I move:—

Section 5, sub-section (5). To insert before the sub-section a new sub-section as follows:—

"(5). Every hearing by the Circuit Court of an appeal under Section 196 of the Income Tax Act, 1918, and every hearing by the High Court or the Supreme Court of a case stated under Section 149 of the said Act shall, if the person assessed or proposed to be assessed to tax so desires, be held in camera.”

This is a recommendation which I have tabled for the reasons that I stated yesterday. I do not intend to repeat what I said yesterday. The Minister was evidently personally favourable to the proposition which I put forward, and I think the only doubt he had was whether it might in any way interfere with the administration of justice, the proper reporting of legal decisions, or anything of that kind. I can assure the Minister that it would not. The official reporter will not be excluded if the case is heard in camera, and the reporter who reports every tax case will also have the privilege of being there. Any point of law would be reported, but reported in such a way that the identity of the persons whose interests were involved would not be disclosed. I quite agree that the Minister should have an opportunity of consulting those in authority who might take a view opposite to mine, although I am fairly confident that they will not. Therefore, I suggest that this should stand over until next week, and in the meantime the Minister could consult them. I myself will perhaps take the opportunity of having a word with the Attorney-General on it, and if there is any objection, of course I will not press the recommendation. But it is important. I understand that if it is to go into a Finance Bill it should go into this one. I understand that there are two or three cases pending in which this arises in rather an acute way.

I am glad that Senator Brown has consented to postpone this. I will have an opportunity before Wednesday of consulting the Department of Justice, the Attorney-General, and perhaps, if necessary, a Judge, with a view to seeing if there is any objection to the change which I do not see.

Recommendation postponed.

I move:—

Section 5, sub-section (5). To delete the sub-section.

I put down this recommendation in order to hear from the Minister the reasons for changing the practice of hearing appeals by two special Commissioners. It occurs to me that there will be a great likelihood, if you have appeals heard by one Commissioner, of a large number of appeals being taken to the Circuit Court which is not desirable. The taxpayer who might quite conceivably be satisfied with a decision given by two Commissioners might not be satisfied with a decision given by one, and in consequence might appeal.

It is not thought that it will have that effect at all. I stated the reasons for this change in the Dáil. We have so far had two Special Commissioners hearing appeals here because that was the law in England, but in England the decision of the Special Commissioners is final. Here there is an appeal from the Special Commissioners to the Circuit Judge, so that the reason for having two which exists in England does not exist here. Having two is a decided disadvantage with the whole country as one circuit, and in fact, the appeal circuit has to be begun too soon; it has to be begun before the inspectors of taxes have been able to carry on the correspondence with the taxpayers that might avoid the hearing of appeals altogether. Furthermore, it is not possible to finish the circuit in time, because at one circuit the cases are so many that the duplicates actually cannot be got out of the collectors in time. Then there is the other point, that if one of the Commissioners falls ill, at the present time we have simply to appoint a dummy in his place, a person with perhaps no experience, simply to go around with the other Commissioner and sit there but take no part in the proceedings. If we have power to have one Special Commissioner to hear appeals an illness would upset only part of the country, and perhaps for only a month or so, and even if there was a permanent illness the position would not be any worse than it is at the present time. This does not really prejudice the taxpayer, because there is the right of appeal. We have cases from which there is no appeal heard and decided by one Judge. I can see no objection to this at all, and I do not believe that the number of appeals to the Circuit Court will be increased.

I move:—

New Section. Before Section 10 to insert a new section as follows:

"10. Any person deriving profits from trade shall have the right to be assessed for the years 1930-31 and 1931-32 on the average profits of the previous three years if the profits of the preceding year would result in an assessment higher by more than twenty per cent. than that based on the profits of the average of the preceding three years."

After what transpired yesterday, when the Minister informed the House that the matter could be embodied in the Finance Bill of next year to cover the cases I have in mind I do not propose to move this recommendation.

I take it that the Minister intends to go into this matter and that he will consider the possibility of making an announcement in regard to his attitude towards it. Otherwise, if we wait until the Finance Bill is introduced next year the effect would be, in regard to a considerable number of accounts which are made up on 31st December that auditors would not know what the exact situation was in making their reports to shareholders. If the Minister could not see his way to make an announcement as to what are the intentions of the Government in the matter now, I would urge him to consider it between this and next week.

I will consider whether, during the course of the year—because the matter will not arise until near the time when the next Finance Bill is introduced—I will be able to make an announcement. A question could be asked and the whole matter could be dealt with—both the point that was raised by Senator Douglas yesterday in regard to the carrying-over of losses which occurred in a year other than the year immediately preceding the change, and also the question of increase in assessments beyond what would take place if the three years' average prevailed. I will look into both of these points.

I would point out to the Minister the difficulty that will arise owing to the non-liquidity of a business. A business might show quite a large profit in the preceding year, but that might not be realised. It would have to find a large amount of liquid cash and it might experience great difficulty in doing so, whereas, if it had time to prepare and to make provision gradually, it would be able to do so. That is a matter I would ask the Minister to consider.

Arising out of Section 21, I have been informed that motor car parts which were purchased under a replacement guarantee are charged import duty. I maintain that the owner should not be called to pay import duty on parts replaced owing to defects. To do so seems to me to be charging double duty.

The real position there is that the Revenue Commissioners have to be satisfied that there was a defect really at the time of importation. It is not a case of wear and tear but where something became defective, say, through the fault of the driver of the car or something like that.

I do not think wear and tear is covered at all in a replacement guarantee.

No.

I mean parts that were defective when they came in and that are replaced.

I think if the Senator would see me about it it would be better. It is not a matter that I heard any complaints about and I am not familiar with it. I do not know what difficulties have arisen.

Perhaps the Senator will see the Minister about it.

I have a recommendation on the Order Paper:—

Section 23, sub-section (1). To delete in line 16 the word "five" and to substitute therefor the word "one."

I understand the Minister is willing to meet me in the matter and to reduce the period during which the revised exemption runs from five years to two years. If that is so, I will not move the recommendation.

The only way the matter can arise is by a recommendation being made in this House. If the Senator would alter his proposed recommendation from one year to two years I would guarantee to do my best to induce the Dáil to accept that recommendation.

Very well, I will propose that, with the leave of the House.

Leave given.

I would like some explanation as to the necessity for the change that is made in this section.

The necessity is simply this: that up to some time last autumn it was thought that solicitors who were on the register before the change of Government were, as a result of the provisions in the Government of Ireland Act, 1920, entitled to practise in Northern Ireland and in the Free State. It was thought until last autumn that the one stamping of the certificate sufficed, but as a result of a query which was raised a question was submitted to the Attorney-General, and it was found that it was necessary when a solicitor had his certificate stamped in Northern Ireland that he should have it stamped also here, and conversely, that a solicitor who had his certificate stamped here should have it restamped if he proposed to practise in Northern Ireland. What is intended in the Bill is really to restore the position to what it was thought to be before this legal opinion was obtained last autumn. The matter is not of any consequence to the Exchequer. There are only £300 or £400 involved, and we do not think it is desirable, by means of a legal opinion, as it were, to impose what is in fact a new tax. The arrangement, of course, will be reciprocal.

Is there an arrangement about reciprocity?

Certainly. It does not operate unless it is reciprocal.

The meaning of the words "present or future" taxation do not seem clear to me in this section. The section says:—

(1) Debentures, debenture stock and certificates of charge issued by The Agricultural Credit Corporation, Limited, shall not be liable to any taxation present or future so long as it is shown in manner to be prescribed by the Minister for Finance that they are in the beneficial ownership of persons who are neither domiciled nor ordinarily resident in Saorstát Eireann.

I do not know whether it is usual, or a precedent, to put in words like that which have the appearance of trying to bind the legislature. After all, the section would not be weakened if "present or future" were deleted. I do not understand the meaning of the words, but perhaps the Minister would explain.

It is simply a statutory promise. There is no doubt that a future Parliament could impose taxation. It is quite a common thing. For instance, in connection with the two issues of National Loan, we promised that they would not be subject to present or future taxation. If we imposed taxation it would be a breach of faith with the people who took up National Loan. This is a proposal to place people who took up this stock in the same position as those who took up National Loan. The promises I made in the prospectus of the National Loan were afterwards ratified by a section of the Finance Bill, and this is really putting this stock in the same position. It means that they get a statutory promise.