The Gazette 1983

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INCORPORATED LAW SOCIETY OF IRELAND GAZETTE
Vol. 77 No. 8. October 1983
In this issue . . .
Comment 207
Masters and Apprentices 221
Rights of Children and the discretion
of the Courts under Section 117 of
the Succession Act, 1965 223
Society Staff Retirements 231
Comment .
. . . A Foolish Tax
Executive Editor:
Editorial Board:
Advertising:
Mary Buckley
Charles R. M. Meredith. Chairman
John F. Buckley
Gary Byrne
William Earley
Michael V. O'Mahony
Maxwell Sweeney
Liam O hOisin, Telephone 305236
THe views expressed in this publication, save where
other-wise indicated, are the views of the contributors
and not necessarily the views of the Council of the
Society.
The appearance of an advertisement in this publication
does not necessarily indicate approval by the Society for
the product or service advertised.
Published at Blackhall Place, Dublin 7.
AS the date of implementation of the Residential Property
Tax grew nearer so the concentration of minds on the
detailed provisions revealed extraordinary examples of
misplaced logic in the legislation.
One thing must first be made clear; objection is not being
taken to an additional tax on those whose annual incomes
exceed £20,000. While many in this income bracket may have
been hard pressed by the recession and by existing levels of
taxation they are still in a group which may have to be pressed
even more heavily in the short term in the pursuit of fiscal
rectitude. There may even be a case for the introduction of a
property tax but the mix of the concepts of income level and
property value upon which the Residential Property Tax is
based has been applied with a kafka-esque logic which must lead
to ludicrous consequences.
The two aspects of the tax which have drawn most criticism
are firstly the aggregation of all household incomes, requiring
the tax payer to pay tax based on the incomes of third parties
over whom he may have no control and secondly, the "market
value" concept which with its presumption of ownership of an
un-encumbered fee simple is so artificial as to raise serious
doubts as to its constitutionality.
The tax as introduced is a nonsense. It pays lip service to the
doctrine of simplicity of taxation by the introduction of a so
called "self assessment" method. Yet if it is to be monitored at
all it may well end up with the highest cost/yield factor of all our
taxes. This at a time when the report of the Commission on
Taxation has so recently recommended the simplification of our
tax system.
As the "Economist" has recently said of the UK system,
which we have not merely inherited, but have continued largely
to follow, "taxation is an illogical mess and every tax payer
knows it": Official figures in the UK show that sophisticated
property taxes and capital taxes have high cost/yield factors.
Our profession is only too familiar with the delays which,
perhaps necessarily, are involved in the processing of capital tax
cases, with consequent inconvenience or even hardship for
members of the community.
There is a strong argument that taxes should not only be
simple, but also efficient, meaning in part that they should not
result in tax payers taking a course of action which they would
not take in the absence of the tax. This applies not merely to the
taxes themselves but also to concessions which are given. The
"Economist" example of the half page of UK legislation
providing for tax relief on life assurance being accompanied by
28 pages of anti-avoidance legislation is not a unique one, nor
one unknown in this jurisdiction. Indeed some of the curious
provisions of the Residential Property Tax itself are evidence of
the difficulties of implementing efficiently what appears to be a
simple concept.
There is unfortunately evidence that our Revenue authorities
have been less than effective in collecting taxes from the
Corporate sector in recent years. Their resources should not
have been thinned further by the need to provide experienced
officials to monitor the collection of this new tax. It should never
have been introduced and should be repealed immediately. •
207