I should like to share my time with Deputy Bradford.
Adjournment Debate. - Self-Employed Forestry Workers.
I am sure that is satisfactory and agreed.
I thank you, Sir, for allowing me to raise the plight facing the self-employed workers in Coillte forestries who are being refused C2 certificates by tax districts in my region and to inquire whether there is a national policy by the Revenue authorities to refuse applications. Many of these workers have put in a considerable amount of their own finances into equipping themselves for this hard work. They have purchased chainsaws, protective gear and tools at their own expense. They are also required to purchase the fuel to run the chainsaws.
I must ask if the people in the Public Gallery would leave as quietly as possible.
These workers also have to pay their own travel expenses to and from the forests; some of the journeys could be 40 to 60 miles from their own homes. Most of them have had to take part in FÁS courses in order to qualify for the work they are doing. When they received their first payment most of them received the total amount due, less 35 per cent tax. This meant that effectively they had worked at a loss. I accept that they can reclaim the extra tax which has been deducted, but the time lapse between the reduction, the repayment claim and the refund is unacceptably long for most of these workers. The amount they receive is not over generous and the deduction of 35 per cent tax means that they are effectively working at a loss. This reduced payment causes extreme hardship for these families.
The operators who approached me regarding the refusal to issue C2 certificates meet the necessary requirements normally requested by the Revenue Commissioners to qualify for these certificates — for example, tax paid up to date, a permanent place of business, etc. However, they have been inexplicably refused these certificates. I have been given to understand that a direction from head office has been issued to the local tax districts — Cork and Waterford are the ones about which I am concerned — that no C2 certificates are to be granted to forestery tree fellers. I ask the Minister to investigate this issue as a matter of urgency. The refusal to issue C2 certificates in this instance has already driven many of these people, who are anxious to work, on to the live register.
I thank Deputy Ahern for sharing his time with me. The problem raised by Deputy Ahern has also been brought to my attention by a number of my constituents. I suppose there is more than a strong possibility that some of the people who have spoken to Deputy Ahern have also been in contact with my office.
I believe this problem has been caused by bureaucracy and red tape. Unfortunately, it is another example of the measures which can prevent employment creation. Many of the people working in the forestry area want to get on with their jobs and in the process hopefully create one or two other jobs. It is most disappointing that the red tape and bureaucracy put in their way are diminishing their desire to work and to create jobs. People at local level who show enterprise and initiative should be given every assistance possible. They should not be hindered in any way, as the regulations governing the issue of C2 certificates seem to do. I appeal to the Minister to do everything possible to remove this further layer of red tape so that these people can get on with their work.
I thank Deputy Ahern and Deputy Bradford for bringing this matter to the attention of the House.
Section 17 of the Finance Act, 1970, provides that contractors in certain industries are required to deduct tax from payments to subcontractors unless the subcontractor has a certificate of authorisation, a C2 certificate, from the Revenue Commissioners. These provisions were extended to the forestry industry by the Finance Act, 1992, to counter widespread abuse of the tax system within the industry.
The requirements for the issue of certificates of authorisation are set out in the law and are designed to ensure that only genuine subcontractors who are likely to comply with their tax obligations qualify. Before issuing a certificate of authorisation, section 17 requires the Revenue Commissioners to be satisfied that (i) the person is, or is about to become, a subcontractor engaged in the business of carrying out relevant contracts including contracts in respect of forestry operations; (ii) the business is or will be carried on from a fixed place of business and that the subcontractor has all the stock, equipment and other facilities that in the opinion of the Revenue Commissioners are necessary; (iii) proper records are kept; (iv) the person and his partners etc., have a record of tax compliance over the previous three years; and (v) there is reason to believe that the person will comply with his tax obligations. The law also allows the Revenue Commissioners discretion to issue a C2 certificate even though the full requirements are not met.
The Revenue Commissioners are obliged to deal with applications for certificates of authorisation in accordance with the law. They are satisfied that the law is being applied to applications from subcontractors in the forestry industry in an even handed fashion throughout the country. In cases where an application is refused the applicant may appeal to the Appeals Commissioners.
As the House knows, during Adjournment debates many points have to be made before one comes to the specific point of interest to the Deputies. I am very aware of this. However, some of the points I have made will obviously be of general interest. Some 70 applications have been received from persons engaged in the forestry industry in the Cork area. The following is the up-to-date position in regard to those applications: applications under consideration, 12; certificates of authorisation issued, 23 and certificates refused because the statutory conditions were not satisfied, 35. Obviously, the latter certificates are those in which Deputies Ahern and Bradford and the other Deputies from the constituency are interested. Appeals have been lodged in 15 out of the 35 cases where a certificate has been refused, and ten of those appeals have been heard to date. It is an indication of the reasonable approach taken by the Revenue Commissioners in relation to these applications that the refusal of the certificate of authorisation has been upheld by the Appeals Commissioners in all ten cases.
As we all know, the absence of a certificate does not preclude a person from carrying out their business, but tax is deducted at 35 per cent. I wish to point out to the two Deputies concerned and other Deputies who may have received representations in regard to this matter that if they wish to submit further information in regard to individual cases I will be glad to bring the details to the attention of the Minister for Finance. I am aware that many people in relevent industries or subsections of industries await the issue of C2 certificates from time to time. I have had experience of this with people in the subcontracting area. These people can quite rightly be very irked at times at the delays in the processing of appeals. The Deputies should submit any further information available to me so that I can bring it to the attention of the Minister for Finance in an effort to ensure that the applications are more speedily processed.