Finance (Customs and Excise Duties) Bill, 1933 (Certified Money Bill)—Committee Stage.

Sections 1 to 6, inclusive, agreed to.

SECTION 7.

(b) the following proviso shall be and is hereby inserted in paragraph 5 of the said Third Schedule at the end of that paragraph, that is to say:—

"In the case of a vehicle to which this paragraph applies and which is not electrically propelled and which exceeds one ton but does not exceeds one and one-quarter tons in weight unladen and in respect of which it is shown to the satisfaction of the Minister for Industry and Commerce that such vehicle was assembled in Saorstát Eireann in a manner and to an extent for the time being approved of by the said Minister, duty shall be charged, levied, and paid in respect of such vehicle at the rate of twenty pounds in lieu of the above-mentioned rate of thirty pounds";

(f) the following proviso shall be and is hereby inserted in paragraph 6 of the said Third Schedule at the end of that paragraph, that is to say:—

"In the case of any vehicle to which sub-paragraph (c) of this paragraph applies and which is not electrically propelled and is not used as a public service vehicle within the meaning of the Road Traffic Act, 1933 (No. 11 of 1933), and which exceeds sixteen horse-power, and in respect of which it is shown to the satisfaction of the Minister for Industry and Commerce that such vehicle was assembled in Saorstát Eireann in a manner and to an extent for the time being approved of by the said Minister, no duty shall be charged or levied in respect of the excess of the horse-power of such vehicle above sixteen horse-power."

Mr. Douglas

I beg to move recommendation 1:—

Section 7. To delete all after the word "unladen" in line 31, page 4, down to and including the word "Minister" in line 36, and to substitute therefor the words "and which is accompanied by a certificate signed by the authorised assembling agent showing that such vehicle was assembled in Saorstát Eireann in a manner and to an extent specified by order made by the Minister for Industry and Commerce and in force at the time such vehicle was assembled."

I fairly well explained on the Second Reading the object I had in view in putting down a recommendation for this Stage. The Minister for Industry and Commerce was not present on that occasion, and perhaps I had better explain again briefly that my principal object is to try to evolve an arrangement which will be quite workable. This is one of the sections under which a person has got to deal with two Ministers, and that is generally more or less unfortunate. The Minister for Finance has just disappeared. It is no reflection upon him if I say that one would prefer to deal only with the Minister for Industry and Commerce, or alternatively with the Minister for Finance. When you have two Ministers to deal with, quite a lot of things are involved. The rating of 16 h.p. will be under the control of the Minister for Finance and the tax of £16 will be collected by the county councils for the Road Fund. The point as to whether a car is qualified for a tax at the 16 h.p. rate will be in the hands of the Minister for Industry and Commerce. That is a difficulty which can be comparatively easily got over in administration and I have no doubt every effort will be made to make the arrangement workable.

We have at the present time a case where a certain kind of car is entitled to pay the road tax at the lower rate. That is a car that happened to be manufactured in a particular year. The late Minister for Finance made a concession, which he did not continue, and we have therefore a peculiar position under which, if your car was manufactured in a certain year, you are entitled to a reduction of 25 per cent. This new arrangement is to be carried out by means of a certificate which will be accepted by the various county councils. I do not know what penalty there will be, but I have no doubt that agents will be liable to a fairly substantial penalty if they give a false certificate.

I take it the object of the Minister will be to get as many cars as possible assembled under these new regulations, in order to increase employment, and he will probably wish to have the car so assembled made as readily saleable as possible. The experience of most motor traders is that when a person makes up his mind to buy a car—he may be thinking over the matter for weeks and eventually decide to buy one—he must have it to go home with, and he expects to be able to get the tax paid and everything arranged on the spot. It is, therefore, essential that there should be no question of doubt as to the payment of tax on one of the cars assembled here; otherwise, a purchaser might not be inclined to buy such a car. There should be some machinery by which the certificate can be issued and attached to the car. One can easily recognise a car by means of the chassis and engine numbers. As the section stands, it is extremely vague. It may be purposely so, but I think it is unsatisfactorily vague.

As the section stands, a car is entitled to the lower rate of tax if it is shown to the satisfaction of the Minister for Industry and Commerce that the vehicle was assembled in the Saorstát in a manner for the time being approved by the Minister. I expressed a doubt here as to the meaning of the words "for the time being." I have been since informed that the meaning is at the time the car was assembled. I understand certain cars are being assembled here at the moment, and no definite authority as to what is to be regarded as assembling has been issued yet by the Minister. No doubt that matter is in contemplation. In the absence of such an authority, it might be difficult to prove that a car assembled to-day is assembled in what the Minister may regard as a satisfactory manner.

I am going on the assumption, which I took from the Minister's speech in the Dáil, that it is the intention to fix a particular standard of assembly, and ultimately he intends to make that provision stiffer in order to increase employment. I am not disputting the wisdom of that. I am merely assuming that the standard assembly will be greater or higher, as the case may be, in the future. If it is going to be possible for motor traders to make arrangements with American manufacturers, they will have to be able, immediately, to get something in writing which will be definitely authoritative and which they can send to those manufacturers and so endeavour to make arrangements with them. Otherwise, unless they are very wealthy, they could not take the risk of getting in considerable numbers of parts and find afterwards that the work they have carried out could not be regarded as an assembly.

The reason I put down the recommendation is to try to set out the only practical working arrangement, and that is, that the Minister should make an order and that order, when made, shall be at any rate an understanding that it will operate for three or six months, so that firms getting parts will have reasonable time to assemble them. When a car has been assembled there should be some easy way in which a certificate could be given to the effect that the car has been assembled in accordance with a specific order made by the Minister. I think it is exceedingly important that there should be an order made, because then it will be scrupulously fair to all firms and there can be no doubt about it. I also think it is very important that the Minister should give some undertaking that when he makes any order he will not make it stiffer for a reasonable period, and when I say a reasonable period I mean such period as would give security to the firms who get in their parts to get them assembled. Otherwise the risk of getting in parts of cars would be very considerable if they did not come under the order. I need hardly point out that the effect of this order will be to make it increasingly difficult to sell American cars that have not been assembled here. That, I take it, is the Minister's desire and is the object of the order. Therefore any firms who bring in parts and then find, owing to the lapse of time, that they cannot assemble them, will be placed in much difficulty because they will be liable to the 26 or 28 horse-power tax when a similar car would be only subject to the tax at the 16 horse-power rate. My object is to make the tax fair to all firms. When the Minister is replying I would be glad if he would make a statement as to when he will be in a position to make a public statement on these matters. Senators know that I am connected with one firm of motor car people, and I have also been approached by another firm who asked me to find out what will be regarded as assembling a car or what is meant by the assembling of a car. The Minister's speech was purposely vague. He used the word "knock-down." That can be very vague. It would be a great help in speeding the matter up if he would say when that statement would be available.

Mr. Lemass

I gather from the speech to which I have listened from Senator Douglas, and also his remarks on the second Reading, which I have seen in the Official Report, that the questions he wants answered are (1) is there to be a certificate attached to the car, something which can be transferred with the car, so that the assembler can sell something, the existence of which is known to be there and cannot be questioned? (2) who is to issue the certificate? (3) what the life of that certificate will be? Is it liable to cancellation or revocation, under any circumstances? Then in the next group he wants to know what is to be the degree of assembly which would qualify a car for a certificate, and whether that degree of assembly is to be prescribed by order or otherwise? It is intended that there shall be a certificate issued to the person who assembles the car, a certificate which will be attached to the car, and which will be to the effect that the particular car, setting out its engine number, body number, seating capacity and such information which may be set out, has been assembled to the satisfaction of the Minister for Industry and Commerce in Saorstát Eireann, in the manner and to the extent approved of by the Minister. That certificate, when issued, will not be subject to revocation even if a new definition of an "assembly" is brought into operation at a later date. That certificate will still hold good even if there is a new definition of "assembly," and under that certificate the terms of this Bill will operate in respect of the car.

We cannot say that at no time in the future will the rate of taxation upon cars be changed. It may be changed, and we cannot give any guarantee that no variation in taxation will be adopted, but so long as the law provides for a differential rate of taxation upon cars assembled in Saorstát Eireann, then that certificate will qualify that car for the benefits of that differentiation. I do not think that we should agree to the certificate being issued by the assembler. I do not think Senator Douglas will press that view. I gather from his remarks that he put forward that suggestion in order to ensure that that certificate would be available for the car and that it would not be necessary for the owner to make his case to the Minister for Industry and Commerce direct when the occasion for paying the tax arises. The person who assembles the car will, no doubt, when it is ready for sale, seek a certificate and obtain it. I gather that no special difficulty of an administrative kind will arise in that direction.

Mr. Douglas

Who will issue that certificate?

Mr. Lemass

It will be issued by the Department of Industry and Commerce. When the purchaser comes in to purchase a car he purchases the car and the certificate and he pays his tax at the rate required, getting whatever benefit he is entitled to get in consequence of having this certificate. Settling by order the amount of assembling that must take place to qualify the car for the certificate is one of considerable difficulty. I would prefer that we would not have to make a general order to apply to all classes and makes of cars and liable only to variations by another order which would be equally applicable to all makes of cars. The scheme of construction of the different makes of cars varies considerably. Whereas in the case of one car the definition of "assembling" might permit of certain facilities being granted to the assembler to get over mechanical difficulties, a similar concession might not be required by another assembler but another concession instead.

The experience arising from our efforts to secure the assembling of cars in this country show that there is a very wide variety in the designs and very frequently what is a simple operation in respect of one make of car is very difficult in respect of another. Consequently we have to frame the certificate in such a form that it will enable us to meet these difficulties when they arise. Our intention, subject to minor variations of that kind, is to permit the concession to be secured by any person assembling a car in respect of the chassis on the basis of the importation subject to the minimum rate of duty of certain assembled parts, that is, the "knocked-down" chassis, as it is called in the trade. In the case of persons importing the body in the shell, that is, unpainted and un-upholstered shell, we may at a later stage require that the shell be completely assembled and that the engine and transmission of the car will also be assembled. But for a time we will be quite satisfied with the assembling of the chassis and the completion of the shell.

The granting of facilities under this Bill in no way affects the import duty. The person who imports the chassis and the body completely unassembled gets them in free of duty. The person who gets the assembled parts mentioned in the Finance (No. 4) Act, 1932, pays 10 per cent. of the duty provided for in the Bill. If he imports other parts he pays the full rate of duty. It is similar in the case of the body. On the completely unassembled parts of a body, no duty is chargeable but on the shell, unglazed and unfitted in any way, there is another rate of duty—26 2-9ths per cent. duty—chargeable. That duty will continue to be chargeable. The position, therefore, in regard to the import duty is that the inducement to persons engaged in the assembling of cars, to import the different parts unassembled, or only partly assembled, will remain. This concession will be given for a considerable time to come in respect of cars where the chassis is assembled subject to certain of the more difficult parts being imported at a lower rate of duty and the body is imported in the form of a shell and finished here. I agree it is desirable that no change in that position should be made without due notice and that firms likely to invest capital in the business of assembling cars in consequence of that definition will not be prejudiced.

Those who are at present interested in this business have been in touch with my Department and have been fully informed as to what the intentions are. Other firms have also approached us with a view to getting information and exploring the position. Any firm that is likely to be interested in the matter can get from the officers of my Department full information as to our intentions. No difficulty will be experienced in committing the Government in the manner in which we frequently commit ourselves, in relation to customs duties and other matters, not to effect changes within a defined period: not to effect changes without prior and adequate consultation with the parties who have acted on the position created by us and who have invested their money in certain processes. Consequently, I think interested firms will be adequately secured, or can get themselves adequately secured, against any violent change in the definition of assembly before embarking upon the enterprise. They can embark upon the enterprise with the full knowledge of what is intended. I can assure them that it is not intended that there should be any change at all in the original position fixed for some very considerable time, and I have a much longer period than six months in contemplation in that regard. Certainly before any change is made the firms who are engaged in partial assembly work will be fully consulted and their difficulties investigated with a view to seeing that nothing is put in their way as regards getting them to give more work in the Saorstát than had been the case previously. In the majority of cases there are technical difficulties which are easily recognisable and in respect of which certain concessions have to be made. Up to the present no difficulty has been experienced in giving those concessions. In every case, where the volume of business, the make of car or the equipment of the firms concerned permits of a much more substantial degree of assembly without increased cost or great hardship, then we take a different line, but up to the present the arrangements made have been found to work fairly satisfactorily, and I am satisfied that they will be found to work equally satisfactorily in regard to this concession.

Mr. Douglas

I am glad that I put down this recommendation if it was only to get from the Minister the statement he has just made, a statement which will go a long way to clear up the position for some people who have approached me. To make the position if possible still more clear, I want to ask him a very specific question. I gather from the Minister's remarks that the test of what is to be an assembly will not be the same in every case. It will, of course, have to be a substantial assembly, but I gather it will have regard to particular circumstances, either to the peculiarities of a particular make of car or to the circumstances of the firms who are the agents here and propose to have the assembly work done here. In view of the Minister's statement I would not think of pressing the recommendation which was put down on the Order Paper on the assumption that the Minister intended to have the one standard. Naturally, I was anxious that that one standard should be made clear as soon as possible. A number of firms, as a result of reading the report of the Minister's speech in the Dáil, were not certain whether it would be at all possible for them to assemble cars here under this arrangement. Up to a few days ago they had not been able to get an authoritative statement as to what would be regarded as an assembly here. Can one state now that any firm that is considering the question of assembly here will be quite justified in writing at once to the manufacturers stating that, provided a substantial assembly is done here, the Minister will be prepared to give a concession to the extent indicated? I know that one or two firms that I am acquainted with were waiting until they got a definition of what was to be an assembly, and then intended writing to the manufacturers to know if they could manage to send in the parts in the manner specified. I take it from the Minister's speech that it is the reverse procedure that will be correct: that the firms here should write to the manufacturers at the other side to ascertain what is the maximum amount of breakdown chassis and body that it is possible for them to export.

Mr. Lemass

The general principle will, of course, apply in all cases; that is, that a certain minimum assembly will be required both in respect of chassis and body. There is, however, the power to meet the difficulty of particular types of cars. What I suggest is that the parties interested should endeavour to get in touch with their principals and ascertain the manner in which parts of chassis and body can be exported so as to permit of the greatest amount of assembly here. Having got that information, they can then get in touch with my Department and find out if that particular kind of assembly is sufficient to qualify for the issue of a certificate under this section. I think that all possibility of loss arising through misunderstandings or doubts will be removed if that procedure was adopted.

Recommendation No. 1, by leave, withdrawn.

Recommendation No. 2 not moved.

Section 7 agreed to.

SECTION 8.

(2) Whenever any person so uses a mechanically-propelled vehicle that the excise duty chargeable thereon under the enactments mentioned in the foregoing sub-section of this section becomes chargeable under that sub-section on such vehicle at such higher rate as is mentioned in the said sub-section, such person shall, unless such duty has been paid at such higher rate before the commencement of such user, be guilty of an offence under this section and be liable on summary conviction thereof to an excise penalty of whichever of the following sums is the greater, that is to say, twenty pounds or three times the difference between the amount of the said duty paid on such vehicle on the taking out of the said licence therefor and the amount of the said duty at such higher rate.

Mr. Douglas

I move recommendations Nos. 3 and 4:—

Section 8, sub-section (2). After the word "person" in line 39 to insert the word "knowingly."

Section 8, sub-section (2). To delete the word "of" in line 47, where it first occurs, and to substitute therefor the words "not exceeding."

This deals with a totally different matter. I dealt with it briefly on the Second Reading of the Bill. My real objection is not to the general provision in the section. I agree that if a person deliberately tries to get away with a lower rate of tax than is proper that he ought to be made subject to a substantial fine, but what I do suggest is that "twenty pounds or three times the difference between the amount of the said duty" as a minimum fine is too high. In the case of deliberate fraud, I would be prepared to agree to a higher fine, but as regards many cases which I know can arise I think the penalty laid down is far too high. Because of the inclusion in the section of the words "excise penalty" I believe I am correct in stating that the District Justice has no option whatever but to enforce the payment of the actual fine provided. I do not know whether the Minister has ever had to fill in the forms for the road tax on his car. If so, I wonder did he ever trouble to get the two types of forms, the one dealing with private cars and the other with a car used for business purposes. If he got the two forms he would find that, in certain cases, it is extremely difficult to differentiate between them. The reason why I noticed this immediately I read the Bill was because I was summoned myself for having used a car at a lower rate of tax than was, in the opinion of the Guards, the correct rate of tax. Fortunately for me the District Justice held my view and did not take the view of the Guards, and I was not subject to any fine. Although the District Justice took that view, I confess now, having read the section more carefully, that I do not know if he was right in the view he took. I do not consider that the car I was then using, and the purpose for which I was then using it, was clearly defined under the section. It certainly was not clearly defined in the form. I think the reason why the Justice decided in my favour was because, while it was not by any means clear that my car, used as it was used, came within the definition of a private vehicle, it certainly was clear that it did not come within the definition of a commercial vehicle.

I also mentioned on the last day the case of the taxi-man. In the strict sense, if he took his family for a ride in the car then he would be using the car as a private vehicle and would become subject to the higher rate of duty. No man in his senses objects to a taxi-driver, occasionally, taking his family for a drive, and it certainly would be absurd if such a man was liable to prosecution and to incur a heavy penalty. But the law is certainly not clear in some cases as to what tax should be paid. There should be a limit; and a minimum penalty of £20 is certainly too high. I have put down two amendments on this question, and I should like that what I have said should be taken as applying to both. I shall be glad to hear what the Minister has to say about them. One recommendation is to insert the word "knowingly" and the other the words "not exceeding."

Mr. Brown

I should like to support either of the amendments, but especially the second as the word "knowingly" is a difficult word generally to interpret. It is not right, in my opinion, to have a minimum penalty of £20. I would prefer one that would give the court discretion as to the size of the penalty, having regard to all the circumstances of the case, and that would be best carried out by the second amendment.

Mr. Comyn

I am sorry to find myself in disagreement with Senator Brown in this matter. If the word "knowingly" is inserted it will be impossible to enforce the section, for every man will be entitled to say "Well, I did not know." It is like the dog having one bite. If you give a man one free offence I think it would be very hard, indeed, to enforce this section which is so necessary. In regard to the second matter, I am sure the Minister will inform us whether the excise penalty is a rigid one, that is, the sum of £20 or three times the difference. I was under the impression —of course the Minister knows for certain—that that is a penalty that might be mitigated.

Mr. Douglas

Not by the justice.

Mr. Comyn

That is the point. However, as Senator Brown thinks it is a penalty that could not be mitigated, I certainly would not undertake to differ from him, but my impression was that these excise penalties can be mitigated to one-fourth.

Mr. Douglas

Not by the justice.

Mr. Comyn

I may be wrong in this, but I was under the impression that this penalty could be mitigated to one-fourth, and still further mitigated by the Minister to any sum he thought proper. Moreover, I would say that in the case of excise penalties the Revenue Commissioners have power to compromise in a case, and that there is the same power here to compromise fines to any sums they consider proper. If the word "maximum" is here inserted, indicating that the justice can impose no greater penalty, but that he may impose any smaller penalty he might consider proper, it would be contrary to the whole spirit of the revenue code and would lead, I think, with all respect to judicial persons, to considerable abuse. The justices in former times, who were country gentlemen, never would impose excise penalties if they could possibly avoid it, so it was necessary in all these cases to have the penalty heavy because the revenue was concerned, and vast sums of money were concerned. It also had to be rigid in order to prevent the justices letting men off with a nominal fine. I do suggest to the House that in matters of these revenue penalties they ought to be very careful before making any alteration in the regulations as drafted. For all these reasons, I am sorry that I cannot agree with Senator Brown.

Mr. Douglas

If what Senator Comyn says is correct, that the justices could mitigate the fine to one-fourth, that would meet my whole case, and for that purpose, beyond question, I would prefer my second recommendation.

Mr. Lemass

In dealing with both these amendments in order, the first answer is that the word "knowingly" is regarded as objectionable in principle, and would not achieve the purpose the Senator has in mind, because a man must know how he is using a mechanically-propelled vehicle. The Senator is relying upon the second of his amendments. The position is that, in the absence of any provision to the contrary, the court has power to reduce the excise penalty to the extent of 25 per cent. of the amount fixed by statute, but not to a greater extent. Again, in the absence of provision to the contrary, the complete power of mitigation or remission rests with the Minister for Finance or the Revenue Commissioners. The Revenue Commissioners have, of course, no function in relation to penalties for breaches of the law relative to the Motor Vehicle Duties Act. The powers in these instances are transferred to the county councils, and the power of remission under Section 8 will rest with the county councils, and in neither case does the power rest with the Minister for Finance.

Cathaoirleach

Both recommendations, by leave, withdrawn.

Sections 8, 9, 10, 11, 12 and 13 agreed to.

Schedules and Title agreed to.

Report Stage ordered for Thursday, 14th December.

Seanad Éireann díospóireacht - Wednesday, 13 Dec 1933

Finance (Customs and Excise Duties) Bill, 1933 (Certified Money Bill)—Committee Stage.

Cathaoirleach

Seanad Éireann díospóireacht -
Wednesday, 13 Dec 1933