Tuesday, 29 September 2020

Ceisteanna (66)

Paul Murphy


66. Deputy Paul Murphy asked the Minister for Finance if he will consider introducing a wealth tax in budget 2021. [26790/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

It should be noted that Ireland already taxes wealth in a variety of ways, such as our Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) which are levied on an individual or company on the disposal of an asset in the case of CGT, or the acquisition of an asset through gift or inheritance, in the case of CAT.

The Local Property Tax, which was introduced in 2013, is a tax based on the market value of residential properties, and can also be categorised as a form of tax on wealth. 

It is also important to understand where Ireland stands in relation to the distribution of wealth. In 2013, the Central Statistics Office conducted the Household Finance and Consumption Survey (HFCS) providing the first comprehensive data on household wealth in Ireland. The survey provides information on the ownership and values of different types of assets and liabilities along with more general information on income, employment and household composition. The data indicated that wealth inequality in Ireland for 2013, as measured by the Gini Coefficient, was lower than the euro area average.

The Central Bank recently published a research report presenting results from the 2018 HFCS which highlights the improved financial position and resilience of households prior to the COVID-19 crisis.

The Central Bank's new report 'Household wealth: what is it, who has it and why it matters' shows that Irish household net wealth grew by over €76,000 for the median household between 2013 and 2018, and that wealth inequality here for 2018, as measured by the Gini Coefficient, remains lower than the euro area average It also notes that "the data highlight the improved financial position and resilience of households".

The report highlights that a significant portion of wealth for most households was tied up in the family home,  and that increases in house prices (74% increase for the period) was a major factor in the reported increase in household wealth.   

My officials continue to examine all issues related to taxation, including wealth taxation, on an on-going basis, and they and I will monitor and consider any additional information and data that comes to light. I do not, however, have any plans to introduce a tax measure along the lines of that sought by the Deputy at this time.

Question No. 67 answered with Question No. 45.