THE COMMISSION on Taxation must address “the scandal of tax exiles”, Labour spokeswoman on social and family affairs Róisín Shortall said yesterday.
In a statement, she added that if the commission’s report, due to be completed tomorrow, was to win broad support then it “must recommend reform of all areas of the tax system, including the reliefs available only to the wealthy”.
As reported in The Irish Times yesterday, the commission is to propose a property tax, water charges and a carbon tax.
Ms Shortall said she was concerned that “the series of leaks we have seen over the past few days point only to an additional series of measures that will hit lower and middle-income families . . . We have had reports of a new property tax that would hit every homeowner . . . not to mention water charges and a carbon tax.
“The Labour Party supported the establishment of the Commission on Taxation but at the time we expressed concern that its membership appeared to be disproportionately skewed towards those who have had a professional relationship with the wealthy,” she said. “We were also critical of the terms of reference which made no reference whatsoever to the capacity of high earners to minimise their tax liability through avoidance measures.
“If the commission simply comes up with a series of recommendations for new taxes without addressing, for instance, the scandal of tax exiles then it will simply . . . infuriate taxpayers.”
She said there was still a “vast range of reliefs” available only to the wealthiest. “The most recent report of the Revenue Commissioners on the effective rate of tax for the top 400 earners (for 2003) showed that 48 per cent of the highest earners in the country paid less than 5 per cent tax on their incomes,” said Ms Shortall.
“The Government does not even know the cost of some of the reliefs . . . For instance, I have been unable to secure from either the Department of Finance or the Revenue Commissioners the cost of tax reliefs on directors’ pensions and self-administered pension schemes.
“I hope that the commission’s report will not simply be used to justify a further round of tax increases for families who have already been hit by levies and tax increases, but that it will be the start of a process of delivering a more balanced tax system.”
The 17-member commission is chaired by former Revenue official Frank Daly. Its report is due to be considered by the Cabinet in September.