THE FINAL report of the Commission on Taxation may be brought forward from September to late July or August to give the Government the option of earlier deliberation on the tax increases that will be necessary to control public finances.
A number of sources from different Government departments have separately said that there is now an expectation that the report will be published some weeks earlier than the early September deadline the commission has set itself.
This is because of the unprecedented scale of the economic crisis, both global and national.
The Government spokesman has also indicated that an earlier completion date would be welcomed.
Speaking this week, he said there has been no official contact between the Government and the 18-person commission, chaired by Frank Daly, the former chairman of the Revenue Commissioners.
However, the spokesman added: “A lot of people have said they would like to see a report earlier than the [scheduled] date.” An earlier reporting date could give the Government the option of framing the budget for 2010 – widely expected to contain new taxes – earlier than the traditional date in early December.
Last year, the budget was moved forward to October when the extent of the decline in exchequer revenues became apparent during the summer.
Sources in the Department of Finance said there would be a reluctance to engage in wholesale tax changes before the report is published. The sources added that an earlier publication date would make that task slightly easier for Government.
The commission was established in February 2008 and has set itself a time frame of 18 months to complete its work.
Its terms of reference include a commitment keep the overall tax burden low while increasing the fairness of the tax system.
It has also been asked to “ensure that our regulatory framework remains flexible, proportionate and up to date”.
However, the regulatory aspect of its terms may have changed in the light of the controversy surrounding the approach of the Financial Regulator to the banks.
Its third main term was to “introduce measures to further lower carbon emissions and to phase in on a revenue neutral basis appropriate fiscal measures including a carbon levy over the lifetime of the Government”.
Finally, it was asked to ensure that the 12.5 per cent rate of corporation tax would remain in place.
The commission split into four subgroups, each examining the major terms of reference. All four sub-groups completed their work in early 2009 and have reported back to the commission.
Simultaneously, the plenary group involving all members have continued working on the issues.
Three further subgroups have been established this year, all of which have yet to report back.
The volume of work is understood to be extensive and it is understood that the commission may find it difficult to report back to Minister for Finance Brian Lenihan earlier than September.
The Irish Times also understands that the subgroup examining the introduction of a carbon levy has suggested a tax will generally peg the price of CO2 emissions to those of carbon permits.
A Government source said that it was never an issue as to whether or not a carbon tax should be introduced.
“It’s about how best to introduce a levy. It should not be a surprise that there’s a carbon levy. The main thing is how it can be integrated with other tax reform,” said the source.
The other members of the commission are Tom Arnold, chief executive of Concern; Julie Burke, JMB Tax Solicitors; Micheál Collins, department of economics, Trinity College; Frank Convery, Heritage Trust, professor of environmental policy at UCD; Tom Donohue, partner in Russell Brennan Keane Chartered Accountants; Eoin Fahy, KBC Asset Management; Brendan Hayes, vice-president, Siptu; Colin Hunt, division director, Macquarie Capital Group; Sinéad Leech, director, Integral Finance and Technology Ltd; Con Lucey, chief economist, Irish Farmers’ Association; Danny McCoy, director, Ibec; Feargal O’Rourke, partner, PwC; Mary O’Sullivan, Irish Banking Federation; Mark Redmond, chief executive, Irish Taxation Institute; Willie Soffe, chairman, Dublin Transportation Office; Deirdre Somers, chief executive, Irish Stock Exchange; and Mary Walsh, chartered accountant.
