I move that the Bill be now read a Second Time. The main purpose of this Bill, as the House is aware, with one exception—an important exception —is to translate into legislative form, where legislation is necessary, the budgetary proposals for the current financial year. The exception is, of course, the increase in the old age, in the blind and in widows' and orphans' pensions, for which separate legislation is required and has already been introduced.
The Finance Bill also contains a certain number of technical additional provisions, which it was not necessary to go into in the Budget, but which I shall now explain as I go along. The debate on the Budget concluded only very recently and I, therefore, do not propose, at this stage, on the Second Reading of this Bill, to go into the sections in any elaborate way but merely to enumerate their purpose and give a brief account of their contents. We shall have an ample opportunity for detailed discussion on the Committee Stage, if that is desired.
Part I of the Bill, as usual, deals with the income-tax code. Section 1 reimposes the same rates of income-tax and surtax as were in force in the year ending 31st March last. The remaining sections deal with matters to which I made reference in the financial statement.
Section 2 increases the deduction which a taxpayer is entitled to make in respect of qualified children from £85 to £100 for each child.
Section 3 extends the exemption from income-tax for charities so as to relieve the profits of a trade exercised in the carrying out of the primary purpose of the charity.
Section 4 authorises the deduction from income-tax before income-tax liability is computed, of insurance premiums paid to provide for the expenses of medical care and attention in case of sickness. In respect of that section, I would draw the attention of the House to the fact that the phrase "authorised insurer" is used in sub-section (1) and is defined later in the section. That has the effect of relating it to the definitions that are in the Insurance Act, 1936, and it will therefore include the scheme that is operated by the Irish National Teachers' Organisation. Deputies will see that that is clear from the wording that is followed in the second section when relating to the Act of 1936.
Section 5 extends to future stock issues of local authorities the privilege of being able to pay dividends without deduction of income-tax at source. That does not mean that interest on stocks of local authorities to be created in the future are tax free. It merely means that that interest will be payable without deduction of the tax at source and it will be assessable on Schedule D in the ordinary way.
Part II of the Bill contains four relieving sections in respect of customs and excise. The first section in this part, Section 6, increases from 30/- to £2 per standard barrel the rebate that is allowed to each brewer on the first 5,000 barrels of beer brewed by him in any year and in this regard the year commences on 1st July and this section will be effective as from the year commencing 1st July, 1954. The House will remember that I announced that I was making that concession for the purpose of assisting the employment that these small breweries give locally and so to try to make my contribution towards their being enabled to carry on satisfactorily.
Section 7 reduces from 35 per cent. to 25 per cent. the minimum proportion of a cine-variety programme in a patent theatre which must consist of a personal performance so that the entertainment may qualify for the 30 per cent. repayment of entertainment duty allowable under the Finance Act of 1948, sub-section (10), Section 4, paragraph C. The House is aware that in patent theatres there is a provision by virtue of which they have to pay less entertainment duties if they put on a live performance to the extent of a proportion of the show. This is a change to enable them to alter the period of time they devote to the live shows.
Section 8 of the Bill revokes the customs duty on galvanised corrugated iron or steel which has been suspended since 1942. In the absence of such a provision it would automatically come into force again next year with the lapse of the Supplies and Services (Temporary Provisions) Act, 1946. It has been announced that this Act will not be reintroduced next year.
Section 9 has three purposes. It provides, in the first instance, as announced, that the £8 excise duty applicable to agricultural tractors used on public roads for the baulage of goods without reward shall also apply as from the 1st July, 1955, to agricultural tractors using a carry-all or other detachable container for the conveyance of goods without reward. As things are at present the attachment of such a device transforms the tractor into a goods vehicle making it liable for duty at the higher rate appropriate to that type of vehicle. For example if it is one and a quarter tons weight it is liable to a duty of £34. The ordinary tractor can carry much more in a trailer at the £8 rate than could be carried in the detachable container so that it would be inequitable to leave the law as it stands at present.
In the second place the section carries out the announcement which I made in the financial statement, that is that agricultural tractors used for hauling milk, separated milk and containers to and from creameries for reward will be subject to duty only at the £8 rate. Provision is made in the section for a refund of the duty where a tractor qualifying for this relief has already been taxed for the full period up till 31st December last.
Part III of the Bill contains four sections dealing with death duties. The first of these, Section 10, provides for confirmation of the agreement with the Government of Canada, signed on 28th October last, for the avoidance of double taxation on the estates of deceased persons. The agreement is set forth in the First Schedule of the Bill.
Section 11 provides that, where property is being taken out of settlement, the trustees may obtain from the Revenue Commissioners a certificate of the prospective amount of estate duty for which they, as trustees, may become accountable. This will enable trusts to be wound up in certain cases, but I should explain that should the amount of the duty be found later to exceed the amount specified in the certificate the trustees will not be liable for the excess but the beneficiaries, who have received the funds, will still remain liable and such excess must be paid by them.
The effect of Section 12 is to take all assurance policies contracted for by a deceased person on his own life for the benefit of other persons, and in such terms that he himself could take no interest in the policy moneys, and to aggregate them together for the purpose of ascertaining the appropriate rate of duty to apply to each of the policies. The reason for this section is to combat a scheme for the legal avoidance of duty whereby an individual desiring to insure himself for £10,000 takes out five policies each for £2,000, which is the estate duty exemption limit. As the law stands, on the death of that person, each of these policies would form an estate in itself and no duty whatever would be payable in respect of those five policies. It is to avoid the operation of such a scheme in the future that we are making this provision in Section 12.
Section 13, on the other hand, is a relieving section which limits the application of the aggregation rule. Under the existing law, if a person's own free estate exceeds £2,000 it is aggregated for estate duty purposes with any settled estate in which he had an interest and, accordingly, becomes liable to the higher rate of duty. Under Section 13 the aggregate will not apply where the net value of the free estate of the deceased does not exceed £10,000. That is to say it is being extended from £2,000 to £10,000 in relief of the existing provisions. There is also the usual provision here for marginal relief as exists in many death duty cases.
Part IV, and Sections 14 and 15 in Part IV are concerned with the Canadian double taxation agreement. They are for the purpose of giving effect here under our domestic law to that agreement. Again, the agreement in this case is set forth in the Second Schedule to this Bill.
Part V refers to two matters affecting stamp duty to which I made reference in the financial statement. In Section 16 I have provided for the repeal of the stamp duty on the certificate of notories public which became consequential on the enactment of the Solicitors Bill last winter. Section 17 provides that credit sale agreements will be brought into line with hire purchase agreements for stamp duty purposes.
The remaining four sections of the Bill which are contained in Part VI are now the normal sections. Section 18 makes the usual amortisation arrangement in respect of borrowing for voted "capital services" in 1954-55 and 1955-56. The necessary repeals are provided for in Section 19 and in the Third Schedule to the Bill. The repeal of Section 5 of the Finance (Miscellaneous) Provisions Act, 1935, and of Section 23 of the Finance Act, 1938, abolished the bounties on tobacco made from home-grown leaf and on sugar made from home-grown beet which were introduced in 1935 to compensate exporters in particular for the higher duty-free cost of such commodities as compared with the imported products. The tobacco bounty was suspended under the Emergency Powers Act. No bounty has been paid in either case since 1943. Tobacco has virtually ceased to be grown here and sugar ceased to be liable to duty in 1946. With the lapse of the Supplies and Services (Temporary Provisions) Act, 1946, the original legislative provisions would be revised and, in the circumstances, their repeal is now proposed.
That concludes a very brief review of the sections of the Bill and the Schedules are those to which reference is made in the sections, and to which I have referred. In view of the fact that the debate on the financial statement was so recent I do not think that any further or more detailed statement is required at this stage.