I presume the House has already studied in detail the financial statement which was presented to the Dáil and the explanatory table which has been circulated. I do not suppose it is necessary for me to go into very great detail as to the Budgetary position, but there are one or two important facts to which I ought to draw the particular attention of the Seanad. The net expenditure on Supply and Central Fund Services, after making allowances for reductions consequent upon savings in the Estimates, and borrowing for capital purposes, is £30,326,000 for the current financial year, as compared with £29,419,250 for the last financial year. Reference to the explanatory tables will show that, whereas for the financial year 1934-5, we deducted for over-estimation the sum of £1,190,000, for the current year we are making allowance under the same head of only £950,000. That is to say, last year we felt justified in allowing approximately 4 per cent. for overestimation, while this year we feel that that allowance might be fittingly reduced to a trifle over 3 per cent., fixing the sum at £950,000. After making this allowance, we find that the net expenditure to be defrayed out of revenue for the current year is £29,376,000 as compared with £28,229,250 for last year, an increase in the estimated net expenditure for 1935 over that of 1934 of £1,146,750. The House will be interested to know how this increase arises. It is accounted for, in the first place, by the more conservative basis which we have taken for overestimation. The reduced allowance which we have made under that head alone accounts for £240,000. The balance is accounted for almost exactly by the increased provision which we are making out of revenue for, in the first place, export bounties and subsidies, which a glance at the two Budget tables — the table for 1934 and the table for 1935 — will show is £600,000. I should like to make this quite clear—that this year, out of revenue, we are providing for export bounties and subsidies £600,000 more than we proposed to provide last year. Last year, as the House will remember, the provision made out of revenue for this service was £750,000. This year it is £1,350,000. The second large item is the increased provision which is being made for the Department of Local Government and Public Health. That amounts to £253,000, and virtually all of that — £236,000 — is accounted for by the increased provision we are making for housing grants and subsidies. The third big item is the increased provision which is being made for the work of the Land Commission. That amounts to £132,000, of which, approximately, £88,000 will be expended in the improvement of estates. About £17,000 is due to the increased staff which has been found necessary in the Land Commission to carry through the accelerated programme of land division which the Government has undertaken. These three services account in the gross for about £985,000, and if we deduct from that about £32,000, which is proportional to the general overriding allowance I have made for overestimation in the Budget, we find that the net increased provision for these services in the current year over that of last year is £953,000. When we add that to the decrease — £240,000 — in the allowance we have made for over-estimation, we get a total sum of £1,193,000, which represents a slight increase in the estimated net expenditure for 1935 as compared with that for 1934. The difference of £53,000 is made up by corresponding reductions on some of the other Estimates. There are counterbalancing increases in other Estimates as well. The four figures which I have given represent the basis of the present year's Budget. It will be seen, therefore, that the increased provision which is called for this year is due, in the first place, to the more conservative attitude we have taken up with regard to over-estimation; secondly, to the fact that we are making a much greater provision out of revenue this year, as compared with last year, for export bounties and subsidies; thirdly, to the considerable increase in the Vote for the Department of Local Government and Public Health, due mainly to the increased provision we are making for the Government's housing programme, and, fourthly, to the considerably increased provision made for the work of the Land Commission in order to carry out the Government's policy of accelerated land division.
On the revenue side, the actual revenue for 1934-5 was £28,770,000. The revenue estimated for the current year, on the basis of the existing taxes at 31st March last, was £28,441,000. That was the estimate formed by the Revenue Commissioners. This figure has, however, to be reduced by £240,000, due to my undertaking to forego this year about that amount of revenue from the bacon excise duty. That leaves us with a net figure for this year's estimate of revenue of £28,201,000, representing a decrease, as compared with the actual revenue of last year, of about £569,000. As in the case of the expenditure side of the account, the steps which we are taking to make good this decrease in revenue are quite apparent. As I have already explained to the Dáil, we propose to make good our loss in respect of the bacon excise duty by the imposition of a customs duty of 6d. per cwt. on wheat, which will amount to £190,000. By a further extension of the duty on mineral hydro-carbon light oils to all other classes of mineral hydro-carbon light oils used in the propulsion of motor vehicles, we hope to secure £60,000. The total sum which we hope to secure from these two taxes is, therefore, £250,000, as compared with the £240,000 which we shall lose in respect of the bacon excise duty. There still remains, approximately, £320,000 of revenue to be made up in order to put us in the same position, from a revenue point of view, as we were in last year. The declining yield of certain duties is not a new or novel factor in our financial history. Since 1923, the yield of two important duties — the beer duty and the spirit duty — has declined year after year in rather startling fashion. In addition to the difficulties which would arise in that connection, we are faced this year with the fact that the Government policy of high protection is beginning to bear fruit. Various import duties which formerly were a considerable source of revenue to the Exchequer have begun to be much less effective from a revenue point of view owing to the replacement of the articles which were formerly imported by home manufacturers. I might instance the duty on boots and shoes, the duty on furniture, the duty on wearing apparel, the duty on glass bottles and, more important still, the customs duty on sugar. In order to put ourselves in the same position as last year, while making additional provision for certain of the services to which I have already referred, it was necessary to increase by 4d. per lb. the tea duty, so as to bring us in approximately £320,000. That still leaves a balance of approximately £624,000 to be provided. That has been provided by the duties of which you are already aware—an increase of ¼d. per lb. in the duty on sugar: an increase of 8d. per lb. in the duty on tobacco, an increase in entertainments duty on cinema seats, a series of miscellaneous customs duties and various changes in the law in regard to the annual tax revenue derived from house property. From the figures I have given, it is quite clear that, if it had not been for the increased provision which we are making this year out of revenue for export bounties and subsidies, the increased provision for the Government's housing programme and the Government's programme for the accelerated division of land, and the more conservative allowance which we felt bound to make this year in respect of overestimation, even with the provision for widows' and orphans' pensions, we should be able to get through this year without imposing any very heavy additional burdens on the people. However, as I say, we feel that so long as these export bounties and subsidies continue, the more necessary it is for us to meet a large part of them out of revenue. Accordingly, that provision has been made, and we feel that these facts are justification for the Finance Bill which is now before the Seanad.
With regard to the Bill itself, in view of the fact that the individual clauses of the Bill will be explained in detail during the course of later stages, it is scarcely necessary to refer to them at this stage except in a general way. Part I of the Bill consists of nine sections, relating mainly to income tax. Clause I is the usual clause specifying the rate of income tax and surtax for the year ending 5th April, 1936, and makes provision for the continuance in operation of the various enactments relating to this form of taxation. Clause 2 refers to the tax, under Schedule A, on houses in the first year of occupation, and is designed to bring such houses under assessment. Clause 3 relates to the increase in certain valuations for purposes of Schedule A — a clause about which there has been a great deal of discussion in the Dáil. Briefly, its purpose is that, as, in general, the valuation of most house property in the Saorstát does not represent by any means the real income which is derived from the ownership of such property, we propose, in order to enable a more equitable assessment of the tax to be made and in order to do justice to the general body of the taxpayers, to increase the valuation, for income tax assessment purposes, by 25 per cent. Sub-section (7) of Section 3 is a safeguard to the taxpayer which enables the Revenue Commissioners to ante-date, for the purpose of Schedule A, a reduction in the poor law valuation, where they are satisfied that such a reduction would give a more accurate measure of the real annual values, for a year prior to that in which the reduced valuation came into operation. For instance, if, following the enactment of this Bill, a taxpayer is not satisfied with his assessment and goes to the Commissioner of Valuation and asks him to revalue the building, and if it is found that the new valuation would give a more accurate measure of the income which would be derived from the building than the old valuation plus 25 per cent., then the Revenue Commissioners can ante-date the valuation for the purpose of making the assessment.
Clause 4 provides that income, derived from the operation of sand, gravel, or clay quarries or pits, will be liable to income tax in the same manner as income from other types of quarries is at present liable; for example, stone and slate quarries. Clause 5 arises from the passage of the Irish Nationality and Citizenship Act, and the Aliens Act. It, in fact, makes no material change in the law and is merely designed to bring the phraseology of this Bill into line with existing legislation. Clause 6 provides for a better assessment of builders' profits. Briefly, the position there is to ensure that, in the case of a speculative builder, the capitalised value of the ground rents which he derives from the development of building land will be taken into consideration in assessing his income for the purposes of tax. Clause 7 is designed to bring Section 7 of the Finance Act of 1932, which provided for relief in the matter of income tax in certain circumstances where money was invested in Saorstát companies, into conformity with the principles embodied in the Control of Manufactures Act. Clause 8, like Clause 5, arises from the passage of the Irish Nationality and Citizenship Act and the Aliens Act. Again, it makes practically no change in the existing law in that regard. Clause 9 provides that certain of the Revenue Commissioners' officers may grant the usual statutory allowances, deductions and reliefs in computing income tax liability. The necessity arises from a deficiency in the existing legislation which does not allow officers to grant reliefs after assessments have been made by the Commissioners, even though it is clear that a taxpayer would be entitled, in equity, to such relief.
Part II of the Bill consists of 20 sections dealing with Customs and Excise duties. Clauses 10 and 11 provide for the imposition of the duties set out in the First and Second Schedules of the Bill. Clauses 12 and 13 refer to the alteration of the duties on sugar and articles made from or containing sugar. Clauses 14 and 15 provide for revised rates of duty on fruit; and the next seven sections — Nos. 16, 17, 18, 19, 20, 21 and 22 — refer to the revised rates of duties on cutlery, clocks, tea, wheat, tobacco, hydro-carbon oils, and boots and shoes. Clause 23 deals with the exemption from duty of wireless telegraphy apparatus for the blind. Following certain representations, which were made by a philanthropic society, that wireless sets for the blind should be free of Customs duty, and clause 23 was designed to-provide that such exemptions could be granted subject to certain conditions which the Commissioners may impose. Clause 24 provides for the increase of the entertainments duty in respect of cinematographic exhibitions. Clause 25 provides for an amendment of the exemption from entertainments duties. It provides for an alteration in the conditions under which relief, which was granted under Section 19 of the Finance Act in the case of greyhound racing tracks, may be granted as it was found that certain tracks that came within the scope of the Bill had incurred considerable expenditure. Due rather to the manner in which the section was drafted, they were, I think, rather inequitably, excluded from the exemption which was granted to other tracks. With regard to Clauses 26 and 27: Clause 26 refers to the termination of certain duties of Customs, most of which have been replaced by other duties; and Clause 27 provides for the amendment of certain other Finance Acts mainly relating to Customs duties, and both clauses are consequent upon the general changes in the Customs law which it is proposed to make. Clause 28 gives a statutory authority for the present practice of charging duty on the value of alterations or repairs on the reimportation of dutiable articles sent abroad in order to undergo such operations. Clause 29 increases the general penalty for a false declaration in relation to Excise duty. It is designed to bring the law in regard to the Excise duty into line with the law which has been in force since 1915 in relation to Customs duty.
Part III of the Bill relates to death duties, and Clause 30 provides for the assessment of personal representatives of persons liable to death duty. Clause 31 will give the Revenue Commissioners power to make estimated assessments of death duties in cases where the persons liable to deliver an account of property for the purpose of the assessment of duty fail to do so. I may say that a similar power already exists in the case of income tax and that, as ample opportunities of appeal are provided for by the Clause, the taxpayer will be fully safeguarded against any injustice that may arise in the making of an assessment. Clause 32 relates to the assessment of death duty in the case of certain property previously subject to an annuity or other periodical payment; and Clause 33 is designed to stop a serious leakage in the death duty revenue which arises from the fact that people have a habit of placing money in joint names, payable to one of them on the death of the other. This clause provides that where this is done — that is to say, where money is placed on deposit in joint names and one of the parties dies — the banker may not transfer the deposit to the survivor or survivors until he is furnished with a certificate from the Revenue Commissioners that there is no outstanding claim on the deposit. Section 34 of the Bill, which consists of one clause, relates entirely to Corporation Profits Tax, and it provides for the continuance for a further period of three years of the temporary exemption hitherto granted to certain public utility concerns as, for instance, railways, building societies and the Agricultural Credit Corporation. I may say that not all public utility companies are entitled to this exemption.
In Part V of the Bill a number of miscellaneous and general provisions are contained. Section 35 extends the definition in Section 42 of the Finance Act of 1920, so that members of Saorstát Stock Exchanges carrying on business as dealers will be able to avail of the flat rate of transfer fee applicable to the stocks held by them in the ordinary course of business.
Section 36 raises from £3 to £4 the exemption limit in respect of stamp duty on wages receipts. Section 37 extends to import licences the provisions of Section 10 of the Finance Act of 1901, as amended. This section provides, among other things, that where Customs or Excise duties are imposed on any commodity and if a contract had been entered into involving the supply or use of that commodity, the contractor is entitled to recover in addition to the duty the amount of the contract or licence fee involved.
The two remaining sections, 38 and 39, are the usual ones relating to the care and management of the duties, the Short Title, etc.