Special Committee Value-added Tax Bill, 1971 díospóireacht -
Wednesday, 28 Jun 1972

SECTION 22.

Dr. FitzGerald

I move amendment No. 21 :

In page 26, subsection (2), line 10, after "person" to insert "or that the amount of tax assessed is excessive".

This is to broaden the scope of the appeal because the appeal here relates only to the issue of whether a person is an accountable person or not. This is a case where somebody fails to make a return in the prescribed period and the Revenue Commissioners raise an assessment against him. There is more at stake than the question of whether the person is an accountable person or not. He may have failed to make a return in time because of difficulties he faced, or his accountant might have been on holidays. He should not, because of that, be put into the position that, no matter what amount the Revenue Commissioners levy against him arbitrarily and without any knowledge on their part as to what amount is properly due, he has no appeal against that. Perhaps I am misinterpreting that or misunderstanding it, but it seems to me that there is not any appeal against the amount in question but only on the point of whether he is an accountable person or not. In case I am wrong, I do not want to waste time in developing that point. Perhaps the Minister could clear my mind on that.

Mr. Colley

I am trying to locate an amendment of mine which I think covers the point the Deputy has in mind.

Dr. FitzGerald

Would it be amendment No. 24a?

Mr. Colley

It deals with refunds only. It is No. 24a. In so far as the amount of tax is concerned the basic purpose of the section is to determine whether a person is an accountable person. If he is not, the tax in the estimate would be wiped out in full but if he is an accountable person he can displace the estimate by putting in his return and paying the tax in accordance with it. It does not seem necessary, therefore, to make the amount of the tax assessed a ground for appeal until the basic question of accountability is settled. An estimate of the tax may be made under section 23 and any estimate of this kind can be appealed under section 23 (2) (a) on the grounds that the amount is excessive.

Dr. O’Donovan

The sidenote states "Estimation of tax due for a taxable period". Of course that has no legal significance.

Dr. FitzGerald

I had difficulty in understanding the reason for having both a section 22 and 23 because, going by the sidenote, it seemed to me section 22 dealt with the entire amount of the tax and it did not occur to me in the light of the sidenote whether the point arose as to whether a person was accountable or not. This section deals with the determining of the amount of the tax and it does not deal with whether the person is an accountable person. There is an estimated amount of tax, the person appeals against what the Revenue Commissioners have done, and there is nothing here to indicate that, if he cannot or does not appeal on the grounds of not being an accountable person, he can eliminate or set aside the estimated amount. Of course, under another section, there is the point about a false return.

Mr. Tully

Section 22 has a cross reference to the terms of section 23. If the person fails completely to make a return, then it is dealt with, but how would that cover somebody who has been charged more or who claims to have been charged more than he should have to pay?

Dr. FitzGerald

First, a man does not make a return, or a man makes a false return and the Revenue Commissioners can proceed against him. Section 22 deals with the former and section 23 with the other. If it is established that he is not an accountable person then the question of how much tax should be charged will fall to be dealt with under section 23. If section 22 (1) does not deal explicitly with whether a person is an accountable person but gives the Revenue Commissioners power to access it must be reversible by some legal mechanism. I question whether the Minister is right in this respect.

Mr. Colley

Is it not the position that section 22 envisages a person not making a return and the Revenue Commissioners estimate an assessment and he appeals under the section to establish that he is not an accountable person? If he establishes that, it is the end of it. On the other hand, if he fails to establish it, then he is an accountable person in respect of whom the Commissioners have reason to believe the total amount on the tax payable—no, I am sorry. We have been talking about two situations where there are really three. First of all, he does not make a return and there is an estimated assessment and he appeals on the ground that he is not an accountable person. If he succeeds, that is the end of it, if he fails, there can be two further situations. Secondly, having failed in that, he then makes a return and, thirdly, he makes a return but, in the view of the Revenue Commissioners, it is not a sufficient return. In the first of these two, having lost his appeal he is deemed to be an accountable person and he then makes his return and that is dealt with in Section 22 (c). If he comes into the third category he can be dealt with under section 23.

Dr. FitzGerald

If section 22 (c) operates and he makes a return thereby discharging the estimate, that stands unless the Revenue Commissioners proceed under section 23 on the ground that the return is inadequate.

Mr. T. J. Fitzpatrick (Dublin Central)

Would it not be unusual for the Commissioners to estimate without an investigation? There could be a situation where, for instance, business dropped by as much as 50 per cent. There would in that case be a suspicion in the minds of the Commissioners and an investigation would be carried out.

Mr. Colley

The assessment under section 23 could be made after such an investigation. I am not saying it would always be so. We must remember, of course, that if the taxpayer felt he was being over-assessed he could appeal against it.

Amendment, by leave, withdrawn.

Chairman

Amendments Nos. 22 and 24 seem to be cognate and may be discussed together.

Dr. FitzGerald

I move amendment No. 22 :

In page 26, subsection (2), line 11, to delete "fourteen" and substitute "twenty-one".

I have never myself felt that the 21-day period is adequate because if someone is on holidays or away for some reason he could miss out on it and I do not think it is always easy, if one misses the 21-day period, to get equitable treatment from the Revenue Commissioners.

Mr. Colley

I think they are reasonable.

Dr. FitzGerald

A variation in the period could put them into the position of estimating tax and requiring one to agree at that stage to pay tax in certain instalments.

Mr. Tully

They ask for a particular time to wipe their eye.

Dr. FitzGerald

Anyway, I think it is a bit objectionable, but I see no reason for cutting the period from 21 days to 14 days and I think the Minister should consider making it at least the standard 21 days. I shall refrain from trying to make it longer.

Mr. Colley

Originally 14 days was provided on the basis of a taxable period of one month but, since we have extended this to two months, I would certainly be prepared to accept this amendment.

Amendment agreed to.

Section 22, as amended, put and agreed to.