Dáil Éireann Debate, Tuesday - 27 July 2021
347. Deputy Ged Nash asked the Minister for Finance the estimated yield from a 1% levy applied to wealth in excess of €1 million for a single adult, double that for a couple; his views on the contention in a recent report (details supplied) that such a levy on wealth would raise approximately €248 million for the Exchequer; and if he will make a statement on the matter. [39901/21]
View answerAt the outset the Deputy should note that wealth can be taxed in a variety of ways, some of which are already in place in Ireland. Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) are, in effect, taxes on wealth, in that they are levied on an individual or company on the disposal of an asset (CGT) or the acquisition of an asset through gift or inheritance (CAT). Deposit Interest Retention Tax (DIRT) is charged at 33%, with limited exemptions, on interest earned on deposit accounts. Local Property Tax (LPT) introduced in 2013 and recently amended is a tax based on the market value of residential properties.
In order to estimate the potential revenue from a wealth tax, it would first be necessary to identify the wealth held by individuals. I am informed by the Revenue Commissioners that they currently have no statistical basis for compiling estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared to the Revenue in a number of specific circumstances (for example, after a death), this information is not a complete measure of financial assets in the State, nor is it recorded in a manner that would allow analysis of the implications of an overarching wealth based tax. Therefore I cannot provide you with what the estimated yield from a 1% levy applied to wealth in excess of €1m for a single adult, or for a couple.
I note the recent ESRI report that the Deputy refers to which examines the issue of a wealth tax. What is clear from this report is that in order for a wealth tax to raise a significant amount of revenue it would have to contain few exemptions and apply from a relatively low level of wealth. For instance in order to raise the €248m referred to in the question there would be a need to include principal private residences, farms, businesses and pensions. This would therefore include a lot of illiquid assets which would be subject to annual taxation. The report also notes that the use of exemptions has the potential to create distortionary effects on how people save.
The Government has no plans to introduce a wealth tax, although all taxes and potential taxation options are of course constantly reviewed.
