The Commission on Taxation and Welfare – the government body set up to examine how public services are to be funded into the future – is to consider the merits of replacing the local property tax (LPT) with a broader site value tax.
The current LPT regime only applies to residential property but a site value tax would draw in non-residential and business premises, potentially boosting exchequer revenue.
A site tax could also be used to encourage owners of underutilised or underdeveloped land to build out their sites to increase the supply of housing.
A reference to a site tax is contained in the commission’s terms of reference, which were published on Tuesday, as the body launched a three-month public consultation process.
It said it was seeking opinions on various elements of the Irish taxation and welfare systems and in particular how public services would be funded in the context of an ageing population and the shift to a low-carbon economy.
The consultation comes as a report from the Organisation for Economic Co-operation and Development's (OECD) warned governments were facing a fiscal time bomb related to funding pensions and healthcare as populations age – one that will "dwarf"the costs associated with the current Covid crisis.
Commission chairwoman Prof Niamh Moloney of the London School of Economics said the commission would review how best the taxation and welfare system could support economic activity and income redistribution, while promoting increased employment and prosperity "in a resilient, inclusive and sustainable way".
“We want to hear from as many people, groups and organisations as possible to ensure that a diverse range of experiences and perspectives inform the development of the report of the commission, which is due in July 2022,” she said.
"You don't need to be an expert on tax and/or welfare policy for your opinion to be valued," she said. The consultation runs until January 7th.
In its terms of reference, the commission is also tasked with looking at what changes, if any, should be made to the social insurance system, including structure and benefits coverage.
This will include examining the possibility of moving to a more European-style social insurance model where unemployment benefits are linked to previous PRSI contributions.
The commission will also look at the findings of the Pensions Commission, whose recent report recommended an extension of the current retirement age.
Consideration will also be given to how the taxation system can be used to help Ireland move to a low-carbon economy, not just in terms of promoting more sustainable energy use but also to how the exchequer will adapt to the gradual loss of revenue from excise duty on petrol and diesel and other fossil fuels.
The previous commission on taxation, which published its report in 2009, advocated the introduction of a local property tax and carbon tax, both of which were adopted.