Irish Chambers Of Commerce Confront Cowen On Property Tax
by Jason Gorringe, Tax-News.com, London
12 November 2004

The Chambers of Commerce of Ireland has accused Finance Minister Brian Cowen of avoiding a debate on the introduction of a property tax to help business shoulder the burden of growing local authority expenditures.

Speaking recently at a conference on local authority financing, CCI Chief Executive John Dunne told delegates that Cowen’s rejection of a recommendation by the IMF that tax breaks for property owners should be abolished and second homes should be taxed at higher rates was not entirely justified.

“While we share some of the Minister’s concerns on the IMF proposal we fear that he is deliberately avoiding real debate on the issue by constantly referring to the failed residential property tax as the only possible approach to property taxation,” stated Mt Dunne.

In its pre-budget submission, CCI has proposed the introduction of a site-value tax on all property with the exception of principal private dwellings.

The Chamber suggests that the tax could be offset by the abolition of stamp duty on the first €250,000 of the cost of the house, and a reduction in the standard rate of VAT from 21% to 17.5%.

“I estimate that in 2010 local authorities will need to raise almost €4bn from business to cover expenditure – a figure that is plainly unsustainable,” warned Mr Dunne.

“Therefore, some form of local authority tax is absolutely vital at this stage and CCI believes that a site-value tax would be the most efficient and effective solution,” he concluded.

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