Written answers

Tuesday, 12 October 2010

9:00 am

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 237: To ask the Minister for Finance the recommendations in the Commission on Taxation report that he has so far accepted as policy and which of these he has implemented [36345/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The Commission on Taxation was established in 2008 to carry out a comprehensive review of the tax system. It submitted its report in September 2009. The report has a total of 250 individual recommendations covering income tax, capital, corporation, property and carbon taxes. A comprehensive overview of the Commission's recommendations was prepared by my Department for the Tax Strategy Group which is available on www.finance.gov.ie/documents/tsg/2009/09.05.pdf.

Of the total of 250 recommendations some simply set out general principles of policy while 51 recommended no change to the current situation. A number of recommendations have been implemented such as those relating to further restriction of tax reliefs for high earners, changes to remittance, a windfall CGT rate on rezoned lands, corporate tax holiday for new businesses and a carbon reduction orientated car scrappage scheme to name but a few. Other recommendations will be kept under review on an ongoing basis. I would draw the Deputy's attention to two areas.

Firstly the Deputy will be aware that the report of the Commission on Taxation made 111 recommendations on tax expenditures. The Report recommended that 23 expenditures should be abolished or otherwise modified; five of these were subsequently abolished in the 2010 Budget. The yield from this abolition amounts to €40m in a full year, the majority of which relates to service charges (€23m) from 2011 onwards. Further abolition of expenditures will be considered in the context of Budget 2011.

The measures that were abolished were:

Capital Allowances for child-care facilities

Income Tax relief on service charges

Tax relief provided for long term care policies

BIK relief relating to the loan of certain art objects

Modification of residence requirements for donors of property to the State

A further 31 recommendations made by the Commission proposed changes to the existing tax treatment of certain schemes.

The remaining 51 recommendations propose that there be no change in the current tax treatment of the expenditures concerned at the time of the Commission's Report.

Secondly, I announced in Budget 2010 that a carbon tax at a rate €15 per tonne would be introduced on fossil fuels. It should be noted that a carbon tax came into effect on 10 December 2009 in respect of petrol and auto-diesel and from 1 May 2010 to kerosene, marked gas oil (also known as 'green diesel' or 'agricultural diesel'), liquid petroleum gas (LPG), fuel oil and natural gas.

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