Amendments Nos. 147 and 148 are related and will be discussed together.
SECTION 81.
I move amendment No. 147:
In page 107, between lines 2 and 3, to insert the following subsection:
"(2) Section 123 of the Act of 1992 is hereby further amended by the insertion of the following subsection:
‘(2) Notwithstanding the provisions of subsection (1), a person shall be entitled to pay £100 in respect of a licence for every machine in his possession or £500 in respect of a site where such machines are situated, whichever is the lesser.'.".
I would appreciate the Minister's guidance on this matter. This amendment concerns amusement machines which are video machines, not gaming machines. The Minister might be familiar with the phenomenon whereby a reply by a public representative to a letter from a constituent seems to spawn about ten more letters from the constituent. I have been caught in a web of correspondence about amusement machine licence duty in Chapter 3 of the Finance Act.
This concerns an operator in County Offaly who told me that two years ago the Government put an annual tax of £100 per machine on video game cabinets in a public place. The period covered by the tax runs from 30 June in one year to the same date in the following year. However, if one is unlucky enough to obtain a site prior to 30 June of that year the tax becomes £200, presumably to cover the two years. They must be relicensed before and after 30 June. The value of these second-hand cabinets is only £250. The operator enclosed advertisements from the local newspapers showing the price of the machines. They include Goliath cabinets for £95, Starline cabinets for £95, assorted mini cabinets, including boards, £50 and so on. The value of these machines is less than the machine duty.
The purpose of my amendment is to impose a site charge of £500 where there is a group of these machines or charge a duty of £50 where the machine is worth less than £400. That would achieve a pro rata value between the value of the machine and the annual duty. The £500 per site charge would result in a gain for the Minister because it would be an incentive for people to instal more machines on a site and thus generate more excise duty on the equipment.
Apparently our new coins also cause expense because the operators must adapt the machines for the use of new coins. The operator who wrote to me maintains that he is going broke. He is seeking a break from the Minister.
That provision was amended in 1993 to cater for changes sought by representatives of holiday and weekend resort operators. There are three types of amusement machine licence. The first is a £100 full annual licence which is valid for the full year from 30 June. Those licences are, presumably, purchased by people in urban areas. The second is a £30 three months peak licence which is valid until 15 September each year and this would probably apply to seaside resorts. The third one is a £60 limited annual licence which is valid until the last day of February each year. The licences were designed in consultation with representatives of amusement operators, a group which is strong in Deputy Yates's constituency.
According to trade publications the value of the new machines can range from £400 to £2,000. The cheap machines have become unpopular and are no longer in demand. It is almost impossible to impose a licence based on the value of the machine.
The effect of the first amendment would be to impose a set charge per site, regardless of the number of machines in play. This would provide, for example, that a person with 100 machines who opted for the £500 rate would pay the same rate as somebody with six machines in a small location. This would result in a serious loss of revenue to the Exchequer in the case of the larger operators. Furthermore, the permits are granted to operators who may not in fact be owners of premises, for example, franchise holders who rent out machines to a number of different locations. The proposed amendment would necessitate overhauling the structure of the duty provided for in the 1992 Finance Act and the amendment to provide for the limited annual licences in the 1993 Act.
The second amendment would affect Exchequer receipts from amusement machine licence duty and would cause unwarranted administrative problems to the trade, as well as serious control problems for the Revenue authorities with regard to, for example, valuation and depreciation of amusement machines. As with the first amendment, such a radical departure from the existing structure which we designed to assist the industry is entirely unjustified.
It might be helpful if we looked at the case cited by Deputy Yates.
It is reference number 931135-MF on correspondence from the Minister's office on 24 January. The Minister wrote to this gentleman saying that the points he raised in his correspondence had been noted and would be borne in mind as appropriate in reviewing the gaming amusement machine excise duty regime.
Perhaps the Minister could give me a reply because the operator made a number of points? He said that IATA is more interested in big operators and that the small operators are going broke. He said that like any normal person he likes to be able to pay his bills but he cannot do so because of the Minister's impositions. Even without the licence the business operates on a hand to mouth basis for the reasons quoted in his correspondence regarding the video game licence.
We will look at that case.
I can forward all the correspondence to the Minister.
The changes introduced last year were designed for small operators such as that correspondent. He could pay the £30 for a short period instead of paying the £100 licence.
Amendment, by leave, withdrawn.
Amendment No. 148 not moved.
Section 81 agreed to.