Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank the Deputies. 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, with similar taxes on the income from financial investments is charged at 41%, with some limited exemptions. It is intended to reduce the level of DIRT to 33% over a four-year period in this Finance Bill. There is a stamp duty levy on the transfer of shares which yielded €424 million in 2015. 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, whether they are tax resident or not, to ensure they make a tax contribution to this country in a year of at least €200,000. In 2014, a total of 12 individuals paid the levy yielding €1,986,858.

Comprehensive data for household wealth in Ireland, including assets and liabilities, were published for the first time in 2015 by the CSO. These data have been collected across the entire eurozone according to a standardised methodology. These 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. It should be noted that the data gathered by the CSO as part of the household finance and consumption survey, HFCS, were not collected for the purposes of calculating the potential yield from a wealth tax, but to collect general information on the financial situation and behaviour of households.

As part of the joint 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 household wealth distribution and taxation has been undertaken. This research project, based on the HFCS published by the CSO, is nearing completion and the results are to be presented at the annual tax policy conference hosted by my Department, to which Deputy Pearse Doherty alluded. This year’s conference is being held in Dublin Castle tomorrow, 23 November. I expect that all interested parties will attend this conference and engage in the debate.

The Department of Finance will monitor and consider any additional information and data that come to light and will continue to examine potential taxation sources on an ongoing basis. There is no doubt in my mind that there would be significant difficulties in determining the base, the types of assets to be included, the potential yield and more importantly broad acceptance for such a tax from the wider public. As the Deputies will appreciate, it is easy to propose the introduction of new taxes but it is often more difficult to achieve wider acceptance for the introduction and operation of such taxes.

Given that research on wealth tax is being carried out by my Department and the ESRI, I do not consider that it is necessary or appropriate to have another parallel stream of work as suggested by the Deputies in terms of the preparation of an additional report. Therefore I do not propose to accept this amendment.

See this speech in context