THE DEPARTMENT of Finance has confirmed that it has received the completed report of the Commission on Taxation’s comprehensive review of the taxation system.
Minister for Finance Brian Lenihan is expected to get his first sight of the report, which runs to more than 600 pages, when he returns from holiday next week. He will also then be briefed on its findings by his officials.
Department sources said yesterday that Mr Lenihan may be in a position to bring the report to Cabinet on September 9th, the week before the Dáil returns to debate the legislation designed to establish the National Asset Management Agency (Nama).
The 17-member commission, chaired by the former head of the Revenue Commissioners Frank Daly, was set up in February 2008 with a brief to review all aspects of the taxation system, including its structure and efficiency.
There are strong expectations that the commission will recommend the introduction of some form of property tax, as well as a carbon levy. Its brief was to keep the overall tax burden low, including retaining the 12.5 per cent corporation tax. It was also asked to introduce measures to further lower carbon emissions on a revenue-neutral basis.
Government and Opposition TDs expressed support yesterday for a suggestion from economist Colm McCarthy that a Dirt-type Oireachtas inquiry should be established to determine why Irish banks were left so badly exposed by their loan banks.
Under its 1999 Dirt (deposit interest retention tax) inquiry, the Public Accounts Committee uncovered significant evasion of tax by leading financial institutions in the 1980s and 1990s.
Mr McCarthy told RTÉ radio that a Dirt-style inquiry would not save a penny but would greatly improve the public understanding of how banks had “got into this mess”.
Michael Moynihan, the Fianna Fáil TD who chairs the all-party Oireachtas Committee on Economic Regulatory Affairs, said the committee would examine the proposal closely, but added that it had already been examining this possibility over the past few months.
“It would need to be deeper than the Dirt inquiry. It would have to look at how money was loaned, to whom it was given, why it was given and who called the shots. The question of the bonus system in the banks would also need to be looked at.”
However, the scope and powers of such an inquiry might by restricted by the Supreme Court judgment relating to an Oireachtas committee’s inquiry into the John Carty shooting by gardaí in 2000.
Several Oireachtas committees have sought legal advice on their powers, including those of compulsion, in the wake of that ruling.
Labour finance spokeswoman Joan Burton supported the call for a Dirt-style inquiry into the circumstances that led to the current banking crisis.
“The decisions made in regard to banking, particularly in respect of the financing of property deals, has left the country facing what is probably the most serious economic crisis in the history of the State.
“Taxpayers face a potentially enormous bill for having to rescue the banks and developers and they are entitled to know who made the key decisions in the banks.”
In an interview with RTÉ’s Morning Ireland yesterday, Mr McCarthy also said the Government might end up owning most of the Irish banks if the “haircut” – the discount that Nama applies to the banks’ assets – reflected the real value of the assets.
He described the debate that cast Nama against nationalisation as false, saying both things could happen. “The Government could end up nationalising the banks within the terms of Nama if the haircut is severe enough,” Mr McCarthy said.