Simon Harris (Wicklow, Fine Gael) | Oireachtas source

Deputy Lawlor has summed up the position very well on behalf of the Government. It shows the hypocrisy of Sinn Féin policies North and South. The Bill is one in which the Government is undertaking to legislate in a number of areas where we gave commitments arising from the report of Dr. Thornhill. The Minister made it clear on budget day that it was his intention to do that. There will be a space and opportunity for all political parties in the not-to-distant future to spell out their economic visions. I advise that it will be important for the figures to add up and for parties to ensure that they do not do anything to impact adversely on job creation. If a party talks about wanting a united Ireland, it seems weird that it wants to have an income tax system in the Republic that does not tally with the taxation system in Northern Ireland. Does the party really propose, as we saw in its budget submission this year, that the marginal tax rate in this jurisdiction should be almost 20 percentage points higher than the marginal tax rate a short drive up the road in Belfast and that taxes on business in this jurisdiction should be much higher than in Northern Ireland? From the perspective of citizens in the Republic of Ireland and, I hazard a guess, Northern Ireland, that does not do much to encourage an all-Ireland economy.

The local property tax is forecast to collect €440 million in 2015. These receipts would be lost if the LPT was abolished and there is an onus on everyone to spell out how that would be replaced. I am sure Sinn Féin will do so and the Irish people can adjudicate on its proposal. Obviously, the loss of €440 million would be a substantial loss to the Exchequer, in particular given the point Deputy Tóibín made earlier. Under the terms of the Growth and Stability Pact, Ireland may not introduce discretionary revenue reductions unless they are matched by other revenue increases or expenditure reductions. This means that Government must consider very carefully any tax changes as any reduction will have to be offset elsewhere. I am further advised that there would be significant administrative issues and costs associated with such a measure for Revenue.

While the introduction of a value-based property tax was part of our obligation under the EU-IMF programme when it was first negotiated by Fianna Fáil in 2010 and remained a condition of the programme following subsequent reviews, the arguments in favour of a property tax go well beyond our obligations under the programme. The introduction of a property tax is part of a much broader approach to taxation of property, its aim being to replace some of the revenue from transaction-based taxes, including stamp duty on property, which had proven to be a very unstable source of Government revenue. We all know how costly such mistakes were to the Irish economy. The OECD has highlighted that annual taxes on land and buildings have a relatively small adverse impact on economic performance. I refer the House to the report, Searching for an Inclusive Growth Tax Grail: The Distributional Impact of Growth Enhancing Tax Reform in Ireland, on the benefits of having a property tax rather than having an economy without one. Therefore, the Government does not intend to repeat the mistakes of the past and I am not in a position to accept the amendment.

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