Revenue Over the Years 1941 - 1949
On May 31st. 1941, German planes bombed Dublin's North Strand, killing thirty seven and injuring many in a tragedy which would be long remembered. The Budget, a week earlier, had considerably increased Corporation Profits Tax on limited companies benefiting from wartime demand. The public sector wage-freeze was extended to the private sector. That year, Comhaltas Cána (Association of C&E Officers) proposed to loan £500 free of interest to the Government for national defence.
In December, Pearl Harbour was bombed. America entered the war and Foynes saw an influx of seaplanes. The first US troops in Europe arrived in Northern Ireland in February 1942. Meanwhile in the South, fears of invasion gave rise to the Taxes & Duties/Special Circumstances Act, 1942. This allowed An Taoiseach special powers on raising finance, in the event of occupation by the armed forces of another country. The Act increased the income tax rate to 7s.6d and provided special relief for expenses incurred "in respect of certain works carried out under The Air Raid Precautions Act, 1939".
The tide of war began to turn with the British victory at El Alamein. Bing Crosby's White Christmas broke new world records. "Play it again" was the theme as Casablanca hit the screens. The Keynes Plan for post war disarmament and economic co-operation was launched to mixed reaction in England in 1943. Rationing continued. Ladies were advised to use beetroot juice for lipstick and men were told that razor blades could be restored by rubbing against the rim of a tumbler (empty, of course). But for many listening to Vera Lynn, now topping the charts, it was a matter of eating properly again, rather than meeting again. At home, further Revenue controls were implemented on the export of sugar.
In these war years the Central Bank, Irish Shipping and Córas Iompar Éireann were established. In 1944, as the allies launched the D-Day offensive, an era also ended in Revenue with the retirement of Chairman Carey- the last of the 1923 Board. He was succeeded as Chairman by Commissioner Cleary and Richard P. Rice became the new Commissioner. An expert on taxation, Rice had transferred from the UK administration which he had joined as a Surveyor of Taxes in 1916.
In 1945 as the war drew to a close, 11,000 cases of smuggling were reported on the Irish land frontier. While displaced people in Eurppe picked up the threads, Irish Revenue people returned from their wartime stints in other Departments. Proposals for revision of Income Tax law and practice, designed to simplify and remove inequities, were discussed in the Seanad and the Dáil. These inequities arose from the law and not the administration, Senator Douglas emphasised and went on to say: "I have every confidence in the integrity of the Revenue whose officials make a genuine effort to give a fair deal to every taxpayer, without fear or favour." Agreeing, Seán T. Ó Ceallaigh, Minister for Finance, said he knew of no other body of State officials who worked harder than those engaged on income tax. The setting up of a commission to examine the tax position, then agreed in principle, would not come to pass for another eight years.
On October 24th 1945, the first transatlantic passengers landed at Shannon Airport. Extra Revenue people were relocated to deal with this phenomenon. These included the late Seán Casey and others who set up homes there and helped develop Shannon into the thriving place it has become.
1946 saw bread rationing, strikes, increased emigration and falling unemployment. The Exchequer Returns reflected increases in income tax and corporation profits tax, the latter soaring from an annual average of £1m to £4.5 m. The taxes contribution had been steadily rising from 20% of total revenue receipts to 40% in 1946. Shipping was also booming. Recruitment, at a standstill during the war, took place from special competitions for ex-army people and school/college leavers. That year, Commissioner ó Domhnaill retired and was succeeded by Arthur J. Donnelly. An outstanding academic, Donnelly had acquainted himself so quickly with intricate Revenue legislation that a Minister for Finance remarked: "Asking Donnelly a question is like pressing a button - the information floods out automatically."
It was not just a white Christmas, it was a white Ireland from January to June 1947. Although shrouded in memories of snow, this was a year of far reaching developments in Ireland. The Customs Free Airport Act, 1947 designated Shannon as a Free Airport, following earlier agreement at the Chicago Convention on Civil Aviation. Exempting transiting passengers and goods from Customs formalities, the Act retained controls on public health, plant/ animal diseases and currency movements. While the Department of Industry & Commerce controlled the Customs Free Airport, Revenue staff were very involved in operating and controlling the new procedures. This Act, a milestone in Revenue history, heralded later developments in controls.
The Free Airport was a developing situation and Revenue's handling of the constant changes there displayed the adaptability with which they handled the Shannon Free Zone, over ten years later. As the laws on importation/exportation did not apply to direct traffic between the airport and countries outside the State, C&E officials were empowered to stop and search vehicles within twenty miles of the airport. Another development involving Revenue was the world's first Duty Free shop at Shannon, destined to grow from strength to strength. A seed, sown at this time, that would also develop, was the concept of Customs Unions to facilitate freedom of trade between the economies of different countries. This was acknowledged in the General Agreement on Tariffs and Trade (GATT) in 1947.
That year, the All Ireland football final was played in New York's Polo Grounds when John Joe Reilly captained the victorious Cavan team that defeated Kerry. This was the heyday of the late Micheál O Hehir's GAA radio commentaries. The new Departments of Social Welfare and Health, both under one Minister, were set up. At this stage, old age pension enquiries were just a yellowing topic on old instructions for many Revenue people.
Transformation of the countryside began with the rural electrification scheme. The first chairman of the Electricity Supply Board, Richard F. Browne, was a former Senior Inspector of Taxes. In Revenue, Commissioner Rice became chairman when Timothy Cleary retired. An expert on double taxation, the new chairman was to the fore in the negotiations that led to the 1947 amendment of the Residency Agreement with the UK and the first Double Taxation Agreement with the USA. Corkman, Seán P. Mac Cormaic joined the Revenue Board. Serving with the Inland Revenue under the UK administration, Mac Cormaic was at work in the Custom House the day it was burned.
A new Anglo Irish Free Trade Agreement, linking prices of Irish store cattle and sheep to guaranteed British prices, came into force in 1948. Ensuring better markets for Irish livestock, less land was put to the plough. The US funded Marshall Plan, providing financial aid for war torn countries, greatly assisted European development. It was the springboard for economic resurgence and the catalyst that sparked the emergence of free trade within the single market of a unified Europe. Greatly benefiting NI and the UK, the Marshall Plan allocated Ireland £46m, of which seven eighths was by means of a repayable loan.
In 1949 another former Senior Inspector of Taxes, James P. Beddy, was appointed chairman of the new Industrial Development Authority (IDA). Established to create and develop Irish industry, the IDA played a major role in the evolution of the country to its present, unprecedented economic state. That year, Ireland left the Commonwealth to become a republic and joined the Council of Europe. From the ashes of war and conflict emerged the idea that unity, not bloodshed and devastation, was the way forward.