Paul Murphy (Dublin South West, Solidarity)
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100. To ask the Minister for Finance if he will introduce a wealth tax in order to broaden the tax base; and if he will make a statement on the matter. [16227/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, wealth is already taxed in a number of ways in Ireland.

These include Capital Gains Tax (CGT), and Capital Acquisitions Tax (CAT). Certain forms of Stamp Duty also act as taxes on wealth in a number of ways, including that charged on the acquisition of the shares, stocks and marketable securities of Irish registered companies, and on the acquisition of property both residential and non-residential. In total, the provisional net receipts from the tax heads in question came to approximately €4.3 billion in 2024, up from €3.9bn in 2023. Finalised net receipts for these forms of tax for 2024 will be available in the Revenue Annual Report later this year.

It follows that any revenue raised from a wealth tax, no matter what form it takes, may not therefore be additional to that generated by the existing forms of wealth taxation, as revenues from those taxes could be affected by the introduction of a wealth tax.

In examining the topic, the Commission on Taxation & Welfare's 2022 report identified challenges that would impede the implementation of such a tax. They concluded that a new tax on net wealth should not be introduced without first attempting to substantially amend Ireland’s existing taxes on capital and wealth. As an alternative to introducing a new tax on wealth, the Commission argued that the more productive route is to re-examine CGT and CAT. These are existing taxes on wealth that have well-established, but distinct, bases and are well-understood in their operation.

A 2024 report by the Parliamentary Budget Office (titled ‘An Overview of Taxes on Wealth in Ireland’) recommended that as the value of assets and wealth continues to grow, the various proposals put forward by the Commission on Taxation and Welfare could assist in increasing the yield taxes on wealth in a fair and balanced manner. The report suggests that changes to wealth taxes or the introduction of a new wealth tax should be considered within the context of the overall competitiveness of Ireland’s economy, while noting that a specific wealth tax risks an increased concentration of overall tax receipts on a relatively small proportion of taxpayers. Base-broadening measures are instead proposed by the Parliamentary Budget Office to increase the number of taxpayers and to diversify revenue sources.

In addition to the aforementioned taxes on wealth, the Government takes action against inequality through our broader tax and welfare system.

Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country, which contributes to the redistribution of income and to the reduction of income inequality.

It is projected that the top one per cent of taxpayer units, who are those with annual income in excess of €297,400, will pay just over 23 per cent of total Income Tax and USC in 2025. This is a very large proportion of the total Income Tax and USC take from such a small cohort of taxpayers. In comparison, 80 per cent of taxpayer units, which is the cohort of income earners with annual income of less than €72,000 and account for about 2.79 million taxpayer units, will pay approximately 21 per cent of total Income Tax and USC.

I will conclude by noting that in 2016 my Department (with the ESRI) conducted a research project into the distribution of wealth in Ireland and the potential implications of a wealth tax. This study used the CSO’s 2013 Household Finance and Consumption Survey (HFCS) which provided information on the ownership and values of different types of assets and liabilities along with more general information on income, employment and household composition, at the time. There have been two further such surveys since then, one dated 2018, and the other 2020. Given the passage of time since this review, there may be merit in considering exploring options regarding an update of this work. I do not however have immediate plans to introduce another wealth tax in addition to those set out above.