John Halligan (Waterford, Independent)
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To ask the Minister for Finance if he will consider a wealth tax as an alternative to property tax; and if he will make a statement on the matter. [42324/12]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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To ask the Minister for Finance if he will consider a wealth tax as an alternative to property tax; and if he will make a statement on the matter. [42283/12]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 35 and 57 together.

The Government has decided, as part of our commitment under the EU/IMF programme of financial support to Ireland, to introduce an annual recurring property tax. This forms part of a long term policy to broaden the tax base, to provide a stable funding base for local government and to assist the strengthening of democracy at local level. A Bill to introduce the tax will be published with the forthcoming Budget.

The Government does not propose at this time to introduce a wealth tax, although all taxes and potential taxation options are constantly reviewed.

Asset values increase and decrease over time and in the context of recent economic circumstances, they may have declined considerably in many cases. Thus, if the value of an asset or of an individual’s wealth is measured at a particular time there is no guarantee that the asset value or the individual’s wealth will remain at that level or increase from that point. This would make it difficult to predict the potential yield from a wealth tax and would have to be borne in mind in terms of its consistency as a source of revenue. Although property valuations have also experienced much fluctuation in recent years, international experience shows that an annual recurring property tax is a stable source of revenue and is therefore an important base-broadening measure for the Irish tax system.

To estimate the potential revenue from a wealth tax, we would need to identify the wealth held by individuals, which is not possible at present.

I am informed by the Revenue Commissioners that they have no statistical basis for compiling estimates in relation to a potentially annually recurring tax on wealth. Although an individual’s assets and liabilities are declared in a limited number of specific circumstances - for example, after a death - Revenue state that it is not in a position to link an individual’s income to her/his financial assets. It would therefore be difficult to gauge the likely return from a tax on wealth.

I am informed by the Central Statistics Office that the institutional sector accounts do not give an indication of the number of households or persons classified by the categories of wealth they hold. These statistics are based on aggregate information collected from financial institutions and do not contain the demographic details which would enable such a breakdown of the statistics. However, I understand that, following discussions between the Department of Public Enterprise and Reform, the CSO and the Central Bank, the CSO has commenced a “Household Finance and Consumption Survey”, which will include, inter alia , a survey of wealth. The first results of this survey will be available in 2014. The data to be collected by the CSO as part of this survey is primarily targeted as general information on the financial situation and behaviour of households.