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

The Department of Finance participated in the interdepartmental group, reporting to the Minister for the Environment, Community and Local Government, the terms of reference of which were "to consider the design of a property tax to be approved by Government to replace the household charge and that is equitable and is informed by previous work and international experience". The report of that group is being considered in preparation for budget 2013. The Deputy referred to a tax strategy group in the context of the household charge in 2011. The tax strategy group is an interdepartmental committee chaired by the Department of Finance, with membership comprising senior officials and advisors from the Departments of Finance, An Taoiseach, Health, Environment, Community and Local Government, Jobs, Enterprise and Innovation, Social Protection and the Revenue Commissioners. Papers on a wide range of tax related issues are prepared for consideration by the tax strategy group in the period prior to the budget each year.

I presume that the concerns to which the Deputy refers are comments within one of the recently published papers which were presented to the tax strategy group in 2011 on taxation of property. That paper outlined advantages and disadvantages of the household charge, which is appropriate in a forum where various policy options are being discussed at official level. The paper also outlined the advantages and disadvantages of various other possible property taxation options. The paper pointed out that a flat rate charge, such as the household charge, delivered a tax on property, which was an element of structural reform suggested by the troika, and that it had the most potential of any short-term property tax option to be implemented quickly.

There has been no decision on the final version of the tax but my officials will analyse its impact on household incomes, as is customary when budget changes are being considered.

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