Richard Bruton (Dublin North Central, Fine Gael)

I move amendment No. 8:

In page 11, line 19, after "emoluments." to insert the following:

"Notwithstanding the foregoing, capital allowances on investments undertaken in order to comply with government requirements would be allowed as a deduction according to the standard rules which apply for such an investment.".

I resubmit this amendment because on Committee Stage the Minister did not have an estimate of the cost of the concession sought. I am sure he has had the opportunity in the intervening time to work out its cost. The Minister argued against the amendment on Committee Stage on the grounds that by investing in environmental protection or other compliance requirements, one is enhancing the wealth of the owner. In fact, these compliance requirements enhance the common good and not the wealth of the owner. If the wealth of the owner were to be enhanced, there would be no requirement to have compliance rules and regulations, because it would be seen as a good investment.

The same problem applies in this case. There is no sunset clause on this tax. As a result, unfair elements, apparent to everyone, are being imposed and will take on a life of their own, perhaps not for perpetuity, but for a considerable period. We ought to take more care in this regard. I accepted the Minister's argument that we do not wish to see very high earners sheltering income and avoiding tax and that the levy should apply. However, the decision to rule out capital allowances is of far greater import than simply addressing the case of a small number of high net worth individuals who succeed in avoiding every tax. This goes to the core of what constitutes one's income before or after allowances are calculated, and what is needed for investment to keep the business in operation.

I am not happy with the caviller argument of the Minister to the effect that applying a system of levies which takes no account of people who plough money back into their business is fair, because a small number of high net worth individuals avoid every tax. If one wishes to tackle tax matters relating to high net worth individuals, I can provide many ideas. One could cap the aggregate of tax reliefs available from any source at a given figure. We previously suggested a figure of €100,000. There are many ways of getting at those individuals without creating a tax structure which is inherently flawed, which is the case in this instance.

See this speech in context