Don't rush to judgment – there's some good stuff here

The Commission on Taxation report contains some controversial and emotive suggestions as to how areas like property could come into the tax system in the future. These and other issues need to be debated fully. However, Chartered Accountants Ireland warned that vigorous discussion of these issues should not swamp some of the very valuable pro taxpayer, pro business suggestions offered by the Commission on Taxation.

Commenting, Chartered Accountants Ireland Tax Director, Brian Keegan, said:

“In contemplating a property tax the Commission has clearly learned lessons from the Residential Property Tax, which was abolished more than ten years ago. The valuation bands they propose will make for a more robust system. There is no prospect however of such a tax being implemented in the short term – it would take time to set up the necessary infrastructure.”

Radical change was never going to come within the ambit of the Commission, not least because of the broad scope of the Irish tax system as it already exists. “The Commission has taken a clear view that a key component of our tax system in the future should be consistency – that the tax take should not be as vulnerable to volatile market conditions. We see this in the proposals to displace Stamp Duty with a property tax, to displace Vehicle Registration Tax with taxes based on vehicle usage, and also in the suggestions for reforming the pensions tax system.”

“Foreign Direct Investment has underpinned much of our economic growth to date, and an important factor in attracting Foreign Direct Investment is our tax regime. Many of the Commission proposals reflect the concerns of industry – for instance a better regime for multinationals headquartered in Ireland, and an enhanced arrangements for recognising investment in Research and Development” said Mr Keegan. The development of the Knowledge Economy would also be well served if the proposals for attracting highly skilled workers to the country were to come to fruition.

The Commission's analysis of the various taxation allowances and reliefs is carefully considered, and it highlights the extent to which the remaining tax reliefs are limited and controlled. “Ireland has moved over the past ten years from being a high tax rate, high tax relief economy to a low rate, moderate relief economy. The overall thrust of the Commission's report does nothing to reverse this, but does recognise the role of tax incentives and reliefs in influencing business behaviour.”