Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank the Deputy. I do not propose to accept this amendment. The Government has no plans to introduce a wealth tax, although all taxes and potential taxation options are of course constantly reviewed. Wealth can be taxed in a variety of ways, some of which are already in place in Ireland. Capital gains tax, CGT, and capital acquisitions tax, CAT, are, in effect, taxes on wealth, as they are levied on an individual or company on the disposal of an asset, in the case of CGT, or the acquisition of an asset through gift or inheritance in the case of CAT. Deposit interest retention tax, DIRT, is charged at 41%, with limited exemptions, on interest earned on deposit accounts. The local property tax, which was introduced in 2013, is a tax based on the market value of residential properties. The domicile levy introduced in budget 2010 also constitutes a form of wealth tax. It is aimed at high-wealth individuals with a substantial connection to Ireland, regardless of whether they are tax-resident, to ensure they make a tax contribution to this country in a year of at least €200,000.

In order to estimate the potential revenue from a wealth tax, it would first be necessary to identify the wealth held by individuals. I am informed by the Revenue Commissioners that they currently have no statistical basis for compiling estimates on a potential wealth tax. Although an individual's assets and liabilities are declared to the Revenue in a number of specific circumstances - for example, after a death - this information is not a complete measure of financial assets in the State, nor is it recorded in a manner that would allow analysis of the implications of an overarching wealth-based tax. Comprehensive data on household wealth in Ireland, including assets and liabilities, were published for the first time earlier this year by the CSO. These data have been collected across the entire eurozone according to a standardised methodology. The data indicate that wealth inequality in Ireland for 2013, as measured by the Gini coefficient, is lower than the eurozone average. The results also show that wealth is less concentrated at the top of the distribution here than the eurozone average. Central Bank analysis of the data also indicates that while wealth inequality has increased since 2011, it is actually lower than in 2006, the earliest period for which data are available.

As part of the research programme agreed between my Department and the Economic and Social Research Institute, ESRI, covering macroeconomic and taxation issues, a research project involving detailed analysis of wealth distribution and taxation has been included. It is intended that this research project, based on the household finance and consumption survey, HFCS, published this year by the CSO, will commence shortly. A number of the issues highlighted by the amendments proposed by Deputies Pearse Doherty and Richard Boyd Barrett, including the estimation of the potential tax base and the yield of a wealth tax in Ireland, already feature as part of the work planned for the project. It should be noted that the data gathered by the CSO as part of the HFCS were not collected for the purpose of calculating the potential yield from a wealth tax but to collect general information on the financial situation and behaviour of households.

My Department will monitor and consider any additional information and data that come to light and will continue to examine potential taxation sources, as I stated at the beginning of this reply.

I do not intend to accept the amendment.

The Deputy referred at length to Mr. McWilliams's television programme. Mr. McWilliams relied heavily for his data on a Credit Suisse report but that report indicated that much work remained to be done to refine estimates of wealth in a country. I do not know whether the television piece was completed before the CSO report was published in January but Mr. David McWilliams did not reference it. I refer to the report on the household finance and consumption survey which was published by the Central Statistics Office in January 2015. It presented the results of the household finance and consumption survey I referred to already. The survey was carried out between March 2013 and September 2013 on behalf of the Central Bank. Such surveys were carried out across Europe. The main highlights of the report were that a household's main residence accounts for the majority of most households' gross wealth at 48% on average. Financial assets account for a much smaller proportion of gross wealth at an average of 13%. More than half of households hold some form of debt, with mortgage indebtedness proving to be a particularly heavy burden for young cohorts. However, the mortgage repayment burden is more evenly spread across the age distribution, with younger borrowers benefiting from lower interest rates and long mortgage terms. The median value of net wealth is €105,000. This is in line with other European countries where the average is €109,000. The top 20% of households hold 70% of net assets, which is similar to the position in other European countries. In Ireland, the concentration of wealth at the top end of the distribution is driven by two factors, namely, larger holdings or real assets and relatively smaller holdings of debt. As such, a great deal of the Deputy's argument was based on incorrect facts. It is not his fault they are incorrect, they come from other sources.