Dáil debates

Tuesday, 26 June 2007

Priority Questions

Departmental Bodies.

3:00 pm

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 79: To ask the Tánaiste and Minister for Finance the proposed membership and terms of reference of the planned commission on taxation in regard to the commitment contained in the programme for Government; when the commission will be appointed; when it is expected to report; and if he will make a statement on the matter. [17148/07]

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Tánaiste; Laois-Offaly, Fianna Fail)
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The programme for Government contains certain commitments in the area of taxation policy, including a commitment to establish a commission on taxation that will have a wide remit to consider the structure of the taxation system. It will be charged specifically with considering and making recommendations. For example, it will examine the balance achieved between taxes collected on income, capital and spending and report thereon; review all tax expenditures with a view to recommending the discontinuation of those that are unjustifiable on cost-benefit grounds; and consider options for the future financing of local government. Furthermore, in the context of maintaining a strong economy, the commission will investigate fiscal measures to protect and enhance the environment, including the introduction of a carbon levy or tax.

I will bring proposals to Government in the near future on matters relating to the establishment of the proposed commission, including its membership and terms of reference. Pending consideration by the Government of these proposals, I am not in a position to elaborate further on matters pertaining to the commission or its work programme.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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This proposal was made in some detail by the Labour Party. I am glad that, in the context of the formation of the new Government, the Taoiseach accepted, however reluctantly, that there should be a commission on taxation. I am aware that the Tánaiste has been an opponent of the idea of achieving tax justice, particularly for ordinary PAYE workers. He obviously had to bow to the exigencies of the situation and accept that there would be some form of commission on taxation.

It is important that there be some discussion on what the commission will do. In this context, it is very important that the Tánaiste outline to the House his thinking on who will head the commission and who its members will be. If they are simply those with vested interests, such as those in the Irish Taxation Institute and tax accountants, who make a lot of money advising very rich people on how not to pay tax, it would be unacceptable. Will ordinary PAYE taxpayers, who are the people who need tax justice, be represented? Will the commission be composed mainly of those who help rich people to pay little or no tax here? That is the critical question and I would be grateful if the Minister would elaborate on his proposals.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Tánaiste; Laois-Offaly, Fianna Fail)
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First, I wish to disabuse the Deputy of a few notions she put forward as if they had a factual basis. I assure her that in my discussions — I headed the negotiations on behalf of my party regarding the formulation of the programme for Government — I was not aware of the Labour Party's proposals. They certainly did not form part of my discussions since the Labour Party was not prepared to take our calls at any time over the past few weeks. That is a matter for the Labour Party to figure out.

I do not know where the Deputy got the idea that I opposed the establishment of the commission on taxation.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The Minister was also opposed to the reform of stamp duty and this fell into the same category.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Tánaiste; Laois-Offaly, Fianna Fail)
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May I reply to the assertions made in this question? The Deputy suggested that I was an opponent of the establishment of the commission on taxation. That is groundless. I negotiated with others the terms of the programme for Government that was unanimously adopted by the parliamentary party and I welcomed that vote of confidence. The suggestion by Deputy Burton that I opposed this commission is totally at variance with the facts since I negotiated its establishment. We have not had a commission on taxation for more than 30 years and I felt it would be timely to set up one. I would also point to the previous budgets and Finance Bills I have introduced into this House that have greatly assisted working families, to a much greater extent than was done by any of my predecessors, as the facts show in terms of disposable income and those who now pay tax, and the fact that capital taxes now pay almost four times more as a percentage of total tax revenue than when the Labour Party was in government. I could go on all evening but I do not have time because I want to answer some questions. I disabuse the Deputy of all those notions, wherever they came from.

I will bring forward proposals on the membership of the commission. I must discuss the matter with my advisers and officials to decide on the best thing to do. They are good, qualified people who are competent to do this work. I will then go to Government and when Government makes a decision I will come to the House to be held accountable for it all.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Is the Minister implying, as with other studies carried out by his Department on taxation, that the majority of people on this commission will come from the tax avoidance industry, as opposed to people interested in tax justice for PAYE workers?

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Tánaiste; Laois-Offaly, Fianna Fail)
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There are no grounds for that assertion.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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To recall the Minister's history, in the last four Finance Bills the Labour Party tabled amendments proposing the establishment of a commission on taxation and on each occasion, to put it inelegantly, the Minister rubbished the proposal. He is a late and reluctant convert to the idea. This is welcome, however, provided it is a serious attempt to achieve tax justice.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Tánaiste; Laois-Offaly, Fianna Fail)
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As usual there is no basis to the Deputy's speculation about the composition of the commission.