Lenihan receives taxation report

Minister for Finance Brian Lenihan was formally presented today with the Commission on Taxation's report, which contains more…

Minister for Finance Brian Lenihan was formally presented today with the Commission on Taxation's report, which contains more than 250 recommendations.

The recommendations of the 17-member commission's report include the introduction of taxes on both property and carbon.

The report will not be made public until next month. It is understood the reason is that the index for its 600-plus pages is incomplete.

According to sources familiar with the report, another significant feature is that it recommends the Government puts transition arrangements in place to facilitate the introduction of some of the more far-reaching measures.

Some of the new tax measures will take some time before they can be enacted. There were concerns expressed by some commission members that, in anticipation of such measures, people would be reluctant to enter a particular market, preferring to wait until the new tax became law.

The report therefore recommends transition taxes should be put in place to prevent a situation of stasis arising. It is not known for what length the transition would last or for which specific tax. However, it is believed that the arrangements refer mainly to the recommendations on property taxes.

The commission was established 19 months ago to examine all aspects of the taxation system.

Its brief was to keep the overall tax burden low, including retaining the 12.5 per cent corporation tax. It was also asked to propose measures to further lower carbon emissions on a revenue-neutral basis.

Earlier this year, following contact with Mr Lenihan, the commission agreed to complete its work earlier than its deadline, which was originally set for September 20th.

An earlier draft of the report, which nonetheless contains its main recommendations, was reported widely in the media over the weekend. A recommendation to abolish vehicle registration tax (VRT) and replace it with congestion charges or increased petrol prices may prove controversial.

One of the key budgetary changes since the Green Party entered government has been the introduction of VRT charges based on carbon dioxide emissions.