Collecting the property tax

Thu, Apr 5, 2012, 01:00

MANY PEOPLE who dutifully paid the €100 household charge are likely to have felt betrayed on reading that some Ministers now favour handing over collection of the property tax to the Revenue Commissioners.

The ostensible rationale for this stratagem is that some local authorities had shown themselves to be incompetent at collecting the current household charge and, therefore, it would make more sense for the Revenue to simply deduct the property tax due to be introduced next year from people’s pay packets. “The lesson we learned is that self-registration has had mixed results and Revenue should take control of deciding who is liable, and collecting the tax,” one senior source told The Irish Times.

This would be an appalling travesty. If future property taxes based on value are needed to fund local services, as Ministers have repeatedly claimed in relation to the flat-rate household charge, then they should be paid directly to the local authorities. The key to restoring the fortunes of local government, in every sense, is to have them send out the bills annually – just as they did in the past with domestic rates. If this was to be taken over, along with so much else, by an arm of central government – the Revenue Commissioners – it would sever the connection that should exist between citizens and their local authority and reinforce the corrosive and debilitating in loco parentis relationship between central and local government.

Few would dispute that the campaign to persuade people to pay the relatively modest household charge has been a fiasco. And yet, about half of those liable have paid up. The Government would be in a much stronger position to proceed with a more equitable property tax based on value if it had any idea what houses are worth. But it has taken the State Valuation Office no less than 12 years to complete valuation surveys of homes in just three local authority areas – Fingal, South Dublin and Dún Laoghaire-Rathdown – which leaves 31 remaining to be completed, including Dublin and the other four cities. A crash programme of valuation would be needed to avoid having to rely on self-assessment.

An effective collection mechanism is bound to be high on the agenda of the Inter Departmental Group on Property Tax, set up by Minister for the Environment Phil Hogan. As Chambers Ireland has pointed out, “if the tax is structured exclusively to fund local services, then this will greatly enhance its acceptability while also assisting in the reform and consolidation of the local government system”. Certainly, those who have paid the household charge and face the prospect of paying even more in property taxes from next year are entitled to expect that the Minister will bring forward real reform of local government as a matter of urgency.

If the Government had done this in tandem with imposing the household charge, it would have won more public support and acceptance. Handing the collection role to the Revenue Commissioners would send out the wrong signal and confirm the grossly excessive centralisation of this State.