It seems futile to go through this Schedule in the same way as we would tackle the Bill. This Schedule amends the Income Tax Acts by substituting sections for existing sections, is that the position?

Yes.

That means deleting the sections in the Income Tax Acts?

Yes.

These are all amendments of the Income Tax Acts. Therefore, this Bill embodies a very substantial amendment of the Income Tax Acts and, presumably, all these amendments will still apply to corporations.

Yes. We have deliberately provided for avoidance of legislation by reference, by putting into this Bill amended sections of the Income Tax Acts where they fit.

That is to be recommended. Let us take for example, section 241 of the Income Tax Act, 1967 which shall be substituted for section 241 (6) of paragraph 1. That means that the existing section 241 of the Income Tax Act, 1967, as repealed and deleted and substituted for by this new section in the Schedule? Therefore, this Schedule is a substantial amending enactment?

Yes.

In other words, the Deputy is saying that this is an amendment of the Income Tax Act, 1967, not alone for the purposes of this tax.

It is a substantial amendment of the Income Tax Acts, as if it had been a section of an annual Finance Act.

As if it had been a section of that Income Tax Act itself?

Yes.

There are, however, two changes of substance which I should stress.

I know there are changes of substance but I am taking the form first. Suppose this Bill did not exist and these amendments of substance, or even form had to be made, the normal procedure would be for the Minister to bring in an amending section in the annual Finance Act which would read as this paragraph reads.

In this Schedule to this Bill we are effecting a substantive amendment to the Income Tax Acts and thereafter the Income Tax Acts will be read with this section inserted instead of the ones which are there already.

Yes.

That is my first point. My second point is: these sections have a bearing on companies. But to say that the whole of company taxation is covered by this Bill is to give an inaccurate impression. In other words, the Income Tax Acts, in so far as they are relevant—obviously they are relevant in certain cases otherwise these amendments would not be made—are still part of the tax code for companies.

Yes.

All that the Minister has really done, in principle, is to amalgamate the incidence of collection of income tax and corporation profits tax. Therefore, anybody who is looking at corporation tax must still take account of the income tax code.

Does it not also mean that anybody who is looking at the Income Tax Acts must now turn to this Bill if——

Only in relation to capital allowances.

I wonder if that is quite true. If we look for a moment at paragraph 6, section 241, which must be substituted. Is that the repeal of section 241?

Yes.

For all purposes?

Yes. The section deals with matters which are relevant to companies.

I appreciate that.

To take a practical case, the Revenue Commissioners issue these income tax amendments in the form of green books. Will corresponding amendments be issued with these green books?

Yes. The Deputy will be able to take out the old 241 of the income tax volume.

When I have to get my volume brought up to date I will get these amendments as well.

The Deputy will have to do that himself, which I always think a tragedy.

I will have to be very careful when doing it.

Any further points on the Schedule? Perhaps the Minister could highlight the important parts of this Schedule where there are changes.

There are a number of other sections——

I am dealing with the First Schedule. There are no amendments to the First Schedule.

Most of the significant anomalies have been referred to already.

They were obvious.

Yes.

It is much better to adopt the procedure adopted here, that is, to insert a substitution of the section rather than to amend them in bits and pieces by reference. I agree that it is preferable even though it appears like filling up a lot of space.

The ideal would be to produce in each year a new Bill incorporating the amendments, showing the changes made in red, as in legal proceedings.

This Schedule applies to all the system of capital allowances that apply to companies with due amendments required as a result of not interfering with the Income Tax Act, 1967. There are in particular three major amendments to the Income Tax Act, 1967.

As I said at the beginning, all we can do is place our trust in the Minister.

It is a terrible responsibility.

In all seriousness, the thing about having to deal with it in this way is that now the whole responsibility is being thrown on the Minister's advisers and on the permanent administration. They have to take the complete responsibility for legislation which, in the long term and in a democratic society, is not the best system because it will attract to the administration all the criticism that should rightly be carried by the representatives of the criticisers.

I have my doubts that that will occur.

I am very much afraid of some of the trends that are showing themselves.

It is our responsibility.

No, but outside, in regard to the way we parliamentarians are doing our business.

Could I inquire if the Minister has received any representations in respect of the First Schedule from accountancy bodies and so on?

No.

And they have seen this? There is nothing new since the printing of it?

Oh, no.

I move amendment No. 41a:

In page 229, Part I after paragraph 12, line 44, to insert the following new paragraphs:

"—. In section 333 (1) (b) of the Income Tax Act, 1967—

(1) after ‘ shares of annuities,'‘ and ' shall be deleted; and

(2) after ‘ other annual payment ' there shall be inserted ‘, and from income tax chargeable under Schedule F in respect of any distribution'.

—. In section 335 (1) of the Income Tax Act, 1967, ‘ Schedules C and D ' shall be deleted, and there shall be inserted ‘ Schedules C, D and F '.

—. In section 336 of the Income Tax Act, 1967, ‘ Schedules C and D ' shall be deleted, and there shall be inserted ‘ Schedules C, D and F '.

—. In section 337 (2) of the Income Tax Act, 1967, ‘ Schedules C and D ' shall be deleted and there shall be inserted ‘ Schedules C, D and F '".

I move this amendment for two reasons. One is to show that the Schedule has been read and re-read and the second one is to retain the existing exemptions. It is required to ensure that the exemptions on the following sections of the Income Tax, Act, 1967, will extend to distributions which under section 83 will in future be chargeable under the new schedule, Schedule F. Section 333 of the Income Tax Act, 1967, deals with income from dividends of a body of persons or trust established for charitable purposes. Section 335 deals with income from dividends of Friendly Societies. Section 336 deals with income from dividends of registered trade unions which is applied for the purpose of provident benefits. Section 337, income from dividends of savings banks.

I move amendment No. 42:

In page 239, paragraph 38, lines 43 and 44, to delete " section 221 of the Income Tax Act, 1967 " and to substitute " section 30 of the Corporation Tax Act, 1976 ".

This is a drafting amendment. Section 221 of the Income Tax Act, 1967, is being repealed by section 164 and the Third Schedule and is being replaced by section 30 of the Bill.

May I ask one thing about the Second Schedule? Right through occurs the word " table ". You refer to a table but where is it?

There are tables on pages 229, 230, 232, 233.

These are relevant tables, are they?

The tables contain amendments to sections. If we are putting in a totally new section the table is an amendment.

Where are the actual tables themselves?

Page 229.

These things here. They seem to be normal provisions other than being tables.

They can be identified by reference to the particular paragraph.

Right.

I move amendment No. 43:

In page 245, in column (3), to delete " In section 76 (2), the word ‘or‘ at the end of subparagraph (a); subparagraph (b)." and to substitute " In section 76 (2), the word ‘or‘ at the end of paragraph (a); paragraph (B).".

This amendment, No. 43, substitutes " paragraph " for a " subparagraph ". It is a drafting amendment.

I move amendment No. 44:

In page 246, in column (3), between " Section 219 (2)." and " Section 221." to insert " Section 220 (6).".

This amendment is to insert section 220, subsection (6), of the Income Tax Act, 1967, into the list of provisions which are to be repealed. It is being repealed and has been replaced by section 30, subsection (7), of this Bill.

This Schedule contains amendments which deal with enactments concerning double taxation relief. It deals with amendments that are designed to adapt existing provisions of the Income Tax Acts to cater for the replacement for companies of income tax and corporation profits tax by the corporation tax.

I move amendment No. 45:

In page 255, paragraph 1, sub-paragraph (3), line 10, after " in subparagraph (2) (b) are " to insert " payments of ".

This amendment is for the purpose of ensuring that the relief provided by paragraph 1 of this Schedule will not be available in respect of any amounts which, while becoming payable in 1974-75 or 1975-76, is in fact never paid. Subparagraph (3), amended as proposed, will secure that an amount payable in 1974-75 or 1975-76 will qualify for relief only when paid irrespective of the date of payment.

Amendments Nos. 46 and 47 are related and may be taken together.

I move amendment No. 46:

In page 256, paragraph 2, subparagraph (2), line 41, to delete " aggregate amount of the income " and to substitute " amount of the total income (including franked investment income, dividends paid by any body corporate and income which under any provision of the Tax Acts is exempt from any tax or is disregarded for the purposes of any tax or is deemed not to be income) ".

These amendments are required in order to avoid using the term " aggregate income " which is nowhere defined and to substitute " total income ", a term often met within the Tax Acts. The amendments also make it clear that the total income of the company to be used in adjusting the amount of expenses for 1974-75 being substituted for those of 1975-76 where appropriate is to be inclusive of franked investment income, taxed dividends, and exempt or otherwise disregarded income.

I move amendment No. 47:

In page 256, paragraph 2, subparagraph (2), lines 42 and 43, to delete " aggregate amount of the income " and to substitute " amount of the total income (computed in like manner) ".

This provides transitional relief in respect of certain payments.

There was some question of the recommittal of section 43. I was asked by various Members of the Committee earlier if they could recommit any other sections. I do not think any notice has been given or any request made to recommit any of the sections at this stage. The Minister understands the various points that were raised. His officers will have a note of them. They could, by arrangement, I take it, be recommitted on the Fourth Stage. I do not think there is any matter of real controversy that has come up——

Perhaps we might defer that because I have not had the opportunity of considering it.

I think you have one in relation to some insurance company.

That is right.

Very well. The suggested Report of the Committee is as follows: The Special Committee has considered the Bill and has made amendments thereunto. The Bill, as amended is reported to the Dáil.

Report agreed to.

Ordered to report to the Dáil accordingly.

Have we to fix a date now for the Fourth Stage in the Dáil.

That is done in the House when I make the report. I want to thank everybody very much particularly the staff who have had to work unduly long and continuous hours here, something for which I am very grateful. I think I am expressing the views of everybody in that I thank the Minister, of course for the manner in which he has met us.

I thank all the members of the Committee. I am very sorry that it was not possible for Deputy Colley to be here but I am very grateful for the manner in which others stood in for him on a very difficult Bill at very short notice. We are very appreciative of the co-operation which we received from the Opposition. I am sorry that pressure had to be maintained to try to get this Bill through on time. It was out of consideration for the public good. The Bill has not been whisked through without Members giving it an adequate examination. Such matters in it as caused a certain amount of anxiety have been debated here very thoroughly. I would like to endorse what the Chairman said about the staff. They have worked here under some considerable difficulties. I also take the opportunity of endorsing everything that has been very properly said about the Revenue Commissioners and my advisers and my Department. Without their expertise and their integrity it would not be possible for the legislature to work efficiently.

I would like to personally thank the Minister for his courtesy. I feel that he will give sympathetic consideration to the points that were made. We have already mentioned why, in principle, we feel dissatisfied that a Bill of this nature should have to be treated so cursorily. On the other hand, we appreciate the reasons and the Minister's friendly approach to this. We are reassured by the fact that it is the Revenue Commissioners we are dealing with and I think we can confidently rely on their advice. I would like to join also in paying tribute to the staff, the Minister's staff and advisers for the long hours and the hard work and patience they must have with us in a matter of this nature. My only regret is that the opportunity was not there to really examine the Bill as we should. Under the circumstances we appreciate the urgency.

I would like to second what Deputy de Valera said. I would like especially to mention the Chairman who has done a very good job.

I should have mentioned that also.

I should also like to be associated with that. In my other remarks, I forgot to pay tribute to the Chairman.

The Committee concluded its business at 6 p.m.