Dáil Éireann Debate, Tuesday - 7 October 2014
163. Deputy Thomas P. Broughan asked the Minister for Finance if his Department has reviewed the working paper by an organisation (details supplied) in relation to the introduction of a wealth tax; his views on the estimated yield which could be achieved from the imposition of a wealth tax as proposed in the working paper. [37910/14]
Amharc ar fhreagraAs the Deputy is aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that may or may not be the subject of Budget decisions.
The paper to which the Deputy refers, did not advocate a specific form of wealth tax but analysed a number of options and discussed issues relating to the introduction of a wealth tax. While it concluded that there was a strong case for broadening the tax base to include an annual wealth tax, it also noted that there was no consensus in academic literature about the value of wealth taxes.
The paper suggested that a yield of 0.1% of GDP which would be in the region of €160 million was attainable from an annual wealth tax where the net wealth threshold of liability is set at €1 million and the tax rate is set at 0.6%. However, as I have stated in reply to a number of Parliamentary Questions in the past, in order to estimate the potential revenue from a tax on wealth, one would need to identify the wealth held by individuals, which is not possible from the data available at present.
It should also be noted that wealth can be taxed in a variety of ways, some of which already exist 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). However, they are not annual taxes on an individual's wealth. Deposit Interest Retention Tax (DIRT) is charged at 41%, with limited exemptions, on interest earned on deposit accounts. Local Property Tax (LPT) introduced in 2013 is a tax based on the market value of residential properties. The Domicile Levy introduced in Budget 2010 also constitutes a form of wealth tax. The combined yield of these taxes considerably exceeds, on an annual basis, that of the measures considered in the Report.
