asked the Minister for Energy if Tara Mines Ltd. have yet paid any royalties to the State; if so, the amount; if he will say if he has yet decided the action to be taken in regard to the possible liability of the company for royalty which he referred to in reply to Parliamentary Question No. 277 of 22 January 1985; if in view of the failure of Tara to pay royalties, he has any plans to renegotiate their mining lease; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Tara Mines Ltd.
14.
As I pointed out in reply to a previous question from the Deputy, the State mining lease granted to Tara Mines Ltd. on 19 September 1975 provides for the payment of a royalty of 4½ per cent of the profits of the company as assessed by the Revenue Commissioners for purposes of corporation profits tax. The profits of the company for tax purposes since the commencement of trading have not yet been agreed with the Revenue Commissioners and consequently no payment of royalty have been made. The computation of the profits is a complex exercise and is still the subject of correspondence between the inspector of taxes and the company's accountants.
I do not at this stage have any plans to renegotiate the Tara mining lease, the effect of which was to provide for a total State take of about 66 per cent as compared with about 8 per cent from earlier leases. The Deputy may be assured that the State's rights will be enforced to the full and in this connection he may recall the vigorous action which was taken last year to prevent the issue of redeemable preference shares which would have seriously prejudiced those rights. The delay in the receipt of payments by the State has been due to the very heavy capital cost in getting the mine into production and the severe financial losses sustained in the initial years because of low metal prices, industrial relations problems and other factors.
I asked similar questions in June 1984 and January 1985 and now I get the same reply from the Minister in June 1985. The Minister said that the matter of negotiating the tax due is a complex one. In his previous reply in January the Minister said the profits of the company for tax purposes since trading commenced on 1 January 1985 had not been agreed with the Revenue Commissioners. The Minister is now saying it has still not been agreed.
A question, please, Deputy.
The question I am asking is contained in the one on the Order Paper. What has the Minister done in relation to his reply of January when he said that having regard to that situation consideration would be given to the question of what option might be taken with regard to the possible liability of the company for royalty? What has the Minister done about that? He realised in January that the tax problem was preventing the collection of royalties.
The next two questions are in the name of the Deputy's party. If he is deprived of asking supplementary questions on them he should not blame me.
This matter is a complex one and is under negotiation between the company and the inspector of taxes. I assure the Deputy and the House that the State's rights in this matter will be fully protected and if any action needs to be taken by me at any stage I will take it.
I have not received a reply to my question. We are all well aware that no royalties have been paid despite a profit of £12½ million being returned by the company last year.
The Deputy, consciously or otherwise, is wasting his own time.
I am asking the Minister to reply to the question of what he has done about the assurance he gave last January which was that since no royalties have been collected consideration was being given to the question of what action might be taken. He has had six months to give consideration to it but he has not told us what action has been taken.
The matter is a complex one but in time I am satisfied that the royalties due to the State will be paid in full.
The Minister sent a special team of accountants into Tara Mines at the beginning of the year. What were the results of their inquiries?
That is a separate question.
What is the answer?
It is a separate question.
No, it is part of this question. It came up for discussion in January. At that time the Minister begged the indulgence of the House and said he was sending a team into the mine. Have they reported and was it worth the exercise?
If the Deputy puts down a question on the matter I will answer it.
This new Question Time was brought in with a certain spirit of co-operation from both sides. The Minister knows quite well in giving a smart answer like that that these questions are here by lottery. My supplementary question is directly related to the question. The Minister is hiding behind the exercise of sending in a team of accountants from a well known Dublin firm of accountants. He made a big announcement about it but obviously nothing was found and he is not prepared to admit that.
The Deputy is wasting time.
Now perhaps we will get an answer.
I have already answered the question.
The Minister has not.
If the Deputy wishes to put down a question on the lottery basis or on the priority basis I will be happy to answer it.
The Minister has not answered it and has no answer to it but he made a big deal out of it last January.