Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

We can all give examples, but the Minister gave an example of somebody on the pandemic unemployment payment for 12 months. First, he will acknowledge that this is impossible because the pandemic unemployment payment did not come into existence until mid-March. People were earning full wages prior to that, or at least a large cohort was. Indeed, people came off the pandemic unemployment payment and went back to full wages. The Minister gave his euro example. Does he acknowledge that over the 21 weeks in which he is asking us to go back in time and make this payment taxable from 13 March to 5 August, the total amount that would have been received by somebody in receipt of the PUP during that period would be €7,350? If the person was paying tax at the 20% rate, which does not mean he or she would have to have a huge amount of income earned in the other 31 weeks, it would be a tax liability of €1,470. If the person was paying at the 40% rate, it would be €2,940. They are not small numbers.

The Minister says with a straight face that this is not retrospective taxation, which is the core here. Page 9 of the Bill states: "Paragraphs (a)(i) and (b) of subsection (1) shall be deemed to have come into operation on and from 13 March 2020". Regardless of how one wants to use language, let us deal with the law. We are legislators and we are asked to change the law. This section asks us to change the law so this payment, which was made under section 202, will be taxable from 13 March. Why is that text in the Bill? That payment, made under section 202 of the Social Welfare Consolidation Act 2005, is not taxable. We know that because it is in the Finance Act 2018, which contains a table. The Minister says it is not an urgent needs payment because it is recurring and not means tested. Section 202 of the Social Welfare Consolidation Act 2005 does not mention the words "recurring" or "means tested".

It does not matter what way the Minister says it because we must deal with the law. The law is that this payment was not taxable, regardless of the Minister's intentions. This is retrospective and the Minister should admit it, at least, instead of trying to take the members of the committee for fools. It states: "... shall be deemed to have come into operation on and from 13 March 2020". I understand why the Minister might not want to admit it. The principle he is asking this House to implement is unheard of in western democracies. It only happens in extreme cases where there is tax avoidance. Three years ago I put forward an amendment that sought to close down a loophole used by Mr. Denis O'Brien to avail of tens of millions of euro in tax benefit by using an Irish collective asset management vehicle, ICAV, to purchase or sell property. There was no suggestion that we would deem that amendment to have come into operation on a date prior to the Finance Bill. Even I would not have argued for that. Retrospective taxation is something that should not be done, but that is exactly what is in this legislation. Regardless of the amounts to be paid, and some of them could be significant depending on the earnings before 13 March or after 6 August, and that is a serious issue in itself, the issue here is one of principle. The issue is why we would go back and change the law to make the payment taxable from a certain point in time.

Perhaps the Minister can point out for me where section 202 in the Act states that it has to be recurring or means tested. It does not. I refer the Minister to the Finance Act 2018. It states clearly with regard to section 202 of the Act which only deals with urgent needs payments - it is not as if the section deals with a large number of payments - that payments are exempt from taxation. The Minister is familiar with it. Perhaps the Minister can enlighten me.

During his time as Minister for Finance or indeed his time as Opposition spokesperson on finance, how many times has he either proposed as a Minister or been aware as a Minister that we have done anything like this, where we have applied taxation to a payment that legally, as we sit here today, is not subject to tax? Why do we know that? How can I say that with conviction? It is because this amendment is necessary. It will apply tax on that payment from 13 March to 5 August. From 5 August on, the payment had a statutory basis. The payment is subject to tax; that is indisputable. Regardless of whether one likes it, it is subject to tax and that is it. Prior to that date, however, it is not. Maybe the Minister can give us other examples of where we have gone back six months to make taxable a payment which previously was not legally taxable. I am not talking about going back to the point where the Finance Bill was introduced. I am talking about long before that.