Tom Parlon (Laois-Offaly, Progressive Democrats)

I am glad to have the opportunity to contribute to this debate and to raise a number of important issues that may assist the debate on taxation matters. The measures contained in the Bill consolidate the budget and are evidence of the continued commitment of the Government to pursue fiscal policies which promote growth in our economy, reward work and alleviate the burden on taxpayers, especially those on lower pay. In 2005 the Government will achieve, ahead of schedule, its target of taking those on the current minimum wage out of the income tax net entirely. The Government will also ensure, through the measures being introduced in the Bill, that all workers obtain a significant reduction in their tax burden.

The Bill confirms the budget day income tax package which concentrated available resources on those at the lower income levels and on the elderly. The personal tax package of €682 million is impressive by any standards. The increases in personal credits and the standard rate bands mean that a single person on the average industrial wage will now pay 14% less tax. There are also increases in the band for single and widowed parents. Altogether, 52,000 taxpayers are taken off the higher rate of tax.

As a result of the increases, more than 650,000 of the 1.9 million income earners will be exempt from paying tax on their earnings. It also means that for standard rate taxpayers an additional €1,450 per year, or almost €28 per week, is exempt from tax in the case of a single person and €1,750, or almost €34 per week, for married single earners.

The Government's commitment to the elderly is underlined by the income tax measures in the Bill. In particular, under the age exemption limits system, those aged 65 or over are exempt from tax up to specified limits. For 2005 the limits are €16.500 for a single or widowed person and €33.000 in the case of a married couple where one or both are aged 65 or over. The age exemption limits are being increased for the fourth year in a row. In four years, the limits have increased by almost 53%. Inflation for the same period is expected to be just over 13%. These measures provide ample evidence of the Government's commitment to keep down taxes on wages and protect the real value of incomes for pensioners on low income.

I particularly welcome the steps taken in the Bill to address the difficulties many first-time house buyers face in their efforts to get on to the property ladder. The significant reduction in stamp duty for first-time buyers has been widely welcomed. The thresholds are generous. There will be no stamp duty on first-time purchasers of second-hand houses up to £317,500 in value and reduced rates on such purchases up to £635,000. This new exemption threshold is above the national average price for second-hand houses and is above what the average first-time buyer pays for a second-hand house anywhere in the State.

In regard to budget tax changes which impact positively on particular sectors of the economy, I welcome in particular section 115 of the Bill which confirms, as announced in the budget, stamp duty relief for exchange of farmland for farm consolidation purposes with effect from 1 July of this year.

Section 32 extends capital allowances on tourist accommodation to registered guesthouses and registered holiday hostels. Section 119 provides for a reduction in the rate of companies' capital duty charge from 1% to 0.5%, which will help maintain our attractiveness as a location of choice for the establishment of companies. I applaud the Minister on his introduction of various anti-avoidance measures, as I am sure would all members of the taxpaying public. It is recognised that our tax system depends on each person who is meeting his or her tax obligations having confidence that his or her neighbour or competitor is also complying. The Bill should be commended for seeking to close off a series of abusive tax loopholes in the VAT, income tax, inheritance tax, stamp duty and life assurance areas. Equally important, the Bill gives very important additional legal powers to the Revenue Commissioners to pursue tax evaders.

I welcome in particular the provision which will allow Revenue to access, on a sample basis, information on single premium life assurance polices to detect where these policies may have been used as an investment vehicle for undeclared income. The use of this power will be subject to the authorisation of a Revenue Commissioner where he or she has reasonable grounds for suspecting that such policies may have been used to facilitate tax evasion. An important initiative is the addition of a new offence to the list of revenue offences in section 1078 of the Taxes Consolidation Act to address the issue of persons who knowingly facilitate tax evasion. The increase in the threshold for publication of tax offenders from £12,500 to £30,000 is a sensible move which is broadly in line with the recommendations of the revenue powers group, as well as the recently published report of the Law Reform Commission. Overall these changes go a long way towards striking the correct balance between not over-burdening compliant taxpayers while at the same time being able to take swift and effective enforcement action against those who are not compliant.

In the area of improved tax administration, the Revenue Commissioners' initiative to allow PAYE taxpayers to e-file returns and to electronically avail of a range of self-service options in regard to their tax affairs is welcome. The Bill contains the necessary legislative measures to underpin these changes. I understand that the new system will not change the fact that ultimate responsibility is on PAYE taxpayers to make sure their tax credit certificates are correct or to look for an end-of-year review if they feel they have over-paid. It will give PAYE taxpayers the ability to ascertain their tax position and in particular to access their revenue records over the Internet at any time; amend their tax credit certificate on the web either to claim an allowance or credit not on the certificate or to change the amount involved; request an on-line review or balancing statement based on the revenue records and confirmation that the details are correct and complete; and receive an automatic repayment in certain cases where Revenue is fully satisfied from its records or from recent contacts that a repayment is due.

This Finance Bill will support the progress of our economy and prepares the ground for further growth in living standards. It signals our ongoing commitment to sound budgetary management. In its totality, the Finance Bill reflects the Government's commitment to ensuring that fiscal policy, and the tax system in particular, play a positive role in supporting the country's economic development.

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