Damien English (Meath, Fine Gael)
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Question 112: To ask the Minister for Finance his views on the heavy reliance of the Exchequer on revenue from the housing sector; and if he will make a statement on the matter. [10208/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Activity in the housing sector impacts primarily on VAT, Stamp duty and Capital gains tax. Housing market activity also impacts on Income tax and PRSI receipts and Corporation tax from construction sector company profits. While revenues from housing market activity such as Stamp duty and Capital gains tax have made an increasing contribution to the Exchequer in recent years, we are not overly reliant on receipts from these sources. For example, taken together the Stamp duty and Capital Gains tax tax-heads are forecast to contribute just under 15 per cent of total targeted tax revenues in 2007 and it is worth noting that a significant proportion of receipts from these tax-heads come from sources other than residential property.

In contrast, the 4 main tax-heads — VAT, Income tax, Corporation tax and Excise duty are forecast to account for 84 per cent of tax receipts this year, even allowing for the lower than usual corporation tax forecast which is due to the cash-flow reduction arising from the ending of the transitional payment arrangements. Care has been taken not to plan the public finances around an assumption that receipts from Stamp duty and Capital gains tax will continue to grow in future years as they have in the recent past. This is a prudent and sensible approach to take and it has been endorsed by the IMF and other commentators.