Ireland’s Minister of Finance Brian Cowen confirmed last week that the government has launched a review of certain reliefs and incentives offered through Ireland’s taxation system.
As a result, the Department of Finance has appointed external consultants to review the system of reliefs, and will work with the Revenue Commissioners to explore tax incentives involving urban and rural renewal, multi-storey car parks, student accommodation, private hospitals, nursing homes, hotels and childcare facilities
The issue of tax reliefs became a controversial subject for the government last year when the Labour Party spokeswoman for finance, Joan Burton, claimed that the Revenue Commission had paid out more than EUR8 billion in tax relief on 28 schemes. She also revealed that a figure could not be put on the cost of an additional 33 tax reliefs.
Cowen also indicated his intention to assess whether measures can be introduced to prevent higher earners reducing their tax bills through various reliefs and deductions in the tax system.
The review was welcomed by Ireland’s Institute of Chartered Accountants, whose President, Terence O’Rourke, commented:
“There has been a huge amount of discussion about the cost of tax reliefs and their impact in recent months, not all of it particularly well informed.”
However, Mr O’Rourke added: “From a public policy perspective, we need a full assessment of the costs and benefits that such schemes bring to our economy.”
Nevertheless, he pointed out that the much-debated tax reliefs exist to legitimately reduce the tax bills of those who invest.
“While there has been considerable and understandable debate about recent figures in respect of high earners released by the Revenue Commissioners, it is important to remember that the individuals involved are acting within the system and investing in schemes in accordance with policy objectives set out by the Oireachtas,” observed Mr O’Rourke.
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