WITH THE Commission on Taxation report due to be presented this week, Minister for Finance Brian Lenihan and Taoiseach Brian Cowen have indicated reservations about its expected recommendation that a property tax be introduced.
“The burden of taxation is high enough,” Mr Lenihan told RTÉ, adding that the State’s economic problems would have to be solved “through further expenditure reductions and cuts”.
Meanwhile, Mr Cowen told the Sunday Independent in an interview published yesterday that he was “not wedded” to the idea of a property tax.
“What we’re basically trying to do here is find a tax system that helps to promote jobs but brings in sufficient money to provide the services that people need.
“Now a property tax of itself – if you look at the total amount that is taken in property tax, any property tax anywhere – compared to the total tax take, it is not the big element . . . If we can find a way to better fund local authorities let’s look at it.
“I’m not wedded to the idea of a property tax. But I want to make it clear that I want to come to a decision with my colleagues as to what is the best tax structure to keep as many jobs as we can in the country and provide a sustainable tax base for the future.
“Thirty-two years ago, before the 1977 general election, every party decided that rates were inequitable because they weren’t related to income. We have to look and see is there an equitable way of doing it but it’s in the context of what’s sustainable long-term . . . I want to see the evidence and the analysis, and then make a rational decision.”
Speaking about the Commission on Taxation report on RTÉ's This Week, Mr Lenihan said: "There's a lot of speculation about what is in the report. I haven't seen the detail of the report yet
“. . . I do want to make the point that I have made very clear in recent months and that is that the burden of taxation in this economy is high enough.”
Asked afterwards if a property tax and water charges would be brought in, he replied that the Government was committed to a carbon tax but reiterated his point that the tax burden in general was already high enough.
Mr Lenihan said yesterday he understood the commission’s report was being printed and he expected to be given the final report by the chairman of the commission, Frank Daly, later this week.
It is understood the commission will recommend that the proceeds from a property tax should be allocated to local authority funding.
It is understood from informed sources that, if the property tax proposals of the commission were implemented, the average payment would be less than €1,000 per annum and could be closer to a figure somewhere between €600 and €800.
The total amount of revenue to be raised from property tax is described as comparatively modest, at less than €1 billion per annum.