Dáil Éireann Debate, Thursday - 14 February 2013
121. Deputy Brendan Griffin asked the Minister for Finance if he will explore the option of a reduction in capital gains tax which in turn may result in a increase in activity in this sector; and if he will make a statement on the matter. [7777/13]
View answerCapital gains tax (CGT) is a transaction tax and a liability can only arise following a transaction giving rise to a chargeable gain. Where there is no transaction, there is no tax. Lowering the rate does not guarantee an increase in the number of transactions. The drop in the CGT yield over recent years can be attributed to declining asset values and a reduction in the number of property and share transactions. In order to protect and enhance the yield it was necessary to increase the CGT rate in Budget and Finance Bill 2013 to 33%. As well as required reductions in expenditure to reduce our budget deficit, some increases in taxation are also necessary. Increasing tax on capital is less damaging for the economy than increasing taxes on income. I do not propose to reduce the rate of CGT for the reasons outlined.
