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Programme for Government

Dáil Éireann Debate, Tuesday - 7 July 2020

Tuesday, 7 July 2020

Ceisteanna (210)

Gerald Nash

Ceist:

210. Deputy Ged Nash asked the Minister for Finance his views on a recent European Commission report (details supplied); his views on whether the programme for Government reflects the recommendation of the European Commission; and if he will make a statement on the matter. [14606/20]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy will be aware, I am supportive and have repeatedly spoken on the need to broaden the tax base. A number of measures have been taken in this regard in recent years and include the introduction of the Universal Social Charge, the Local Property Tax and the Sugar Sweetened Drinks Tax. More recently changes to the VAT rate and carbon tax changes were introduced to broaden the tax base and to counteract the effect of negative externalities. In addition, I have also taken steps to broaden and enhance the stability of our corporation tax base, including through the introduction of the 80 per cent cap on capital allowances for intangible assets in Budget 2018 and the introduction of a broader Exit Tax regime in Budget 2019.

The Programme for Government recognises that we need to remain cognisant of avoiding the mistakes of the past and being overly reliant on a narrow set of taxes. The carbon tax is set to increase throughout the lifetime of this government with an annual increase of €7.50 per annum to 2029 and €6.50 in 2030. To the extent that taxation measures are required to close the deficit in the medium term, the Programme for Government notes that we will focus any tax measures on behaviour with negative externalities such as carbon tax, sugar tax and plastics. This can be seen as a further step in broadening the tax base.

More generally in relation to the automatic stabilisers, as the Deputy is aware, these refer to the counter-cyclical support that the public finances automatically provide to the economy through spending and taxation channels - for example through higher social protection payments, and on the revenue side, lower tax collections in economic downturns. These stabilisers help to smooth the economic cycle. It is imperative that we allow these mechanisms to work and this will be facilitated by measures to broaden the tax base such as those outlined. This will make our economy more resilient to cyclical fluctuations and shocks.

Question No. 211 answered with Question No. 205.
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