Financial Resolution No. 4: Stamp Duties.

The Taoiseach

I move:

(1) THAT in this Resolution–

"Principal Act" means the Stamp Duties Consolidation Act, 1999;

"Commissioners" means the Revenue Commissioners;

"Schedule 1" means Schedule 1 to the Principal Act.

(2) THAT–

(a) sub-paragraph (a) of paragraph (4) of this Resolution shall have effect with respect to bills of exchange (other than cheques) and promissory notes drawn on or after 1 January 2003 and with respect to cheques drawn on or after 5 December 2002,

(b) subject to paragraph (3) of this Resolution, sub-paragraphs (b) and (c) of paragraph (4) of this Resolution shall have effect as respects instruments executed on or after 4 December 2002,

(c) sub-paragraph (a) of paragraph (5) of this Resolution shall have effect as respects cash cards and combined cards valid at any time after 4 December 2002 which are included in any statement which falls to be delivered by a promoter under section 123 of the Principal Act after that date,

(d) sub-paragraph (b) of paragraph (5) of this Resolution shall have effect as respects any statement which falls to be delivered by a promoter under section 123A of the Principal Act on or after 5 December 2002, and

(e) sub-paragraph (c) of paragraph (5) of this Resolution shall have effect as respects any statement which falls to be delivered by a bank or a promoter under section 124 of the Principal Act on or after 5 December 2002.

(3) Paragraph (2)(b) of this Resolution shall not apply to sub-paragraphs (b) and (c) of paragraph (4) as respects any instrument executed before 1 March 2003, where–

(a) the effect of the application of paragraph (2)(b) would be to increase the duty otherwise chargeable on the instrument, and

(b) the instrument contains a statement in such form as the Commissioners may specify, certifying that the instrument was executed solely in pursuance of a binding contract entered into prior to 4 December 2002.

(4) THAT Schedule 1 is amended –

(a) in the Heading ‘BILL OF EXCHANGE or PROMISSORY NOTE' by substituting €0.15 for €0.08 in each place where it occurs,

(b) by substituting the paragraphs set out in Part 1 of the Schedule to this Resolution for paragraphs (7) to (14) of the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance', and

(c) by substituting the sub-paragraph set out in Part 2 of the Schedule to this Resolution for subparagraph (b) of paragraph (3) of the Heading LEASE.

(5) Part 9 of the Principal Act is amended–

(a) in section 123:

(i) in subsection (1)–

(I) by substituting the following for the definitions of card account and cash card:

"‘card account' means an account maintained by a promoter to which amounts of cash obtained by a person by means of a cash card are charged or to which amounts in respect of goods, services or cash obtained by a person by means of a combined card are charged;

‘cash card' means a card, not being a combined card, issued by a promoter to a person having an address in the State by means of which cash may be obtained by the person from an automated teller machine;",

and

(III) by inserting the following definition after the definition of cash card:

"‘combined card' means a cash card which also contains the functions of a debit card within the meaning assigned to it by section 123A;",

(ii) in subsections (2) and (11)(c) by substituting “cash cards and combined cards” for “cash cards”,

(iii) in subsections (3)(a), (3)(b) and (9) by substituting “cash card or combined card” for “cash card”,

(iv) in subsection (3) by substituting the following for paragraph (c):

"(c) if the cash card is a replacement for a cash card, or a combined card is a replacement for a combined card, which is already included in the relevant statement,”, and

(v) by substituting the following for subsection (4):

"(4) There shall be charged on every statement delivered in pursuance of subsection (2) a stamp duty at the rate of €10 in respect of each cash card and €20 in respect of each combined card included in the number of cash cards and combined cards shown in the statement.",

(b) by inserting the following section after section 123:

"123A.–(1) In this section–

‘accounting period' has the same meaning as it has for the purposes of section 27 of the Taxes Consolidation Act, 1997;

‘bank' means a person who holds a licence granted by the Central Bank of Ireland under section 9 of the Central Bank Act, 1971;

‘building society' means a building society which stands incorporated, or deemed by section 124(2) of the Building Societies Act, 1989, to be incorporated, under that Act and includes a company registered under section 106 of that Act;

‘card account' means an account maintained by a promoter to which, amongst other possible amounts, amounts in respect of goods, services or cash obtained by a person by means of a debit card, within the meaning of this section, are charged;

‘debit card' means a card, not being a combined card within the meaning assigned to it by section 123, issued by a promoter to a person having an address in the State by means of which goods, services or cash may be obtained by the person and amounts in respect of the goods, services or cash may be charged to the card account;

‘due date' means –

(a) in case of the year 2002, the date of the end of the accounting period ending in the year 2002, where that date is on or after 5 December 2002, and

(b) in the case of the year 2003 and each subsequent year, the date of the end of the accounting period ending in that year;

‘promoter' means a bank or a building society.

(2) A promoter shall, within 2 months of the due date falling in the year 2002 and, within 1 month of the due date falling in the year 2003 and each subsequent year, deliver to the Commissioners a statement in writing showing the number of debit cards issued at any time by the promoter and which are valid–

(a) in the case of the year 2002, at any time during the period from 5 December 2002 to the due date,

(b) in the case of the year 2003, at any time during the accounting period ending in that year but not before 5 December 2002 where that date falls within the accounting period, and

(c) in the case of the year 2004 and each subsequent year, at any time during the accounting period ending in that year.

(3) Notwithstanding subsection (2)–

(a) if the debit card is not used at any time during any period referred to in paragraph (a), (b) or (c) of subsection (2),

(b) if the debit card is issued in respect of a card account –

(i) which is a deposit account, and

(ii) the average of the daily positive balances in the account does not exceed €12.70 in any of the periods referred to in paragraph (a), (b) or (c) of subsection (2), or

(c) if the debit card is a replacement for a debit card which is already included in the relevant statement,

then it shall not be included in the statement relating to such period.

(4) There shall be charged on every statement delivered in pursuance of subsection (2) a stamp duty at the rate of €10 in respect of each debit card included in the number of cards shown in the statement.

(5) The duty charged by subsection (4) on a statement delivered by a promoter pursuant to subsection (2) shall be paid by the promoter on delivery of the statement.

(6) There shall be furnished to the Commissioners by a promoter such particulars as the Commissioners may deem necessary in relation to any statement required by this section to be delivered by the promoter.

(7) In the case of failure by a promoter to deliver any statement required by subsection (2) within the time provided for in that subsection or of failure to pay the duty chargeable on any such statement on the delivery of the statement, the promoter shall be liable to pay, by means of penalty, in addition to the duty, interest on the duty at the rate of 0.0322 per cent for each day or part of a day from the date to which the statement relates (in this subsection referred to as the due date) to the date on which the duty is paid and also, by means of further penalty, a sum of €380 for each day the duty remains unpaid after the expiration of one month from the due date and each penalty shall be recoverable in the same manner as if the penalty were part of the duty.

(8) The delivery of any statement required by subsection (2) may be enforced by the Commissioners under section 47 of the Succession Duty Act, 1853, in all respects as if such statement were such account as is mentioned in that section and the failure to deliver such statement were such default as is mentioned in that section.

(9) A promoter shall be entitled to charge to the card account the amount of stamp duty payable in respect of the debit card by virtue of this section and may apply the terms and conditions governing that account to interest on that amount.

(10) An account, charge card, company charge card or supplementary card within the meaning, in each case, assigned to it by section 124 and which attracts the payment of the stamp duty payable by virtue of that section shall not attract the payment of the stamp duty payable by virtue of this section.

(11) Where a promoter changes its accounting period and, as a result, stamp duty under this section would not be chargeable or payable in a year (in this section referred to as ‘the rel evant year'), then the following provisions shall apply:

(a) duty shall be chargeable and payable in the relevant year as if the accounting period had not been changed,

(b) duty shall also be chargeable and payable within one month of the date of the end of the accounting period ending in the relevant year, and

(c) the duty chargeable and payable by virtue of paragraph (b) shall, subject to subsection (3), be chargeable and payable in respect of debit cards issued at any time by the promoter and which are valid at any time during the period from the due date as determined by paragraph (a) to the due date as determined by paragraph (b).”, and

(c) in section 124–

(i) in subsection (1)(c) and in subsection (2)(d)(ii), by substituting “€40” for “€19”, and

(ii) in subsection (2)(c), by substituting “€20” for “€9.50”.

(6) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

SCHEDULE

STAMP DUTY ON INSTRUMENTS

Part 1

Conveyance or Transfer on Sale of any property other than stocks or marketable securities or a

policy of insurance or a policy of life insurance

“(7) Where the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €10,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €10,000:
for the consideration which is attributable to property which is not residential property	Exempt

(8) Where paragraph (7) does not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €20,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €20,000	1 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.
(9) Where paragraphs (7) and (8) do not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €30,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €30,000	2 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

Where paragraphs (7) to (9) do not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €40,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €40,000	3 per cent of the considerationwhich is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(11) Where paragraphs (7) to (10) do not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €70,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €70,000	4 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(12) Where paragraphs (7) to (11) do not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €80,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €80,000	5 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.
(13) Where paragraphs (7) to (12) do not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €100,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €100,000	6 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(14) Where paragraphs (7) to (13) do not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €120,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €120,000	7 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(14A) Where paragraphs (7) to (14) do not apply and the amount or value of the consideration for the sale which is attributable to property which is not residential property does not exceed €150,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–

(a) wholly attributable to property which is not residential property, or

(b) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €150,000	8 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to property which is not residential property exceeds €150,000	8 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(14B) Where paragraphs (7) to (14A) do not apply and the amount or value of the consideration for the sale is wholly or partly attributable to property which is not residential property	9 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.”.

Part 2

Lease

“(b) where the consideration, or any part of the consideration (other than rent), moving either to the lessor or to any other person, consists of any money, stock or security, and–

(i) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €10,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €10,000:

for the consideration which is attributable to property which is not residential property	Exempt.

(ii) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €20,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €20,000 and clause (i) does not apply	1 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(iii) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €30,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €30,000 and clauses (i) and (ii) do not apply	2 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(iv) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €40,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €40,000 and clauses (i) to (iii) do not apply	3 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(v) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €70,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €70,000 and clauses (i) to (iv) do not apply	4 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(vi) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €80,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €80,000 and clauses (i) to (v) do not apply	5 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.
(vii) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €100,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property,

and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €100,000 and clauses (i) to (vi) do not apply	6 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(viii) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €120,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €120,000 and clauses (i) to (vii) do not apply	7 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(ix) the amount or value of such consideration which is attributable to property which is not residential property does not exceed €150,000 and the lease contains a statement certifying that the consideration for the lease is, as the case may be–

(I) wholly attributable to property which is not residential property, or

(II) partly attributable to residential property, and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to property which is not residential property exceeds €150,000 and clauses (i) to (viii) do not apply–	8 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.

(x) the amount or value of such consideration is wholly or partly attributable to property which is not residential property and clauses (i) to (ix) do not apply	9 per cent of the consideration which is attributable to property which is not residential property but where the calculation results in an amount which is not a multiple of €1 the amount so calculated shall be rounded down to the nearest €.”.

This resolution provides for increases in stamp duty for non-residential property and for various financial cards and cheques. Stamp duty is a good contributor to the Exchequer and this helps to fund public services while keeping the direct tax burden low thereby facilitating continued economic success. Stamp duty on the items in question has not been increased for several years and it is, therefore, appropriate that an increase in stamp duty be made at this time to assist the Exchequer.

As regards non-residential property, the resolution provides for a change in the stamp duty rates and threshold structure on conveyances, transfers and leases of non-residential property. At present, there is an exemption from stamp

duty on such property up to €6,350 and, thereafter, stamp duty is charged at rates of 1% to 6%, with the top rate being applied to amounts in excess of €76,200. The various threshold amounts will now be increased so that an exemption from stamp duty will apply on the property up to €10,000.

Mr. Hogan

What property could one buy for €10,000?

The Taoiseach

Thereafter, stamp duty will be charged at the existing rates at higher thresholds up to 6% and this rate will now be applied to amounts in excess of €80,000, but not exceeding €100,000. Three new higher rates are being introduced – 7% for non-residential property valued between €100,001 and €120,000, 8% for non-residential property valued between €120,001 and €150,000 and 9% for non-residential property valued over €150,000.

Changes have been made to the stamp duty on residential property in recent years, but no amendments have been made to the non-residential property rates and thresholds since 1 September 1990. While the top rate of stamp duty for certain categories of residential property is now 9%, the top rate for non-residential property has remained at 6%. The new rates now being introduced will ensure that the top rate of 9% will exist for both residential and non-residential property.

The new structure will apply for conveyances, transfers and for the premium element in leases of non-residential property executed on or after 4 December 2002, subject to certain transitional arrangements. These transitional arrangements will apply where the purchaser has a binding contract in place before today and, in such cases, the old rates and thresholds will continue to apply where the conveyance, transfer or lease is executed before 1 March 2003. The additional yield, as a result of these changes, is expected to be €118 million in 2003 and €158 million in a full year.

This resolution also provides for an increase in the stamp duty charged on bills of exchange, including cheques, and on promissory notes, as well as on various financial cards. It also provides for the introduction of an annual stamp duty charge on Laser cards.

The rate of stamp duty on bills of exchange, including cheques, and on promissory notes will be increased from eight cent to 15 cent. The increased rate will apply for cheques supplied by financial institutions to customers on or after 5 December 2002 and for other bills of exchange and promissory notes drawn on or after 1 January 2003.

The rate of stamp duty on credit cards and charge cards will be increased from €19 to €40 per annum. This rate will apply to accounts, in the case of credit cards, and to cards, in the case of charge cards, to be included in the appropriate returns to be sent by a banker or promoter to the Revenue Commissioners on or after 5 December 2002.

The stamp duty rate for ATM cards which do not have a Laser function will be increased from €6.25 to €10 per card per annum. Stamp duty will be introduced for Laser cards. Regarding Laser cards which do not have an ATM function, the rate will be €10 per card per annum. Where cards have a combined ATM and Laser function, the stamp duty rate will be increased from €6.25 to €20 per card per annum. The increased rate for ATM and combined cards, as well as the new charge for Laser cards, will apply in respect of cards which are valid at any time on or after 5 December 2002 and are included in the appropriate return to be sent by a bank or a building society to the Revenue Commissioners on or after that date.

The stamp duty rates on many of these items have not been increased for many years. For example, the stamp duty charge on cheques has not been increased since 1984, while the rate of stamp duty on credit cards and charge cards has not been increased since 1992. This has resulted in a reduction in real terms in the rate of these duties, given that the increase in the consumer price index between 1984 and mid-October 2002 has been about 77% and the corresponding increase between 1992 and mid-October 2002 has been of the order of 34%. No stamp duty was charged on Laser cards in the past as it was a relatively new concept that also needed to be promoted. However, they are now used widely and all of these products are now well embedded in the financial system.

The additional yield, as a result of these changes in the stamp duty charged on the various financial cards and cheques, is estimated to be €51 million in 2003 and €52 million in a full year.

An Ceann Comhairle

There are a number of Deputies offering to speak and less than 25 minutes remaining so I ask Deputies to be brief and not go outside the terms of this particular resolution, which refers specifically to stamp duty on non-residential property, credit, ATM, Laser and charge cards and promissory notes.

Mr. Hogan

It is against the background of the increasing costs to business that we are opposing the imposition of extra stamp duty. Increasing stamp duty costs on commercial property transactions to 9% is another additional cost at a time when there are two million square feet of vacant commercial property in the north Leinster area generally. The Tánaiste, in particular, will be well aware of the escalating costs to business and the deterioration in the competitiveness of the economy, about which she has done nothing. She will also be aware that we have now dropped from fifth to 24 in terms of world competitiveness according to the World Economic Forum report.

There is an imposition of stamp duty for financial transactions for business and individuals, which is anti-consumer in nature, and an imposition of additional stamp duty on people in the commercial sector who wish to create employment. Is there any semblance of pro-enterprise activity left in the Progressive Democrats?

Where has Deputy McDowell gone, a man who is an expert on everything? He is a spokesman on everything these days.

Mr. Connaughton

Inside and outside the House.

Mr. C. Lenihan

He is over here.

Mr. Hogan

I did not hear him recently on these issues—

Mr. Ring

Deputy Conor Lenihan has a second job today as a journalist.

Mr. Hogan

I cannot understand that the Minister for Justice, Equality and Law Reform does not have a view on the deterioration of competitiveness in the economy. He had views on Ceaucescu before the election, and on single-party government, to which he said "No thanks." He had great difficulty with all the issues of the day before the election, but since then he seems to have turned a blind eye to the escalating costs to the consumer and business.

The Deputy is responsible.

Mr. Ardagh

There is a shortage in relation to income tax—

An Ceann Comhairle

The Deputy without interruption, please.

Mr. Ardagh

We would all like to see a much greater boost in revenue from income tax, but because the world economy has gone down—

Deputy Stagg, I ask you not to interrupt.

Mr. Ardagh

Surely it is equitable that those investors who are in the business of buying non-residential property should pay at least equivalent to what we, the householders, are currently paying. That is reasonable.

Mr. M. Smith

Hear, hear.

Mr. McDowell

The socialists are against them.

Mr. Ring

That is why we are over here and the Deputy is over there.

Mr. Kenny

The Minister is very lucky to be in that seat.

An Ceann Comhairle

Minister Smith, I ask you to allow Deputy Ardagh to continue without interruption.

Mr. Ring

He will be over here.

Mr. Ardagh

Thank you, a Cheann Comhairle, for the protection.

Mr. M. Smith

Gabh mo leithscéal.

Mr. Timmins

A minimum 19% in the Estimates.

Mr. Ardagh

We are an affluent society in comparison to that which existed in 1996. Over the past five years, this Government has assured that the average income of all the people has increased dramatically and, as a result, many of us now use cheque books.

Mr. Ring

Does the Deputy sign them?

Mr. Ardagh

We have ATM, Laser and credit cards. Surely it is not unreasonable that a small charge would be applied to the use of each of those cards.

Mr. Kenny

Tell that to the housewife tomorrow morning.

An Ceann Comhairle

Allow the Deputy to continue without interruption.

Mr. Ardagh

This is a minor amount in comparison to the items the Deputies opposite are seeking.

It is reasonable that a charge for a service which is used is applied, in the same way as it is reasonable to apply a charge on people who use water and have their garbage collected. If people use the service, they must pay for it.

Mr. Coveney

How will local authorities raise the revenue?

Mr. Ardagh

I support the resolution.

Mr. Connaughton

A Cheann Comhairle, is there a time limit on the contribution? There was a time limit a few moments ago.

An Ceann Comhairle

No. The Chair did not impose a time limit on any Member, Deputy.

Mr. Connaughton

You gave an indication that you would call Members from all sides of the House. I do not want to say a word against Deputy Ardagh but I think we are looking at a set piece.

Mr. McCormack

Filibuster.

An Ceann Comhairle

Deputy Connaughton, you are being disorderly now. If Deputies would not interrupt and if they allowed each Deputy to make their contribution, perhaps we could facilitate more Deputies.

Mr. McDowell

And the price of offices will come down.

The Minister would not know anything about that.

A Cheann Comhairle, I want to allow other colleagues to speak.

Mr. Curran

This is my first time to speak in a budget debate. I listened to Deputy Rabbitte and I admit I am somewhat confused.

Mr. Ring

So tax everybody, is that it?

Mr. Curran

This is my first opportunity to speak and I am trying to direct my comments through the Chair. It is a balanced budget to achieve a wide range of objectives. I admit this is an additional burden of tax, but what will it be? If an investor buys a property and lets it to a business, the business will ultimately pay a higher rent. The return to the Exchequer will be approximately €50 million but it is a balanced budget and if Deputy Hogan was here I would put that to him.

There has also been a reduction in the rate of corporation tax, from 16% to 12.5%. If that was a matter for debate now, Deputies on the other side of the House would probably argue that the money lost from such a reduction could have been used to fund services. However, this balanced budget will achieve a wide range of objectives. It is wrong to cherry-pick issues such as arguing that the increase in stamp duty on commercial property amounts to a tax on business and a disincentive. That argument cannot be made in isolation. The wider aspects of the budget favour business.

Mr. Cuffe

This measure effectively amounts to a 50% increase in stamp duty on commercial property. For the bulk of commercial properties the increase will be from 6% to 9%. That represents a heavy anti-business tax and is not the right way to proceed.

Stamp duty is an invidious tax as it acts as a disincentive to move to an appropriate building. In the residential sector it prevents empty nesters, for example older people, from moving down to a smaller house that might be more appropriate to their needs. The same trend will emerge in the commercial sector where businesses will strain at the seams or under-occupy larger buildings.

Stamp duty is also not a good tax from a business point of view. It will reduce competitiveness in the commercial area and act as a disincentive to businesses of all sizes to move to appropriate premises. This will affect our international competitiveness. It would be much better to tax business in a more streamlined manner.

Mr. McDowell

How would the Deputy propose to raise revenue forgone from the abolition of stamp duty?

Mr. Cuffe

To raise €185 million a fractional increase in corporation tax would be a more appropriate step to take. I would welcome the views of IBEC and other business groups because this measure acts as a significant disincentive and reduces Ireland's competitiveness. My party colleagues and I will vote against it.

Very few could afford ATM or credit cards then.

The Taoiseach

It was also introduced for cheques. Investors in commercial properties such as offices are usually bodies such as pension funds, life assurance companies and corporate investors. They will not switch to residential property where investors are individuals. Two issues are being confused here. However unusual, I appreciate the right of the parties of the left to favour the activities of pension funds, life assurance companies and corporate investors in the commercial sector against the interests of those involved in the residential market. Pension funds and life assurance companies are not interested in the property market. The few which were in it thought they would never get out of it and are unlikely to re-enter.

The new rates will increase the stamp duty exposure for commercial operations. They must be seen in the context of a competitive corporation tax regime of a 12.5% tax on profits. I ask Members on the other side of the House to reflect on what they are saying. On the one hand, they argue that we did not take enough from the corporate sector while, on the other hand, they seek to defend the sector when we have taken money from it. They must make up their minds on where they stand.

We have reduced capital gains tax from 40% to 20% and the income tax burden has been significantly reduced over successive budgets. In addition, the stamp duty payable by purchasers is an allowable deduction for capital gains tax purposes. Stamp duty provides approximately 4.5% of the total tax take. While it will not affect competitiveness, the corporation tax rate will. It makes no sense to argue against the reduction in the corporation tax rate to 12.5% while also arguing against the changes in stamp duty.

We are seeking in the budget to ensure there is a reasonable take from stamp duty headings in order that those who make and have made substantial profits for the last seven or eight years from the commercial sector pay a reasonable amount of tax. The Minister has tried to increase stamp duty as a proportion of total tax receipts. The proportion increased to 4.2% in 2000 and 4.4% in 2001.

He is being ridiculed in this House tonight because he is trying to take some more tax from what are normally called the fat cats but tonight they are the angels – the insurance companies and pensions and life funds. I am sure I will not be disappointed in this vote.

Dáil Éireann díospóireacht - Wednesday, 4 Dec 2002

A Deputy

Dáil Éireann díospóireacht -
Wednesday, 4 Dec 2002