I move amendment No. 14:

In page 58, subsection (2), line 24, to delete " carrying " and to substitute " carries ".

This is an amendment similar to amendment No. 12.

Deputy O'Malley, having anticipated this section, let me assure him that the activity he has in mind would enjoy relief as long as the engineering services were done for works which themselves would ultimately be executed outside the State. Subsection (1) so provides. It corresponds to section 34 of the Finance Act, 1968.

The advertising of magazines would not be tax free?

If goods are manufactured. The magazines are printed.

The magazines are printed here for export and make profits.

Yes.

Would the income from the advertising part of the magazine not be tax free?

Subsection (2) of section 54 states:

. . . in a case in which books or greeting cards are printed within the State otherwise than by their publisher and they or some of them are exported by their publisher (not being a case to which the previso to subsection (1) applies), the books or greeting cards, as the case may be, shall be regarded, for the purposes of subsection (1), as having been manufactured within the State by their publisher.

But that does not answer the specific question. Those profits arise out of manufacturing processes.

Yes, I know it is manufacturing but I gather that these magazines would not make profits if it were not for advertising.

Is it the question of space in a magazine that the Deputy has in mind?

Yes.

I would want notice of that question. I shall communicate with the Deputy later. It does not mean that it is an activity arising out of manufacturing processes as such but I would certainly want to examine it.

Would work carried out on behalf of foreigners establishing plants in the State be eligible for relief of tax?

No, but in the case of work done here for a firm who is establishing a plant elsewhere, the answer is yes.

The firm establishing a plant would be paying foreign currency for the work?

They might.

It would be a damn fool who would pay in foreign currency. It would be much better to pay in devalued pounds.

Sterling is still foreign currency.

Yes, but they would convert it before they would pay.

Nevertheless the earning of foreign revenue is an export exercise.

I am not saying that the Deputy's criticism is wrong but we could do this and then have to extend it so that construction work done for the firm in Ireland would enjoy export sales relief. The consequences of that to the Revenue would be very serious.

It might not be serious for the taxpayer.

It would be very serious for the Revenue and, consequently, for the Irish taxpayer. There are complaints and rightly so, about the rates of income tax we have but the rates would be lower if income tax was charged on export sales. We have to carry that burden for the benefit of having manufacturing industry.

The section refers to chemical, civil, electrical or mechanical engineering works executed outside the State. Is there another provision for architectural works?

The phrase " design and planning services " is regarded as extending to architects.

They are included.

What does the phrase " outside the State " mean? What about, say, nautical engineering work carried out in respect of the gas and possible oil finds?

Such works would be within our jurisdiction and not works outside the State because such finds are regarded as being within the State. If, however, the finds were in the North Sea, our jurisdiction would not extend to that area.

It is unsatisfactory that the definition in subsection (1) is regarded by the Revenue Commissioners as including architectural services. I do not say that it is undesirable or unsatisfactory that architectural services should be included but what I do say is that if they are included—and I am happy to hear that they are—the section should say so. A section that on the face of it deals only with chemical, civil, electrical or mechanical engineering works does not appear to deal with architectural works. It seems to me that if the Revenue Commissioners regard this as including architecture they are rather arbitrary in relation to matters such as this.

Would the Minister consider an amendment on Report Stage for the purpose of clarifying this situation?

Of course I would, but like many a clarification clause it could generate more difficulty. If we specify architectural and engineering services then the question would arise whether some other services are excluded because they are not mentioned at all.

If you use the words " including architectural services " you would not be doing any harm to the general ambit of words you referred to.

The question would arise then as to quantity surveying. Would quantity surveying not be entitled to relief because it is not mentioned? Quantity surveying is part and parcel of the design and planning services. You get into great difficulty the more you try to be specific. There is the danger that by being specific you presume that others are excluded.

Nowadays in many instances contractors are from outside the country. An architect would merely take charge of it and give a figure or a percentage for all fees—engineering, architecture and so on. He just puts on a 10 or 15 per cent. He collects and then pays the others.

Perhaps the use of the term " structural works " would include all those involved.

The meaning given to " engineering services " is design and planning services. It seems to me that it would be much better to leave it in that generous way than to try to put it beyond doubt, doubt which does not exist in the minds of the Revenue Commissioners. We know what has been happening to the whole professional world with the exception of the law, perhaps. There is greater fragmentation and isolation of individual activities and even as you try today to put in as many specific professions as we now know, within a matter of years there might be some new consultative profession or some specialisation which we would not have in the section. Then, we would have to amend the law.

But if architects are included in this by the good grace of the Revenue Commissioners rather than by the legislation of Oireachtas Éireann, are quantity surveyors included also?

The legislators have provided that anything in the nature of design and planning services will qualify.

It reads:

. . . means design and planning services for the work on the rendering of which is carried out in the State in connection with chemical, civil, electrical or mechanical engineering works executed outside the State.

The bulk of the type of foreign designing of building which we might do here is probably covered by those four items. I had in mind something that is not chemical, civil, electrical or mechanical engineering. For example, the building of a housing scheme might conceivably be called civil engineering but I do not think it is.

Or the type of large office building that Irish concerns are involved in letting on the Continent.

To get away from the detail of this for a moment, I want to make the broader principle arising out of this. I am happy to hear that architects and quantity surveyors are given this relief. It is only right that they should be so treated. It would be quite arbitrary if only engineers and such qualified for the relief but what worries me, and I say this as a legislator, is that architects and civil engineers are given this exemption by ex gratia the Revenue Commissioners and not because Oireachtas Éireann says so.

With respect, the Legislature has said so specifically in the 1968 Act.

Why does it not say so in this one?

Because we are using similar language. The reference is to design and planning services.

Yes, in connection with chemical, civil or——

Architecture includes design and planning services.

It cuts down the definition that might otherwise be conveyed by the words " design and planning services ". It is not every design and planning service. It is only design and planning services in connection with chemical, civil, electrical or mechanical engineering work.

That is the serious part of it. That delimits what goes before. I see Deputy O'Malley's point now and I think this should be attended to. The Minister's first answer on this does not comply with the rest of the wording in the section. It might be the intent but it is not in accordance with the legal wording there. I would hate to go into a court on that wording and Deputy O'Malley would agree with me on that.

If, for example, the Revenue Commissioners decided for some reason—I know in practice it would not happen—that they wanted to be vindictive in relation to a particular architectural firm they could refuse them export tax relief although they were giving it to all other firms involved in export trading of this kind. The architectural firm which was refused the export tax relief by the Revenue Commissioners would naturally be aggrieved because they would see all their competitors or fellow practitioners getting relief. They would immediately run to the High Court and say " They are all getting this relief, my lord, why can we not get it?" They would base their claim on subsection (1) of section 6 of this Bill. The judge reads it and he says—he would have to say on the basis of this subsection—"the others may be getting it but they are not getting it because of law that was made by Oireachtas Éireann but because the Revenue Commissioners decided to give it to them. Even though I think it is unfair, I cannot give you that relief because the law does not say that you are entitled to it". That is a serious situation because it allows for the possibility of individualised treatment, whether good or bad. I agree, as a general principle, that the Revenue Commissioners have to be given certain discretion in certain instances, but they should not be given a discretion as to which type of employment shall be tax free and which shall not. Within an individual firm's accounts there may be matters of extreme complexity and difficulty in respect of which the Revenue Commissioners, of necessity, would have to be given discretion but they should not be given discretion to add in a category of people who are not placed there by legislation.

The vital words in this section appear to me to be " in connection with ", I notice also that in section 34 of the Finance Act, 1968, the same words appear. If this relief has been given it has been an extra-statutory concession. That is the way it is written.

I find some difficulty in accepting the argument that the Revenue Commissioners have gone outside the Statute. The two professions that were mentioned here are architecture and quantity surveying. These activities fall within the description here and the Revenue Commissioners have no discretion to go outside that. In the case that Deputy O'Malley mentioned, of course, if the Inspector of Taxes were to act unreasonably his decision would be appealed against and the established practice would be part and parcel of the evidence of the interpretation.

I suggest that we might adjourn now as we have had a very heavy session.

We have agreed to sit until 6.30 p.m.

At the time that agreement was made Deputies Colley, Haughey and de Valera believed that they could be here. The Minister will appreciate the present situation.

I must confess to a slight oversight on my part in reading subsection (1) of section 60. There is a comma after the word " civil ".

Why do you say that?

It is in a special category—planning services in connection with civil work. I thought it referred only to chemical, electrical or mechanical works. I missed the word " civil ". I am inclined to go along with the Minister's interpretation and to leave it wider, because there are quantity surveyors, consultant engineers and architects. I think there are certain special offices in the city where they just do the drawing. They might not have an architect in them at all. I take it a company engaging in this type of business would be included in this subsection. They would be all part and parcel of the same type of work. They do maps for accident cases and so forth.

We were all aware that the word " civil " was there. I read out the list four or five times. Civil engineering and architecture are two different matters.

" Design and planning services " covers——

" Design and planning services, the work on the rendering of which is carried out in connection with." The words " in connection with " cover design and planning services.

Design and planning services in connection with chemical works, civil works, electrical works or mechanical engineering works which are executed outside the State. There are four categories in the 1968 Act and we have simply brought them into this.

It would cover office block development——

Yes.

The point I am making is that clearly on the law as stated in this section architectural and quantity surveying works are not included. They are in practice included because the Revenue Commissioners decide themselves they will allow. But if the Revenue Commissioners were to withdraw that concession from an individual firm, and that firm were to go to the High Court, the High Court would blow that firm out.

No.

I would not think that for a moment. The term " architectural " is clearly planning and design.

There are innumerable words in the tax code which require to be interpreted. The practice of interpretation gets well established over the years and it is looked to by the courts when a dispute arises. It would not be " on " for a particular firm to be discriminated against and for the courts to say it would be appropriate to discriminate or not to apply what was the accepted interpretation to a particular firm while others continued to enjoy it. That does not happen.

The courts are there to interpret the law in the last resort, not the Revenue Commissioners. If the courts decide that the Revenue Commissioners' interpretation of the law is wrong the courts must uphold their own interpretation of the law.

That is not in dispute.

The Chairman agreed with me before, but he does not now.

I had another look at it.

If a court had to decide the meaning of subsection (1) of section 60, it could not include architectural services or quantity surveying services. It might do that if the words chemical, civil, electrical or mechanical engineering works were left out. It would then be able to say that the design and planning services did include architecture. But there is a maxim that a general phrase is cut down by the subsequent use of a particular phrase. That is why one often finds in Bills " without prejudice to the generality of the foregoing the following matter shall be included ". If it was said that " without prejudice to the generality of the foregoing, chemical, civil, electrical or mechanical engineering works executed outside the State should qualify for relief ", I would say " all right ". You have a general principle which on the face of it could include architecture or quantity surveying and it is cut down subsequently.

Yes, but that is the Deputy's point about architecture being excluded from the wording, it is very much included in design.

Yes, but that wording is cut down in its meaning afterwards. Why, if that is so, go on to specify that it shall be so in connection with chemical, civil, electrical or mechanical engineering works.

Because it is exactly the same wording as appeared in subsection (1) of section 34.

That argument is that because X was there 20 years ago and X was wrong, therefore we should perpetuate it even though we know it is wrong.

But it has been worked since 1968.

With no complaints.

Certainly there are no complaints, because anyone who is getting the benefit of it will not complain. I do not quibble with their getting the benefit of it but they are getting it ex gratia of the Revenue Commissioners. They are not getting it because the law says they should get it.

The law provides that they may get it and it is being interpreted correctly. If there is a dispute about it and a person feels the Revenue Commissioners are wrong they may take the matter to another tribunal and have it determined.

Could we get over the problem by inserting the word " chemical " after the word " architectural "?

I do not believe it would help. It would lead to considerable difficulties.

By putting that word in, would you not rule out people like planning consultants and quantity surveyors? Architects have a special body themselves. There might be a danger in doing that.

An architect need not necessarily do electrical or mechanical engineering.

" Civil " work is regarded as dealing with buildings and structures. This is what an architect is involved in.

Civil engineering consists in the building of bridges, roads, sewers and other major heavy work. It does not consist in the designing of individual buildings. That is architectural work.

I have to disagree; my practical experience is otherwise.

Why should some people describe themselves as architects and other people as civil engineers? Many people describe themselves and their firms as being both architects and civil engineers because they are two separate areas. They have to describe themselves thus; otherwise the general public would not be aware that they performed both distinct types of work.

I do not know. I have seen many building contracts which a civil engineer or an architect has dealt with. I think there is a danger in putting in the word " architectural ".

There is a danger of putting in a word that will convey what the Revenue Commissioners already say is contained in the section.

The section is well drawn and operates satisfactorily.

I have now lost interest in whether or not " architects " are in or out. I am interested in the fact that we have now reached a subsection which, to say the least, is misleading. It means in practice the Revenue Commissioners tell us, something which it does not say in words. All we seek to do is to change the wording to accord with what the Revenue Commissioners say is the practice, and we are being refused permission to do that. I ask you, Sir, what is the point of this wretched, silly Committee? Why not hold this meeting in the office of the Chairman of the Revenue Commissioners and let them do whatever they want to do?

That is not——

What is the point of being here?

With respect, may I say the Deputy has made a most unfortunate attack upon a Committee of the Dáil which is seriously considering a matter. The fact that other members of the Committee do not find themselves in accord with Deputy O'Malley does not justify him castigating the members of the Committee or the Committee itself, and that is exactly what Deputy O'Malley has done. I am absolutely stunned that a man should have such a superiority complex that when other people are unable to agree with him he regards them as deserving the description he has just applied to them.

Dr. Hillery disagreed with the Minister.

He is also censuring very severely his own colleague who was responsible for the 1968 legislation.

There are, no doubt, many defects in the 1968 legislation, as there are in all finance legislation, because it must be corrected every year without exception. When an obvious defect is found in the legislation here and the Committee is told to forget about it, that the Revenue Commissioners will administer it even though it means something different to what it contains here, what is the point of legislating?

This section, has been worked since 1968 to include architects.

Yes, I agree. Therefore it should say that.

It becomes part of the practice.

It is a wrong principle—and the Chairman knows this—that the Revenue Commissioners should decide to include something that is not included here. I am not saying they are wrong in giving the relief to architects. The legislation as originally drafted should have made that point clear, but it does not do so; it confines it to engineering only.

It does not. It confines it to design and planning services——

——in connection with chemical, civil, electrical or mechanical engineering.

And " civil ". That is the important word.

Civil works, chemical works, electrical works, mechanical engineering. If the English language has any meaning, then architects are most certainly included.

Deputy O'Malley asked a very relevant question. Is civil engineering the same as architectural business?

It is because it is dealing with civil engineering works, and that is all an architect is engaged on.

Making of roads, bridges, sewers——

That is part of civil engineering. Deputy O'Malley seeks to limit the meaning of the word " civil " which is not a correct limitation. That is my personal opinion.

Is the Minister completely happy with the definition as embodied in this section?

Yes. Since it has operated satisfactorily for the past eight years, it is a fair presumption that it is satisfactory.

At the same time, where we can see defects or where some of us might consider that there are defects, have we not got an obligation to tighten up and to eliminate those defects? If architectural business is meant, why not say it?

Because it is delimiting the civil side of it.

This Bill runs to over 250 pages. The attitude of the Minister for Finance is that even one word of an amendment, if it comes from the Opposition, is not acceptable. If that is his attitude I do not see much point in the Committee.

That is not the Minister's attitude and Deputy O'Malley knows that. We have debated this section at some length, and I think it should be put.

Now we see the arrogance; whether it is right or wrong, put it through.

Put it because it is good. I consider that the suggestion that has been made would be bad and would be more restrictive than the section as it stands.

I do not think there is any serious danger from the taxpayers' point of view.

No, there is no danger from the taxpayer's point of view. There is danger from the legislative point of view.

I think the most insidious thing is the personal attack by the Minister on Deputy O'Malley.

I am in good company.

The Minister wants this Bill to go through and he is going the right way about not getting it.

At least I can be thankful that I was not attacked from Slattery's pub in Terenure.