The annual policy statement of the Government's National Competitiveness Council, published on 24 November points out that the Republic's tax system differs in many significant respects from our European Counterparts. Much of the media attention centred on its comments regarding property investment and property taxation, but these must be seen in the context of the overall report.

According to the NCC, “the need for property taxbreaks, such as the urban and rural renewal schemes, to stimulate regeneration has passed and they should not be extended beyond their existing termination dates, 2006 in many cases”. The call for a form of property tax is in the light of a proposal to “shift from the taxation of property transactions (stamp duty) to the recurring taxation of the property stocks”, or essentially to replace one existing form of property taxation with another. The statement also notes:

• Low direct rates of corporation tax and personal income tax, but a relatively high proportion of total taxation raised through direct taxes (40 per cent versus an EU average of 32 per cent).
• A high rate of consumption tax (VAT 21 per cent), and a high proportion of total tax revenue raised through consumption and other indirect taxes (41 per cent versus an EU average of 33 per cent)
• Low rates of social security tax (PRSI, etc.) and a very low proportion of total taxes raised through social security taxation (19 per cent versus an EU average of 34 per cent)
• Low taxes on property (1.5 per cent of GDP versus 3.3 per cent in France and 4.3 per cent in the UK)
• A low overall level of taxation when measured as a percentage of GDP (30 per cent), but an average overall level of taxation when measured as a percentage of GNP (36 per cent).