I apologise on behalf of my colleague, the Minister for Finance, Deputy Noonan, who, unfortunately has to attend an urgent meeting in Brussels.
I thank the Senator for raising this issue in Seanad Éireann. The appointment of a commission on taxation by any Government is a major undertaking which often takes several years to report. Commissions of taxation tend to focus on the medium term to long term as regards the appropriate development of the tax system and since it tends to take many years to implement all of their recommendations, they are, as often as not, a once in a generation event. The last Commission on Taxation was in place in 2008 and 2009, with the one prior to that having been in place between 1980 and 1985. Given that a commission on taxation has reported as recently as 2009, it is not clear what exactly would be gained by undertaking such a large-scale task again so soon.
It should be noted that, since the last Commission on Taxation reported, the Department of Finance has made major strides in improving the evidence base available to it to inform taxation policy. For example, a major review of the corporation tax system was undertaken by the Department in 2014, with the extensive range of analyses and outputs published with budget 2015. The purpose of the research was to quantify the effect of the three elements underpinning Ireland’s corporation tax policy - rate, regime and reputation.
Building on this successful review, in early 2015 the Department entered into a research partnership with the Economic and Social Research Institute. This agreement covers research in the areas of macroeconomics and taxation policy. As well as extensive analysis of the potential effects of Brexit on the economy, a significant volume of taxation-related research has been undertaken under the programme, including on important issues such as the relationship between corporation tax rates and foreign direct investment and the volatility of tax revenues. All of the research is published and available to inform the wider tax policy debate.
On the local property tax, LPT, the 2012 report of the interdepartmental group on the design of a local property tax, the Thornhill group, considered the structures and modalities for a full property tax which was subsequently introduced in 2013. The Minister for Finance commissioned a review of the local property tax in 2015 to consider its operation and, in particular, any impact on LPT liabilities due to recent property price developments.
The review was informed by the outcomes of a public consultation process which received over 50 written submissions.
Senators will be aware also that the Government’s commitment to continue the process of unwinding USC is not a measure that is being considered in isolation but as part of a wider medium-term income tax reform plan. In July 2016 he Department of Finance published a detailed review of the policy considerations relevant to this reform, including the necessity to maintain the breadth of the income tax base and retain appropriate levels of taxation for higher earners.
A detailed review of agri-taxation was published by the Department of Finance in October 2014. The following year, an independent review of marine taxation was also undertaken, resulting in the Government bringing forward changes to the tax code prompted by the reviews.
The last Commission on Taxation undertook a major review of tax expenditures. Again, the Department of Finance built on this work and subsequently developed a framework for the evaluation of tax expenditures, as set out in the report on tax expenditures published with the budget in 2015. From time to time, the Department carries out reviews of existing tax expenditures and ex ante evaluations of proposed new tax incentives, with the various reviews and evaluations being published in the annual report on tax expenditure.
