Some of 230 proposals 'radical'

PRESS CONFERENCE:THE REPORT of the Commission on Taxation would, if implemented, broaden the tax base without increasing the overall tax take, its chairman Frank Daly said.

Unveiling the report at a press conference yesterday, he said the 550-page report contained some radical measures that involved reintroducing tax not seen in the State for decades.

Mr Daly, a former chairman of the Revenue Commissioners, noted the report contained more than 230 recommendations and would retain Ireland’s status as a low-tax economy. “Some of the measures we recommend are radical and involve taxing ourselves in ways that we have avoided for decades.”

He said the measures would bring greater stability to tax revenues. “They will bring greater certainty to the capacity of the State to support those in need. They will reduce uncertainty about sudden changes in tax rates and structures.”

Mr Daly said the three main recommendations capable of generating income are property tax, which could yield between

€1 billion and €1.2 billion per annum; carbon tax (an annual yield of €500 million); and new water charges, which would bring in some €400 million after five years. New restrictions on high earners would also lead to more taxes being collected by the exchequer.

He said the commission set out to strike the appropriate balance between income, capital and spending. The effect of that was to broaden the base and shift the burden of tax away from areas where economic growth is or has most potential. “So, we looked to property taxes, spending taxes, especially environmental taxes, and income taxes in that order.”

When asked for details of the property tax, Mr Daly said the commission did not set a rate but set out two scenarios, one based on a tax of 0.25 per cent of value of the home and another on 0.3 per cent of value.

He said the tax would be self-assessed and the value would be a market value, but would be based on very broad bands of €150,000. He said a house valued at between €300,000 to €450,000 would bring in €900 per annum at the 0.25 rate.

He said there would be exemptions and waivers for those on low incomes and also said there should be different methods available to pay the tax. The money raised should be directed to local authorities, and the commission has recommended that all councils should have revenue-raising powers (by way of setting rates) by 2014.

In relation to water charges, Mr Daly said the situation that now pertained in Ireland is anomalous and that Irish domestic users use one-third more water than people elsewhere. Providing water services in the Sate costs between €680-€700 million currently, with no incentive to encourage conservation of water.

Asked about plans aimed at clamping down on tax exiles, Mr Daly said they would be effective. “These are two rigorous tests that have been applied successfully in other countries. We do no just mention them in passing,” he said.