CCAB-I attended an oral hearing on Tuesday 24 February in connection with our submission to the Commission in May of last year. In our submission to the Commission in May 2008, our focus was on developing Ireland's international competitiveness through targeted tax policies, with an emphasis on developing and fostering innovation. Though the economic climate then was very different than it is today, we believe that message remains relevant and important, as illustrated by the Government's Framework Document on the Smart Economy of last December.

The Commission was established by the Minister for Finance on 14 February 2008 to review the structure, efficiency and appropriateness of the Irish taxation system. Submissions were invited from interested parties to assist in its deliberations of the issues referred to in the terms of reference.

CCAB-I comprises the Institute of Chartered Accountants in Ireland, the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants and the Institute of Certified Public Accountants in Ireland. The delegation to the Commission was led by Mr Liam Lynch of KPMG who chairs the CCAB-I Tax Committee.

Commission on Taxation in Context

The Framework Document being used by the Social Partners in the ongoing discussions on an economic renewal plan makes specific reference to the work of the Commission and notes that “the Government is asking the Commission on Taxation to identify appropriate options to raise tax revenue”.

This being the case, it would seem that the Commission on Taxation has an even bigger task on hand than originally envisaged, in that its original terms of reference were framed in the context of commitments to keep the overall tax burden low. That of course was almost a year ago – an aeon in terms of the economic developments since.

The Framework Document is short on tax specifics – it states:

“The adjustment to be achieved through further taxation measures will be informed by the following principles:

• Changes to be fair and equitable with a higher proportion falling on higher incomes while minimising distortionary effects between different forms of tax
• Support the productive sector of the economy to keep Ireland competitive
• Ensuring that tax expenditures are fully evidence-based
• Broaden the tax base and make changes that are straight forward, easily understood and easy to administer
• Additional progressive tax measures consistent with the social solidarity approach

Additionally, given the urgency of the situation and the role that taxation will have to play in bringing stability back to the public finances, the Government is asking the Commission on Taxation to identify appropriate options to raise tax revenue and to complete its report by September 2009.”

September 2009 was the original deadline established in February 2008 for the Commission to report back.