Finian McGrath (Dublin North Central, Independent) | Oireachtas source

This important Bill deals specifically with income tax, corporation tax and capital gains tax, which are all essential and crucial for the economy and the future of the country. Tax will always be the engine room of any society. The key is to get the balance right so that revenue is raised in a fair and equitable manner. If the Government gets the balance wrong we will never get out of this economic mess. We have a duty in this current climate to support sensible measures that will create jobs and assist families in difficulty. We have a duty to support the local economy and small businesses to help kick-start economic activity.

Property tax bills for 2014 were sent out last week and this is a significant burden on families in the period before Christmas and a big blow to the local economy. In fact, it is economic madness. Such decisions have a dramatic and negative effect on local economies and on small businesses in particular. The Government needs to act with sensitivity with regard to these issues.

I refer to the single parent tax credit issue which is dealt with in the legislation. The 2011 census shows there are 215,000 separated families in the State and 76,800 claimants of the tax credit. The Minister for Finance in his Second Stage contribution referred to the provisions of section 7:

Since the announcement was made I have listened carefully to the views of Deputies and I will be bringing forward an amendment on Committee Stage which will allow the credit to be used by a non-primary carer in situations in which the primary carer has no tax liability.

I hope the Minister will bring forward an amendment on Committee Stage to assist these families, because we have all been lobbied by these 76,800 families who have taken a major hit as a result of the provisions in this Bill. I refer to section 10 of the Bill, which provides for an exemption from income tax for the annual allowance intended to cover out-of-pocket expenses paid to reserve members of An Garda Síochána. This is a positive development because we need to support people who make an investment in the community.

I welcome the incentive for those wishing to start a business, which will provide an exemption from income tax up to a maximum of €40,000 a year for a period of two years to individuals who set up a qualifying unincorporated business. The individual must have been unemployed for a period of at least 15 months prior to establishing the business. The Minister has decided to reduce the qualifying period of unemployment to 12 months. This will give a leg-up to people who are unemployed.

My colleague Deputy Boyd Barrett has highlighted the negative aspects of some of the measures. We need to have an equitable taxation system. We need to stop hammering the disabled, the unemployed and those on social welfare and go after those who have the resources.

Policies are holding back the development of small business. I recently met an owner of a pub and restaurant who had to pay a commercial rates bill of €37,000, while some other business people had to pay up to €90,000 in commercial rates. At the same time these businesses have been forced to lay off five or six people from a total staff of 20 or 30 people. We need to consider how employers are prevented from taking on an extra four or five people. The Minister of State, Deputy Perry, has responsibility for small business. We have to stop screwing the small business person who wants to give employment in the local economy. Some wealthy corporations are getting around paying the 12.5% corporation tax rate through the use of schemes.

There are all kinds of schemes to get around it and they are not paying the full rate, which could yield another €4 billion or €5 billion for the purpose of assisting people. It is important to mention these points in the debate.

Section 50 which deals with a non-contentious issue will give effect to the increases in the tax rates for tobacco products from budget night which are estimated to raise €15.4 million in 2014. Smokers are taking another hit. Most smokers who see the amount of €15.4 million will just take the hit and get on with their lives. However, I advise the Minister to be very careful in dealing with the illegal cigarette trade. We all hear about the drugs gangs, the heroin gangs, the cocaine gangs and the shootings and killings all over the country, particularly in recent days in the capital city. The reality is that some of these gangs are involved in the illegal cigarette trade also. That is an issue that needs to be looked at very carefully in the context of section 50.

Section 51 will give effect to the increase in excise duty on alcohol products which came into operation on budget night and will bring in €148 million in 2014. There are ideas to generate revenue and bring in tax. My colleague, Deputy Richard Boyd Barrett, mentioned the financial transaction tax, an issue from which all of the major parties represented in the House have run a mile. We need to do this at national and international level because there is a huge pool of money that is not being brought in. Instead of cutting disability services at St. Michael's House or cutting the respite care grant, revenue could be generated to fund these services.

Section 47 which I support amends section 138 of the Finance Act 2001 which provides that persons suspected of committing an offence in dealing with unstamped tobacco must provide information for a Revenue officer or a member of the Garda Síochána. This is linked with what I mentioned earlier. When one examines the figures deeper, it is clear that tax revenues amounted to €29.24 billion at the end of October, €37 million or 0.1% above target. Net Voted expenditure amounted to €35.3 billion, €844 million or 2.3% below target. Income tax receipts were down by 3% on a monthly target of €1.36 billion. In the year to date income tax of €12.13 billion was collected compared to the expected figure of €12.25 billion.

The other elephant in the room is the issue of job creation. We need to focus both at a national and a European level on supplying, supporting and creating jobs. There are many people in the country who have resources.

Many people accept that this Finance Bill has been nicknamed the rugby players Bill. From now on Irish rugby players will have a stronger hand as the Bill will give them greater freedom to play for non-Irish clubs without a financial penalty. Under the current law, they have to spend the last years of their careers playing in Ireland to qualify for tax relief on their career earnings. The proposed new amendments will allow them to finish their careers anywhere in Europe, as well as in Iceland, Norway, Switzerland and Liechtenstein. There are breaks for professional rugby players. I do not begrudge rugby players a lump sum at the end of their playing careers, but I do regret the fact that the weak, the disabled and the unemployed are being hammered. In this Bill there are many sections that hammer them.

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