Paschal Donohoe (Dublin Central, Fine Gael)

I thank the Deputy. This amendment seeks a report on the design, potential yield and distributional impact of a wealth tax on net household wealth above certain thresholds to be provided within six months of the passing of this Bill into law. This matter has been raised by Deputies with me and my predecessors in recent years.

As he will be aware, wealth can be taxed in a variety of ways, many of which are already applied here in Ireland. These include capital gains tax and capital acquisitions tax. These are, in effect, taxes on wealth, in that they are paid by an individual or company on the disposal of an asset or the acquisition of an asset through gift or inheritance. There is also deposit interest retention tax, which is currently charged at 33%, with limited exemptions, on interest earned on deposit accounts, and, of course, local property tax, which is a tax based on the market value of residential properties. Another is stamp duty, which is charged on the transfer of shares, stocks and marketable securities of Irish registered companies, as well as on the purchase of property, both residential and non-residential. It follows that any revenue raised from a wealth tax, no matter what form it takes, may not be additional to the existing forms of wealth taxation, as revenue from those taxes could be affected by the introduction of a wealth tax.

In examining the topic, the Commission on Taxation and Welfare, which reported in 2022, identified challenges that would impede the implementation of such a tax. It concluded that a new tax on net wealth should not be introduced without first attempting to substantially amend our existing taxes on capital and wealth. As an alternative, the commission posited that a more productive route would be to re-examine CGT and CAT. The rationale for this approach is that there are existing taxes on wealth that have well-established, but distinct, bases and are well understood in their operation.

A 2024 report by the Parliamentary Budget Office entitled An Overview of Taxes on Wealth in Ireland found that household net wealth had reached record levels - valued at €1,112 billion in 2024, up from €466 billion in recent years - and has outpaced price and wage inflation over the past decade; and that the revenue yield from taxes on wealth is relatively small.

The report also notes that housing wealth is the most significant component of household wealth in Ireland. The report suggests that changes to wealth taxes or the introduction of a new wealth tax should be considered, and notes that a specific wealth tax risks an increased concentration of overall tax receipts on a relatively small proportion of taxpayers. Instead, base-broadening measures are proposed by the PBO to increase the number of taxpayers and revenue sources.

We continue to take action against inequality through our tax and welfare systems. We have one of the most progressive systems of taxes and social transfers of any EU or OECD country. We already debated the progressivity of our tax code when it comes to income tax and USC earlier.

I am aware that my officials currently are exploring the prospect of updating the joint research previously carried out by my Department and the ESRI in 2016, which examined the potential impacts of a household wealth tax. If proceeded with, and to provide a comprehensive analysis, this work will take time and it is not certain to be completed within six months from the passing of this Bill. For those reasons, I do not propose to accept this amendment.