Minister for Finance Brian Lenihan today said taxes were at their limits as he dampened speculation on the introduction of a property tax and abolition of house stamp duty.
Earlier this week, the Commission on Taxation unveiled more than 230 recommendations aimed at broadening the tax base without increasing the overall tax take. Among these were the introduction of a new property tax, leading to the abolition of stamp duty, and a carbon tax and domestic water charges.
Questioned on the possibility of property tax this afternoon, Mr Lenihan said the tax commission's proposals were a long-term plan for the reform of the tax system.
The Minster, speaking on RTÉ's News on One, said he was "very conscious" that "the burden of taxation in this country is high enough".
"We've increased it both in the last budget and in the supplementary budget in April. Income tax is at its limits. I've also made clear that we're committed as a Government . . . to introduce a carbon tax. We know that the various indirect taxes and the excise duties are at their limits when you look at the position of relative trade with Northern Ireland, so the scope for dramatic additional taxation in this budget is very, very limited - doesn't exist," he said.
"In relation to a a property tax, I think I've made it very clear that this would have to be thought out with great, great care. Large numbers of persons have bought property at the peak and paid substantial stamp duties, and there would be a fundamental issue in equity in saying to them at this stage that they should turn around and pay a property tax as well. This isn't going to be rushed into."
Mr Lenihan said the "very good work" done by the commission had to be analysed to see if it would improve the State's economic model "but the fundamental economic problem at present is that we are spending too much compared to what we are earning".
Asked what he would say to people thinking of deferring property purchases due to uncertainty over stamp duty, Mr Lenihan said the introduction of stamp duty was linked to the introduction of a property tax and that the latter tax was "a very complex proposal".
