asked the Minister for Finance if, in view of the present serious credit situation and the consequences to business and commerce, he will consider the introduction of legislation to amend the retrospective effect of company taxation imposed under the Finance (No. 2) Act, 1970.
Ceisteanna—Questions. Oral Answers. - Company Taxation.
15.
I cannot agree that section 1 of the Finance (No. 2) Act, 1970, has retrospective effect and the question of introducing legislation as suggested by the Deputy does not therefore arise.
Is the Minister not aware that a number of companies and business firms had already closed their books and they will now be obliged under these new provisions to find liquid cash to meet the taxation imposed? This will naturally cause difficulty. It has already done so for certain firms. Does the Minister not consider that, in view of the decision to withdraw the Prices and Incomes Bill, this decision should also be reconsidered?
"No" is the answer to the last part of the Deputy's supplementary. With regard to the first part, I am aware firms had closed their books and have had to reopen them in order to meet this tax, but the reason for this is that they closed their books on the assumption that the tax rate would remain as it was. They knew, when making the assumption, that they could be wrong. They were wrong. The logic of the suggestion put forward by the Deputy is that the tax rate could never be changed and that, if it were, it would amount to retrospective legislation. I do not accept that that is correct.
Is this not the first time that taxation in these circumstances was made retrospective? Undoubtedly tax rates change from time to time but, in this case, it was made retrospective long after the taxation period had elapsed.
No. The tax became due in January of this year and the change was made in legislation passed prior to Christmas. To that extent it was not retrospective. It was not retrospective also to the extent, as I have explained, that the companies concerned made certain assumptions which turned out to be wrong. There are precedents for this. The same kind of situation did arise in the past.
Has the Minister had representations from firms that, as a result of this particular action, they have found themselves in grave financial circumstances?
I do not think it would be true to say I have received such representations officially from individual firms. Unofficially, I have heard that there are certain people saying they object strongly to this and I know some public statements were made, but they were not directed specifically to me; this is the kind of thing that normally happens when any section of the community finds itself being taxed in a particular way.
Did a firm make representations to the effect that a grant they had got for building a new factory was being taken away and another £100,000 along with it by virtue of the operation of this tax?
That case was made to me in the course of a deputation which met the Taoiseach and myself. I am trying to be precise: I did not receive, as far as I remember, any specific representations from that firm.
The Minister decided there is no grave hardship.
I do not think so, no.
Has the Minister received any representations from the Confederation of Irish Industries?
I have.