The motion is that this Bill be now considered on Report.
FINANCE BILL, 1923. - FOURTH STAGE.
AN CATHAOIRLEACH
Sections 1, 2, 3, 4 and 5 agreed to.
With regard to Section 6, I move: "To delete in line 26 the words ‘employer of such person' and to substitute therefor the words ‘Secretary of the particular Trade Union of which such person is a registered member, or, if he be not a registered member of any Trade Union, to his employer." I regret that I had not the privilege of being here last week to listen to the discussion on this important Bill, but I read the reports of it very carefully and I know what has happened. I do not want to occupy very much time in speaking on this subject, but I desire to say that there is a very strong objection in the district from which I come in Cork, in the trading community and the Chamber of Commerce, to this idea of employers being called upon to enter upon an entirely new duty and become tax collectors, collecting from employees taxes which will not, obviously, be popular with them. I know that the Government have had unparalleled difficulties to contend with, and everybody gives them infinite credit for the way in which they have carried on their duties and responsibilities throughout the past, and I know also that they are most anxious to work in the closet harmony with both employers and employees and to smooth over any causes for friction and difficulties that may arise between both parties. They have given practical evidence of this even since they assumed office, and I, therefore, am taken by surprise that this suggestion, which is a novel one—I do not think it has been carried out in other countries—should be suggested to be taken up here. Both the employers and the employees, for the most part, are united in objecting to this clause. I have not had the advantage of communicating with the Trade Union Party, and I hope they do not think that I wish to spring this amendment on the Seanad by bringing it forward without consulting them. I went into their offices, but I was not able to get into contact with any of the Labour Senators whom I have had the pleasure of meeting here. I wanted to ask their advice before I brought it forward, and I hope they will not think that I wanted to take any advantage whatever by acting contrary to their wishes in the matter. But, seeing that the Government has priority over everybody else in looking for what is due to them, I venture to hope that they will fall in with the suggestion, which, I submit, is rather a modest one.
I second the recommendation.
I am afraid, A Chathaoirligh, that I could not recommend the adoption of this amendment, which would not achieve the purpose that we have in mind. We know that secretaries of Trades Unions have responsibilities and duties which are very different from that intended in this particular Section dealing with the deduction by employers of certain sums specified due to the Exchequer. The main purpose of this particular Section is to get in this money. In order to get it in we have adopted what appears to us, in the circumstances, to be the best method of collection. We could go to court; we could put extra costs on persons who owe us this money; we could establish machinery which would enable us to collect this money with the least possible burden on the persons affected, and in that connection the duties that will devolve on employers are not particularly onerous, and in getting the assistance of the employers in those cases we are using them very lightly to discharge a public duty. If it be admitted that income tax is a fair method of collecting revenue— and I think it will be admitted—is it not the duty of the Executive to adopt such machinery as will enable them to collect it? Owing to the peculiar circumstances that have prevailed within the last couple of years large sums are in arrears. It is open to the Government to recommend some alternative method of raising these two or three millions which are outstanding. They could impose an extra Corporation tax, or devise some other means of spreading a sum due by one particular section of the community over the shoulders of the whole of the community, but I think it would be admitted that that is inequitable. It has been put forward by some people that because this money was withheld from payment to the British Government at a time when friendly relations did not exist between the British Government and the people of this country, these people, having performed what appeared to be a patriotic action at that time, should not now be penalised. People have paid during that period, some willingly and some unwillingly, but the liability was there in respect of all, and there is no extra liability on the part of those who have not paid—none whatever. They have simply escaped the liability which in the ordinary course was due for discharge over a certain period. It has not been discharged, and the suggestion we have put forward under this clause appears to us to be the best to effect that. Putting in the name of the secretary of the Trades Union or using his services for this purpose would not get us in the money. It is no concern of his. Probably he does not pay income tax himself, and it is no interest to him how it would be collected. He certainly would be called upon to perform the duty outside of his ordinary work, but he would have no means of deducting from the salary or remuneration of persons affected if he were to get this added. Therefore I cannot see my way to recommend the acceptance of this amendment.
AN CATHAOIRLEACH
Do you wish me to put the amendment, Senator Haughton?
No.
Amendment, by leave, withdrawn.
Sections 6, 7 and 8 put, and agreed to.
I beg to move the following recommendation: "That the Seanad recommends that the provisions of Clause 9 of the Bill regarding the exemption of charities be extended so as to apply to the exemption of income tax derived by charities from land or house property." The object is to give the same relief to Free State charities as is enjoyed by charities in Great Britain and Northern Ireland. Under the clause certain charities are exempt in respect of income tax derived from stocks or shares, and it is also proposed to give them relief from income tax derived from land or house property.
I second.
That amendment would be acceptable. The British Government has put up an equivalent clause in their Finance Bill, and it is right and proper that we should give the same consideration here as they are giving over there in respect of citizens of the Saorstát having moneys invested in England. We are giving the same advantage to other persons in Great Britain or Northern Ireland having investments here in the Saorstát.
Amendment agreed to.
Sections 9, 10, 11, 12, 13 and 14 put and agreed to.
As regards Section 15 I beg to move: "To add at the end of Sub-section (1) the words ‘save and except that the Corporation profits tax shall be reduced from 1s. in the pound to sixpence in the pound.'" That will be a rather small concession, which I hope the Government will see their way to adopt. The Corporation tax, as Senators will remember, was adopted on the other side of the Channel during the war period for the specific purpose of raising money, but it has been reduced to sixpence, and inasmuch as this Free State that we all desire, and the vast majority anticipate, will soon see prosperity dawning upon it and new companies being started—Limited Liability Companies—I suggest that the tax of one shilling will largely discourage people in the starting of these new companies. The Corporation tax is only applicable, I take it, to Limited Liability Companies, and is applied for such companies as pay a dividend of 5 per cent. to their ordinary shareholders. Then the shilling comes into force. It largely penalises struggling companies, and especially new companies which are being promoted, and which I hope will be largely promoted in the country. I hope the Government will see their way not to charge more than what they propose to charge across the Channel—that is, sixpence.
I second.
I beg to oppose this. Money has got to be found without a shadow of doubt. We are told by Senator Haughton that it only applies when 5 per cent. has been earned on the moneys invested. That being so, as I am quite satisfied that farmers do not make such a sum at all in their investments, I feel that if this burden was reduced instead of being paid by big corporations, it would apply to poorer members of the community, which I think will not be equitable.
We have adopted practically all the taxes and impositions which had been in force in the previous financial year 1922-23. There was a slight change in respect of certain duties which were imposed, by reason of the fiscal independence of the Saorstát, such as a tax on certain motor cars and a tax on other articles not previously imposed by reason of the fact that our fiscal system was bound up with Great Britain. This year we have got to meet something like £22,000,000 or £23,000,000 of a deficit, and in order to meet that it will be necessary for us to borrow. A good deal of that £23,000,000 is extra expenditure owing to the circumstances of the times. There is a very large expenditure on the Army. Its own estimate, I think, amounts to nearly £11,000,000. There is also included in respect of compensation the sum of £10,000,000. That is to say, there is an estimated expenditure of £20,000,000 this year which can scarcely be regarded as anything but abnormal. The circulation of that amount of money in a particular year ought to bring in its train certain advantages to the business community. No extra tax has been imposed on commerce or business by reason of this fairly big distribution of money. All the taxes, with the exception of the one I have referred to, are practically the same as they were last year. A good deal of criticism was passed on this Bill in the Dáil because of the fact that some of the taxes pressed rather heavily on a section of the community least able to bear them.
Recently in another place when there was a considerable balance in the Exchequer of the Government concerned, there was a sort of all-round reduction of taxation. That is to say that various sections of the community were benefited generally by a reduction in taxation. To take off this particular tax, or rather to reduce it, would be a benefit to one particular section, and a section which is not taxed unless there are profits. The tax was originally introduced, I understand, in 1920, after the war, during a year of remarkable business boom. We are not now in a business boom. but we are certainly partaking in the distribution of a sum of money which we are handing on to our successors to pay. Whatever the length of time may be for which the loan will run, it will certainly be passed on, and we will not bear the burden. We are not even proposing in the Estimates we put up to bear our proportionate share of the interest on the money that will have to be borrowed this year. The actual revenue from this particular tax is very small. It is not worth much at all, and if it were reduced by sixpence we would be nearly inclined to make a present of it altogether.
If the Minister would have no objection to that, I would much prefer it.
Amendment, by leave, withdrawn.
Sections 15, 16, 17, 18, 19, 20, 21 and 22 put, and agreed to.
Bill put through its further stages and passed.