Ministers have played down sweeping tax increases proposed for households by the Commission on Taxation as difficult, challenging and, in some cases, unlikely to ever happen.
The expert group, set up to advise the Government on future tax changes to fund the cost of an ageing population, proposed “substantially increased” land and property taxes, VAT hikes, road use and congestion charges, increased PRSI and an end to tax relief on private health insurance policies.
Minister for Finance Paschal Donohoe said the Government would give “serious consideration” to the proposals, but said they were “difficult and challenging”, came “at a challenging time for many economically” and would not be acted on in this month’s budget.
Tánaiste Leo Varadkar said the commission had done some “really good work” but stressed that it was an independent report and “not Government policy”.
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There were “some things in it that I absolutely agree with,” he said, but added that there were “other things that, quite frankly, are straight out of the Sinn Féin manifesto”.
Sources on the commission told The Irish Times they were taken aback at his comments.
[ The Irish Times view: an agenda for after the crisisOpens in new window ]
Mr Varadkar said there was “no way” proposals to increase inheritance tax or increasing tax on people’s savings were going to happen while Fine Gael was in government. He added that the commission’s proposals were a “mixed bag of things that I agree with and things that simply won’t happen, certainly not under this Government”.
One source said commission members were “disappointed to see their independent work politicised in this way by the Government that set it up”. Another said members were “stunned” by the Tánaiste’s comments.
Commission chair Prof Niamh Moloney said the 500-page report, containing 116 recommendations, was “not a political statement” but a reflection of the need to raise taxes in the medium to long term for the ageing population.
“This is absolutely not the big bang of reforms that needs to be done in this budgetary cycle, over the next year. We are acutely conscious of where we are in terms of cost of living,” she said.
There was dissent to the proposals even among the commission members.
Businesswoman Rena Maycock refused to sign off on a proposal to raise PRSI for self-employed people, saying she “couldn’t sign up to” a recommendation that did not account for risks taken by businesspeople in creating employment for themselves and others.
Trade union-nominated member Dr Tom McDonnell objected to a proposal to support low taxes for businesses and higher earners, saying that he endorsed the majority of the report but felt that the balance was “unfairly skewed in favour of enterprise over the rest of society”.
