The Gazette 1971

The Constitutional Taxing Power John Temple Lang, M.1A. Under Article 15-2 of the Irish Constitution :

only in the Dail, and if not so initiated is presumably not validly enacted- However, if an Oireachtas Bill does not deal only with the imposition of taxation, it is not a "Money Bill", and it may be initiated in the Senate or, if initiat- ed in the Dail, the Senate has 90 days (subject to Article 24) and not 21 days in which to consider it. If draft legislation of a subordinate legislature does not deal only with the imposition of taxation, it is not a "Money Bill", even if it is a "Bill", because of the way "Money Bill" is defined in Article 22. This seems simply to be a gap in the Constitution : there is no intelligible reason for it. The reason why an Oireachtas Bill not limited to money matters is not a "Money Bill" is pre- sumably to prevent the Dail from restricting the powers of the Senate by disguising other Bills as Money Bills, and perhaps also because Bills which are not limited to tax matters might require longer consideration, or might not be so urgent, as Money Bills. No such con- siderations apply to the draft legislation of subordinate Legislatures. It seems unlikely that the courts would allow a subordinate legislature to take powers which it would not otherwise have merely by including some non-tax clauses in the taxing Regulation or Order. It is therefore submitted that the Constitution prohibits the imposition of taxation by any legislature (except taxation by local authorities) except by a Bill initiated in the Dail. Imposition of Taxation Clearly draft legislation is a Money Bill if it deals (only) with the imposition of taxation by whatever name the taxation is described. The "imposition" of taxation presumably means the creation or purported creation of a legal obligation to pay a fixed or ascertain- able sum of money to the body creating the obligation, or to some other State or semi-State body. A declara- tion that there is a previously existing duty to pay, or an adjudication as to the amount of money due by a par- ticular taxpayer under a previously existing duty, is not a legislative act and may of course be made by a court or an Inspector of Taxes. Article 21 clearly applies where the draft legislation creates the obligation to pay the tax or lays down a new formula to implement a pre- viously existing obligation. For example, if an Act of the Oireachtas required all taxpayers or a given class of taxpayers to pay such sum as a specified State authority might from time to time direct, the decision of the authority in question would be a legislative act and a taxing measure, because it would govern the amount of the tax liability, although an obligation to pay an un- specified and variable sum of money had been pre- viously "imposed" by the Oireachtas. Any proposal of such an authority to alter the formula, basis of assess- ment or base of the tax without altering the percentage rate of tax or levy, or to alter the rate without modi- fying the tax base, would be a legislative act. Taxation Defined Taxation implies payment of money under a general legal duty not derived from tort, contract, trust or other private obligation—creating action, and imposed on a category of taxpayers and not on a single taxpayer- 119

"The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas : no other legislative authority has power to make laws for the State." However: "Provision may . . . be made by law for the creation or recognition of subordinate legislatures and for the functions and powers of such legislatures." Article 20 on "Legislation" refers to "Bills" without defining them. The Article however on the face of it suggests that the word means "draft legislation the en- actment of which is being considered by one or other of the Houses of the Oireachtas". The Article does not deal with legislation by "subordinate legislatures". Article 21 says that "Money Bills shall be initiated in Dail Eireann only" and defines "Money Bill" as a Bill which contains only provisions dealing with all or any of the following matters namely "the imposition, repeal, remission alteration or regulation of taxation . . ..", but says that "Taxation" does not include any taxation raised by local authorities- "Bills" which are not "Money Bills" may be initiated in the Senate. Drafts of legislation of subordinate legis- latures clearly need not be initiated in either House of the Oireachtas. What is the status under the Constitu- tion of draft legislation for the imposition of taxation by a subordinate legislature? One line of argument is that since the legislation of a subordinate legislature is not a "Bill" in the sense of "an Oireachtas Bill", it is not caught by the Article which reserves to the Dail the power to initiate "Money Bills". This would mean that taxation could be freely imposed by a subordinate legislature (on the authority of an Act of the Oireachtas), although the Senate cannot even initiate a Bill for the imposition of taxa- tion. This interpretation is obviously unlikely. It is also quite incompatible with the qualification (Article 22.1.2) which excludes from the definition of "Money Bills" taxation imposed by local authorities. This quali- fication would be unnecessary if legislation by local authorities, which do not call their proposals for strik- ing rates "Bills", was not within the definition of a Money Bill. Bill as Draft Legislation The difficulty can be resolved by understanding "Bill" to mean "draft legislation, whether for consideration by the House of the Oireachtas or not". This is quite consistent with the use of the word in Article 20, which deals only with Bills initiated in or passed by one House of the Oireachtas, but neither deals with nor excludes the possibility of "Bills" being introduced or passed elsewhere. This interpretation is also entirely con- sistent both with constitutional principle and with the other wording of the Constitution in Article 21 to 27 inclusive, although these Articles in fact deal only with Oireachtas Bills. It follows that Article 21 means that draft legisla- tion containing only provisions dealing with the im- position, regulation, etc. of taxation may be initiated