-made article, or an article on which duty has once been paid, to be exported and reimported without further payment, provided that no drawback has been paid on exportation. Where, as in the case of the previous section, it is not desired to apply this provision to any future cases, special powers will have to be taken for that purpose. Section 25 provides for a drawback on certain articles such as boots, shoes, personal clothing and wearing apparel, furniture and bedsteads, on which duty has been paid, and which have not been used in this country. It has been found that articles of this description have, on occasion, been sent in here in order to undergo some process of manufacture, but that hitherto such articles were brought in, either for trial purposes, in order to see whether they were suitable to undergo a further process, or, in fact, brought in to undergo such further process. It has been found that no provision existed to enable a drawback of the duty paid on them on first importation to be granted, and this, of course, has considerably hampered the equitable administration of the statute and has given rise in many cases to hardship and in some cases has created an impediment to the extension of home industries.
Section 26 is complementary to Section 25 and applies the re-importation provisions to furniture and bedsteads. Section 27, which provides for the repayment of duties on return or destruction, is intended to provide limited powers of relief in certain cases, of which the first is the case in which articles are found on importation to have been damaged in transit, or not to be in accordance with the order, the second being that in which articles are destroyed in the Free State without having been used for some such cause as having become obsolete. An instance which will illustrate the type of case proposed to be covered by the section might be the case of a firm like Messrs. Ford, of Cork, who, having been manufacturing motor cars of a certain design in the country, have accumulated a large stock of parts suitable for cars of such design, who have paid duty on such parts and who do not wish to undergo the expense or the trouble of re-exporting them in order to secure repayment of duty. If the Revenue Commissioners are satisfied that such parts are destroyed, either in the factory or in some other suitable place in the country, the drawback will be paid.
Section 31 repeals the duties on oats, oatmeal, maize, wheat meal, wheat flour and bread, which were imposed under the statutes enumerated in the schedule. These articles are now prohibited to be imported except under licence, and where a licence is issued it is desired to free the goods of duty. Duties on similar classes of goods were enforced under emergency orders and these also have been withdrawn. Section 32 gives the Revenue Commissioners power to determine the category or class to which an article belongs. The increased complexity of the customs tariff has been found from experience to lead to overlapping at many points, so that doubt sometimes arises as to the heading under which an article is liable to duty. Furthermore, cases have arisen where an article not designated as free falls accidentally within the ambit of a general dutiable class. Under this section it is proposed to give the Revenue Commissioners discretion in such cases and power to determine the heading under which the charge on the article, if any, should be raised. Section 33 gives the Revenue Commissioners power to determine the value of dutiable goods and articles. Section 34 is a penal clause, and provides for a special penalty applicable to breaches of the conditions attaching to licences, and is additional to, and not exclusive of, any other additional penalties attaching to the provisions of the customs law. This section relates to the general administration of the customs law.
Sections 40 and 41 of the Bill relates to stamp duties. Section 40 provides for the exempting from stamp duty of certain receipts given by a county registrar for money received by him in connection with the discharge of duties transferred to him from the under-sheriff by Section 54 of the Court Officers Act, 1926. As the law stands at present such receipts are liable to duty. A county registrar is obliged to pay over these fees to the Exchequer and to recoup himself in respect of sums expended by him in issuing stamped receipts by a claim on the Department of Justice. As no purpose is served by this procedure, which meant the transfer of money by one section of the Exchequer to another, the clause provides for the exemption from stamp duty of such receipts given by the county registrar for money received by him in connection with the discharge of his duties as under-sheriff.
Section 41 provides for the non-application of certain sections of the Stamp Act in certain cases, and arises in this way: Prior to the passing of last year's Finance Act the charge to corporation profits tax was confined to companies so constituted that the liability of their members was limited. This position was altered by Section 47 of last year's Act and certain unlimited companies were made liable to the charge. As these companies have, for the purpose of corporation profits tax, been placed in the same position as limited liability companies, it was considered that if they chose to take the necessary steps to reconstitute themselves as limited companies they should be relieved of the payment of companies' capital duty which such reconstitution would in the ordinary course involve. This exemption is expressly confined to unlimited companies which were in existence at the passing of last year's Finance Act, and which became liable to corporation profits tax by Section 47 of that Act.
Section 42 relates to the recovery of taxes and duties and is designed to remedy a peculiar anomaly which at present exists. Where a debtor not resident in the Saorstát possesses assets in the Saorstát and owes money to an ordinary Saorstát creditor, the latter can take proceedings against such debtor, and by leave of the court serve him outside Saorstát Eireann, either in Great Britain or elsewhere. In the case of debts due to the revenue the position is the same for countries other than Great Britain, but service in Great Britain for a debt due to the Saorstát revenue cannot be effected, even though the debtor has assets within the Saorstát. On the other hand, the British revenue authorities are not in a similar unfortunate position. They can and do arrange for a person within the Saorstát who owes money to the British revenue, and who has assets in Great Britain, to be served in the Saorstát. This section is designed to remedy this anomaly, and to enable originating summonses, with a view to recovery of sums due to the Saorstát revenue by debtors in Great Britain, to be served on such debtors in Great Britain by leave of the Saorstát High Court. These are the main provisions of the Bill which have not been already before the House. An opportunity will be given on the Committee Stage, and I am sure that it will be fully availed of, to discuss it at length. Accordingly I do not think it is necessary for me to say anything more about it at this stage.