MINISTER FOR Finance Brian Lenihan is to introduce an amendment to the National Asset Management Agency (Nama) Bill to ensure “absolute clarity” on the provision for a tax on windfall gains arising from the rezoning of land.
The Bill seeks to impose a new 80 per cent Capital Gains Tax rate on a windfall gain relating to disposals and rezoning decisions on development land.
“I will introduce a further amendment in the Seanad this week to ensure absolute clarity on a subject that is very complex in terms of striking a balance between achieving its purpose and ensuring that it is not applied unfairly,” Mr Lenihan told the Seanad yesterday.
Outlining the amendments already made, he said: “I introduced a report stage amendment [in the Dáil] which provides for a future surcharge on the participating institutions in the event of Nama making a loss.
“While I do not expect Nama to make a loss, it is nevertheless appropriate to afford the taxpayer maximum protection against any possibility, however unlikely, that a loss may eventually arise.
“Any such protection must, however, be balanced against the risk that the application of a statutory surcharge could result in the participating institutions having to provide for a future liability in their accounts, in line with international accounting standards. The proposed amendment in the Bill strikes this balance.”
He had also introduced an amendment to provide the Minister for Finance with the power to issue guidelines to the participating institutions on lending practices and procedures to improve the flow of credit to small and medium enterprises and, if necessary, other sectors.
Mr Lenihan added that the Bill had also been amended to cap the amount to be spent by Nama on the acquisition of bank assets at €54 billion. “It is appropriate that a cap be placed on this amount so as not to potentially expose the taxpayer to an ever escalating amount of assets,” he said.
