BUSINESS OPINION:WELCOME, THEN, to the new Commission on Taxation. The appointment of the 18-member body by the Tánaiste last month has not been met with unfettered joy in all quarters, writes John McManus
Quite the contrary, with various vested interests claiming that the other vested interests are over-represented. The social partners claim that business interests dominate the new body, with at least eight if not 10 of its members being involved in companies or organisations that generally see new tax laws as opportunities to dream up lucrative schemes to benefit themselves and their clients.
As they point out, the commission includes three accountants, a tax lawyer and the head of the Irish Taxation Institute. They would also take exception to the appointment of a representative of the asset management business, Eoin Fahey of KBC, and the private equity industry, Colin Hunt of Macquarie Capital, to the commission. And that is before we mention Deirdre Somers, head of the stock exchange, and Mary O'Sullivan of the Irish Banker's Federation.
Ranged against them are an equally eclectic mixture of the great and good of the social pillar. They include Tom Arnold of Concern and Brendan Hayes of Siptu. On the face of it, both sides seem evenly matched, although bodies such as Ictu are grumbling that they did not get to nominate a member, and instead had one chosen for them by the Tánaiste.
Astride this colossus sits Frank Daly, outgoing head of the Revenue Commissioners, who will have an interesting time moderating 18-way discussions on tax. His appointment as chairman has not gone unremarked upon, with some querying why you would appoint the former head of AIB to lead a commission on banking.
The general level of dissatisfaction with the composition of the committee should be reassuring. It suggests the Tánaiste has got the mix right and that they will start pumping out useful suggestions on issues such as the introduction of carbon taxes with no unnecessary delay.
But the other way of looking at the issue of who is on the commission is that it really does not matter very much, because - if the last one was anything to go by - they are simply the place that innovative tax policy ideas go to die.
The last commission sat from 1980 to 1985 and produced no less than five reports. They looked at all the tax issues of the day including direct tax, tax incentives, special taxation and administration. Each report contained numerous recommendations and suggested timetables for their implementation. They were almost completely ignored.
A 1993 study by Trinity academic Francis O'Toole and published by the Statistical and Social Inquiry Society found that, some 10 years after the publication of the first report, its recommendations still awaited substantial implementation.
There were a number of exceptions and some of the commission recommendations became policy, the best example being the move towards self-assessment, which had been opposed by the Revenue.
Members of the commission from the time put the success of that proposal - compared to the many others that lay gathering dust - down to the fact that it chimed with the belief in government at the time that the Revenue had dropped the ball somewhat in terms of collecting personal taxes. It gave the government support for something that it was of a mind to do anyway.
And even the 1993 study concluded that "steady, but somewhat slow, progress has been made in implementing some of the commission's major proposals in spirit, if not in letter".
But they left open the question as to whether these belated changes came about because of other factors, such as inflation or international competition, rather than the Government finally getting around to implementing the recommendations of the commission because they thought they were a good idea.
Perhaps the best thing that can be said of the previous commission on taxation was that it helped pave the way for some of the tax reforms of the last 15 years. And that was not without some value.
