Wednesday, 26 January 2011
Finance Bill 2011: Committee Stage
Joan Burton (Dublin West, Labour)
I move amendment No. 90a:
In page 196, before section 52, to insert the following new section:
Information on Tax Exiles
52.---The Minister shall within one month from the passing of this Act prepare and lay before Dáil Éireann a report on the contribution made to the Exchequer and in particular the contribution in that regard as a result of the measures introduced by the Finance Act 2010.".
The purpose of this amendment is to restate the position of the Labour Party on this issue. Significant numbers of people - the Revenue Commissioners suggest the figure is between 2,000 and 3,000 - are tax exiles from this country but, although technically not resident for tax purposes, they have the ability to come in and out of the country at frequent intervals, have homes here and, to all intents and purposes, live large parts of their lives here. Such people should make a contribution in this time of national economic emergency.
When the Minister presented the 2010 budget in December 2009, he announced that he would ensure a contribution was made to the country's coffers by non-resident tax exiles. However, while people in the PAYE sector and in business ended up paying their increased taxes almost immediately, nothing has happened yet in this regard. The Minister introduced the universal social charge in his budget speech early in December of last year, and those with private and public pensions were shocked when they opened their pension cheques this year and found that even those with medical cards, who had previously been exempt from such charges, and those with pensions of less than €26,000 - that is, most public service and private pensioners - were paying the new universal social charge at the top rate of 7% on their relatively small pensions.
On big days in this 30th Dáil, as more and more emergency measures were introduced and as the coffers of the State were being plundered for money to hand over to the banks, there was a phrase that Fianna Fáil Deputies were particularly fond of using, namely, "We are all in this together". Surprise, surprise: we are not all in it together. The people who have the use of clever tax advisers and accountants and who have offshore and onshore residences have been able, during the boom years, to be resident in the country but not resident for tax purposes. Following a campaign by the Labour Party, which I spoke about many times on the floor of the House, it was agreed that tax exiles should contribute to the Exchequer. The Minister said in his Budget Statement in December 2009 that he would make provision for this in 2010. When I asked questions about it, I was told that no information would be available until October 2010, and when October 2010 came, I was told "Sorry - we actually meant October 2011". This is in contrast to the people who opened cheques this month to find they were paying the new tax, the universal social charge, at fairly hefty levels from 1 January, having heard about it only in December of last year.
I ask the Minister for Finance and Fianna Fáil to agree to this modest amendment, which is phrased the way it is in order to be acceptable under the rules of a money Bill, under which it is impossible for the Opposition to table amendments that result in changes upwards or downwards in the taxation system. It is impossible for the Opposition to table motions that result in changes upwards or downwards in the taxation system. We want to have the report one month after this Act, because it is important, particularly for people in the PAYE sector, to know what the Fianna Fáil mantra, "we're all in this together", actually means.
One thing that has been most striking for Deputies on all sides of the House was the position of the self-employed in the construction industry, whether contractors, sub-contractors or ordinary workers, when the boom collapsed. Although they had been paying PRSI contributions and relevant contracts tax, RCT, where tax was being deducted at source in the case of contractors, once they lost their jobs and money, they could not claim unemployment benefit. Think of all the sub-contractors on the Pierse contract for the building of schools who found they could not be paid except by the liquidator, who had no money, even though this was a State-initiated PPP. They might have had a claim to job seeker's allowance but not to job seeker's benefit. However, if a spouse was working and earning a relatively modest amount, because the job seeker's allowance is means tested, this meant in many cases that the unemployed partner had no claim to that either. Very hard working self-employed people around the country, who, despite their businesses failing, made contributions, but have no entitlement to any type of State support. This is a major social issue all over Ireland. Remember that many tax exiles who have made fortunes in development and construction moved themselves and their wives offshore to facilitate tax planning and then came back to Ireland. Now look at the small people who are self-employed and how badly many of them have fared.
I recommend the Minister accepts that this report should be put before the House. The cost would be minimal, but it would give us the numbers of non-resident tax exiles and the parameters regarding the contributions the Minister for Finance believes it is reasonable they should make. I commend the amendment to the House on behalf of the Labour Party.