This year's Finance Bill, published on February 15th, contains 226 sections, five schedules and runs to 320 pages. But. . . there's more.
The Bill as published does not contain the detailed provisions for the new savings scheme. These will be introduced at committee stage, probably along with another 30 to 40 pages of Government and opposition amendments.
Long finance bills are not new. The volume and complexity of taxation law facing business in Ireland has grown steadily in the last decade. The 2000 Finance Bill was more than one-and-a-half times the size of the 1990 Finance Act, and more than two-and-a-half times the size of the 1980 Act. Since the mid-1990s we have only once had a finance act with less than 200 pages. The 1999 Act ran to a massive 384 pages.
The Finance Bill is a unique piece of legislation. It must be passed within four months of Budget day each year. In theory the Bill is processed through the Oireachtas like any other piece of legislation, but the practice is quite different. The short period in which to prepare the Bill, the complexity of the issues arising and the failure of the Oireachtas to significantly alter the way in which it considers the Bill, result in a major piece of legislation often being passed without a thorough examination of all its provisions.
Surely it is time to examine how we legislate in the taxation area. This is not a new problem, but with the growing complexity of tax legislation it needs to be tackled. The Commission on Taxation, in its 1985 report, highlighted a number of instances of inadequate consideration of issues, and hasty preparation of legislation.
The Commission considered the idea of enacting a technical Finance Bill separate from the budgetary process. Rejecting the idea, it expressed a preference that pressure on the Finance Bill be relieved by introducing new taxes in separate legislation. This, in the view of the Commission, would "allow more time for the drafting of the legislation and for full consultation and debate". Despite this wish, the practice is still to concentrate taxation changes in the Finance Bill. It is time that the concept of a Technical Finance Bill was revisited.
One spin-off of this growth in legislation is concern among tax professionals about the level of scrutiny that it received in the Oireachtas. Even though the length and complexity of the Finance Bill has grown, the procedures and practices adopted by the Oireachtas to consider the Bill have not fundamentally changed, particularly at committee stage, where the Bill should be scrutinised in detail.
The current practice can often involve large sections of the Finance Bill not being considered in depth. In 1999, the Finance and the Public Service Committee devoted three working days, or just 18 hours, to the Bill. In 2000 the committee considered amendments covering 68 pages in sittings that lasted 17 hours over three days.
The Oireachtas should be giving more time to considering the Bill. We saw how the Public Accounts Committee DIRT subcommittee was able to have sittings on Mondays and Fridays and to work very long days. But even with more time, there would also be a need to provide more expert input. The debate at committee stage is loaded heavily in favour of the Government side, which has access to significant expert resources. Given the importance and complexity of the Finance Bill, there is surely an argument for the Committee having some "independent" expertise on which it could draw. The Public Accounts Committee sub-committee made considerable use of legal and accounting expertise.
Enacting good, sensible, practical law is in the interests of Government and the taxpayer. It is time that some consideration was given to improving the drafting and passage of the Finance Bill.
Brian Walsh is chief executive of the Institute of Chartered Accountants in Ireland.
