Rónán Mullen (Independent) | Oireachtas source

The proposed recommendation No. 3 relates to the recommendation I sought to introduce on Committee Stage and is similar to recommendation No. 2, which has been ruled out of order. I note your ruling, a Chathaoirligh, and the explanation which I received from you on the grounds that it could involve a charge upon the people or upon the Revenue, as per Standing Order 41.

I note that you stated that it has long been held by successive cathaoirligh, and in the other House, that the reference to a charge on the people refers to the imposition or the increase of a public taxation measure and that a charge on the Revenue is a reference to public expense. I believe there is a significant ambiguity in the wording of Standing Order 41 because of the phrase "the people" as opposed to "people". Bunreacht na hÉireann is quite clear that references to the people are generally references to the people as a collective and it seems to me that a more obvious interpretation of Standing Order 41 would be that the imposition of a charge on the people refers to the imposition of some kind of public expense and that the imposition of a charge on the Revenue would basically amount to a tax cut. Having regard to the fact that the Constitution already significantly curtails the extent to which the Seanad can make recommendations in respect of a money Bill, the broadest possible interpretation should be given to the meaning of Standing Order 41, so as to facilitate Seanadóirí in their work. In the event of any claimed ambiguity, as I believe there is here, then the benefit of the doubt should be given to the legislator seeking to do his or her work in that regard. Having said all of that, I respect your decision. I suppose it is a matter now to see whether there would be support for a clarification of the standing order, to allow a situation that I and many others here would regard as much more sensible, which is that given the restrictions on the Seanad on money Bills, that there would be a broader latitude when it comes to proposing measures that would increase taxation, as in this case, by narrowing the scope of an exemption.

All that said, recommendation No. 3 seeks at the very least to provide that we would now begin to establish how much revenue is being lost to the State by what I believe is the overly broad application of the artists' exemption, indeed I would say, the abuse of the artists' exemption. This recommendation would provide that within six months of the enactment of the legislation the Minister would lay before the Houses a report on the operation of section 195 and to include an analysis of the amount of revenue forgone as a result of authorising exemptions to serving or former public office holders, as applies at present. In the case of former public office holders, those who are in receipt of a pension of €20,000 or more, and to individuals who received income in excess of €100,000. The recommendation does not refer to the amount of pension being received by the former public office holders that would be among the subjects of this report. The report would also indicate the tax lost to the State where individuals who have received income in excess of €100,000 in the previous year of assessment are availing of the artists' exemption.

I note in passing that the wording is slightly different from what was in the recommendation on Committee Stage. That was to try to address the point made by Senator Higgins on that occasion. I am not sure whether I have done so in a manner that is satisfactory to her, but it improves the recommendation somewhat by providing that it would be in the year immediately prior to the year of assessment that the €100,000 threshold was exceeded. The point here, as I stated previously - I will not labour it again because I set it out at length on Committee Stage and it is on the record of this House - is that this exemption was always only intended for artists and writers who were low paid and impecunious. I mentioned the cultural memory of the artist starving in the garret for the sake of his or her art and that it was as a gesture to the importance of the creative community in society that this artists' exemption was introduced, providing that a person could earn up to €50,000 before he or she would be liable for tax, or that they could earn €50,000 tax-free. I said that was a potential value of €20,000 lost to the taxpayer, or shall we say sacrificed by the taxpayer, for the sake of the merit of the work being done by these artists and writers. I do not believe that it was ever intended to be within the scope of the relevant section of the tax code that a highly paid broadcaster writing his or her political memoirs or a sports star's memoirs would come within the scope of the artists' exemption.

I brought to the attention of the House the fact that the Arts Council had commented on the overly broad application of the artists' exemption by the Revenue in the past. I also drew to the House's attention the fact that a very high percentage of appeals was successful where the artists' exemption was refused. I strongly urge on the Minister to consider even at this stage that this is not the way things should be, that this is not the proper use of the artists' exemption. In fact, where biographies or autobiographies are concerned, for example, a biography of an artist or writer, the view of the Arts Council is that this might qualify for the artists' exemption only in circumstances where it sheds new light upon the person's work. It is not just the story of the person's life that is required. In order to meet the threshold of eligibility for the artists' exemption, if it is not a directly creative work but it is a book about an artist or a writer it should in some way shed new light on the interpretation of the artist or writer concerned. We are clearly a long way from any of that in the way this section is operating.While I regret that the recommendation cannot be put to the House because of the operation of Standing Order 41, we can at least begin the process of reform by providing that there will be a report done on the operation of the section and the money being lost to Revenue as a result of the excessively broad application of this tax exemption that is being availed of by people who are in no way low paid or impecunious.