Pearse Doherty
Question:17. Deputy Pearse Doherty asked the Minister for Finance if he regrets rushing through the Local Property Tax Act in view of the problems that have become evident in the legislation. [49197/13]
View answerWednesday, 20 November 2013
Questions (17)
Written answers
The Local Property Tax (LPT) was required to be introduced before the end of 2012 due to our Troika commitments, which meant it had to be passed by the Oireachtas before the end of the year. The introduction of the LPT was the largest extension of the self-assessment system in its history and represents a very great legislative, logistical and administrative challenge for all concerned. Any charge to tax has to be legislated for, and the legislation has to be in place in good time to give clarity and certainty to taxpayers and to allow for an effective administrative system to be put in place. The task was given to the Revenue Commissioners because the Government decided that, as the body with experience in administering a wide range of taxes, Revenue was best placed to ensure that the tax was introduced successfully in a short timeframe.
Although the tax was not payable until 1 July 2013, lead-in time was required to enable Revenue to develop new systems and processes, to enable taxpayers to file returns in good time and to select a payment method which suited their circumstances, and to enable phased payments to be implemented in time for a July 2013 start. The Government was anxious to ensure that taxpayers had the widest possible range of payment options, including phased payments, to assist them in meeting their LPT obligations. Stakeholders such as Government Departments, employers and payroll software companies who have a role in operating phased payments also needed certainty to develop their IT systems.
Since the State had no comprehensive register of residential properties, it was an absolute pre-requisite that legislation was in place early to ensure that Revenue could properly obtain data from various organisations including the Local Government Management Agency, utility companies, the Property Registration Authority and various Government departments
Once the legislation was in place, Revenue was able to begin in earnest the very important task of informing the public about LPT early in 2013, by explaining how the tax would operate and how it would impact on the various property owner types.
It was always a possibility that there would be some issues needing correction, and at the time of the introduction of the initial legislation I stated that I would take on board suggestions I heard during debates. The Finance (Local Property Tax) (Amendment) Act 2013 was enacted in early 2013 which incorporated a number of changes suggested by Deputies and Senators, as well as issues which officials of Revenue and my Department advised me of. These included more favourable treatment for certain disabled persons, for properties badly damaged by pyrite and for certain properties owned by charities, local authorities and social housing providers. Deferral of LPT was provided for additional categories of property owners – personal representatives of deceased persons, those covered by a formal insolvency arrangement and those suffering excessive financial hardship. In addition, the power of Revenue to enter on a person’s property was clarified
I feel the Amendment Bill gave Oireachtas Members time and opportunity to suggest changes to the legislation.
As the Deputy is fully aware, drafting errors in legislation do happen from time to time. In the case of the exemption which was intended only to benefit first time buyers who purchased in 2013, this error, although unintended, is beneficial to a clearly definable group of taxpayers which Revenue will be able to identify. When the error was made known to me, I decided to allow non-first time buyers to avail of the exemption, as I considered that the cost is not likely to be significant as part of the overall yield, and could provide an additional boost to the property market.
I do not believe that the legislation was unjustifiably rushed, and I am satisfied that, where issues have arisen, these can be taken care of administratively, in a cost effective manner, and in the main without the need for further legislation. Overall, I am satisfied that having the primary legislation in place as early as possible was a key factor in the successful implementation of the tax which the general public has responded to, and continues to respond to, with a remarkably high level of voluntary compliance.