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GAZETTE
DECEMBER 1993
N E W S
Budget Submission Calls for
Abolition of 1% Levy
In a submission to the Minister for
Finance on the forthcoming budget
(1994) the Taxation Committee of
the Law Society has called for the
abolition of the 1 % Income Tax
levy, has suggested an appeals
system for Stamp Duty and has
argued that sufficient time must be
allowed for the debate and
examination on Finance Bills before
they are passed into law.
The submission notes that over the last
three or four years, Finance Bills have
become more technical and are placing
an increasing burden on the taxpayer.
The fact that such technical legislation
is presented to the public approxi-
mately four or five weeks before it
becomes law, does not give sufficient
time to consider the complexities of the
legislation. Frequently, Finance Bills
are passed under a motion of
guillotine. The Society's submission
suggests that two Finance Bills should
be published: the first would deal with
budgetary matters and could be passed
within four months of budget day; the
second would deal with technical
matters and anti-avoidance legislation,
and would not be passed earlier than
four months after its publication in
order to give time to the various
professional bodies to consider its
provisions and make recommendations.
Employment
Following on its submission on the
1993 Budget, the Taxation Committee
is recommending again that
employment creation be treated in the
same way as a "designated area". This
would mean that a double allowance
would be given for the expenditure
relating to every new unit of
employment created. Such a measure
would help indigenous industry in the
State as it is very difficult for such
industry to avail of any of the tax
concessions which are available to
foreign industries setting up here.
Capital Acquisitions Tax
The submission argues that section
121 and section 123 of the Finance
Act, 1993 are damaging, superfluous,
and should be repealed, since they
create a totally artificial situation in
relation to shares in private
companies. The Taxation Committee
further recommends that aggregation
should be restricted to twelve years
maximum; the introduction of a small
inheritance tax exemption; that the
limit for the small gifts exemption
should be increased to £2,000; that a
form of business relief similar to
agricultural relief should be introduced
for self-employed business, trading
companies and holding companies of
trading companies; and that additional
agricultural relief granted by the
Finance Act, 1993, should not be lost
by reason of the death of the disponer
within two weeks of the gift.
Stamp Duty
The submission notes that although a
Stamp Duty appeals structure has been
promised in the past, an appeals
system has not been established as yet,
and thus, an appeal in relation to any
i matter concerning Stamp Duty must be
! made to the High Court. The
submission also recommends that
assignments of debts should not be
liable for Stamp Duty; that the
contents of a dwelling house, if not
stated in a deed, should not be
aggregated for Stamp Duty threshold
purposes where they do not exceed 5%
of the total price of the dwelling
house; that first-time buyers of
second-hand dwelling houses (subject
to a limit of £100,000 purchase price)
should pay only 1% Stamp Duty; that
the Stamp Duty exemption should be
restored for exchanges where there is
no premises or dwelling house. It is
also recommended that in order to
facilitate the early retirement of
farmers and the transfer of land to the
next generation, a transfer of
agricultural land between parent and
child should be at a 1% rate.
Probate Tax
The submission reiterates the Society's
total opposition to the Probate Tax.
However, the Taxation Committee
argues that if the tax is not going to be
abolished, a complete exemption
should, at least, be granted for widows
and minor children, otherwise severe
hardship will occur.
Income Tax
The submission argues that the 1%
income levy operates as a tax on
employment and should, therefore, be
abolished and it suggests that the limit
for tax relief of 15% of income for
contributions to pensions should be
increased for people on low to medium
incomes. This would facilitate those
who make a late start in contributing
to a pension fund.
Value Added Tax
It is argued that Value Added Tax
should be at the lowest rate for the
following legal services: family law;
criminal litigation; civil litigation in
the District and Circuit Court;
purchase of residential property for
less than £100,000 and voluntary
transfer of agricultural land or
business premises from parent to child,
and agricultural property.
Residential Property Tax
It is submitted that it should be defined
clearly that the tax is not a charge
under any circumstances (except
where there is a voluntary conveyance
between husband and wife) under
section 72 of the Registration of Title
Act, 1964. Where a life tenant is liable
for Residential Property Tax, the
owner of the remainder interest should
not be liable for the tax also.
The submission was sent to the
Minister for Finance,
Bertie Ahem,
TD,
in early November, 1993.
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