Peadar Tóibín (Meath West, Aontú)
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226. To ask the Minister for Finance the measures being considered to broaden Ireland's tax base beyond over-reliance on income tax revenues; and if he will make a statement on the matter. [40195/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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My officials and I are fully aware of the risks associated with this level of concentration and volatility and will continue to monitor the situation closely so that the risks of over-reliance on potentially cyclical or over-concentrated receipts under specific tax heads can be understood and mitigated. The actions that have been taken to mitigate these risks allowed scope for the Government to introduce a range of emergency support and stimulus measures in response to COVID-19. These include the creation and funding of the Rainy Day Fund, prioritising the reduction of debt and continuing to broaden the tax base.

A number of measures have been taken in this regard in recent years and include the introduction of the Universal Social Charge, annual domicile levy, and the Sugar Sweetened Drinks Tax. Non-indexation of tax thresholds, bands and credits can also operate to broaden the tax base. I have also taken steps to broaden and enhance the stability of our corporation tax base, including through the introduction of the 80 per cent cap on capital allowances for intangible assets in Budget 2018 and the introduction of a broader Exit Tax regime in Budget 2019.

The introduction of the Local Property Tax (LPT) in 2013 broadened the tax base to include residential properties and the tax is providing a stable funding base for local government. I propose to advance legislative proposals early in 2021 to implement the 2020 Programme for Government commitments and secure the future of the LPT.

More recently changes to the VAT rate and carbon tax changes were introduced. The Programme for Government also recognises that we need to remain cognisant of avoiding the mistakes of the past and being overly reliant on a narrow set of taxes. The carbon tax is set to increase throughout the lifetime of this government with an annual increase of €7.50 per annum to 2029 and €6.50 in 2030. To the extent that taxation measures are required to close the deficit in the medium term, the Programme for Government notes that we will focus any tax measures on behaviour with negative externalities such as carbon tax, sugar tax and plastics. This can be seen as a further step in broadening the tax base.