THE COMMISSION on Taxation will not now deliver an interim report but will instead produce its full findings later in the year, according to Government sources.
There had been speculation that the commission would produce an interim document outlining its views on a number of issues, especially a carbon tax, but it is understood that members feel it is better to wait and provide an overall perspective, probably in the late summer or early autumn.
Minister for Finance Brian Lenihan said in his budget speech last October that he would “fully expect” the commission to examine the issue of taxing child benefits and that he looked forward to “any progressive proposals” it might make in this area.
This is believed to have influenced the commission’s view that it should refrain from issuing an interim document and wait instead to produce a full-scale report on the various issues within its remit.
The Commission on Taxation was established by then-tánaiste and minister for finance Brian Cowen on February 14th last year, to review the structure, efficiency and appropriateness of the Irish taxation system.
At the time Mr Cowen indicated that its work would help establish the framework within which tax policy would be set for the next decade at least. The commission is to report by September 30th at the latest.
Chaired by former head of the Revenue Commissioners Frank Daly, the membership of the commission includes representatives from the social partners – the business, trade union, farming and voluntary sectors – and the accounting and tax advisory sectors, as well as economic experts and people with experience in central and local government.
Possible recommendations by the commission could include a carbon tax on heavily-polluting fuels such as coal; a property tax; higher income taxes; reductions in tax relief; and taxation of child benefit payments.
Outlining the commission’s approach in general terms, Mr Daly said in a speech last year that its guiding principles would be equity, simplicity and flexibility.
“Equity or fairness, broadly meaning taxing persons on ability to pay, measured by income or wealth. This reflects the commission’s terms of reference to consider the structure of the tax system in the context of maintaining an equitable incidence of taxation and to have regard to the commitment contained in the programme for government to increase the fairness of the tax system.”
He said the principle of simplicity requires that tax rules are known and that liability is clear. The taxpayer, he said, should know in advance the tax consequences of a transaction.