Republican News · Thursday 30 January 2003

Taxing issues

CORI accuses coalition of dodging responsibilities

BY ROBBIE SMYTH

So Bertie made it back from his new year trips to sunnier climes and kicked off the new term in Leinster House intent, it seems, on another year of backtracking and finding new ways not to shoulder the blame for various failures in health, housing, education, transport etc. It's a long list.

However, one common theme permeates the entire government policy. They have enforced a battery of spending cutbacks justified on the basis that they just don't have the money.

We all know that they squandered the boom years' tax revenue on tax cuts for the rich and badly costed projects that ate into the surplus millions, but what about now? Last December, figures from the NESC showed that the Dublin government was foregoing over §9.8 billion in taxes through the range of reliefs and allowances on offer to those with large amounts of disposable income.

Then, after yet another budget without any reform of these tax reliefs, a study from the Revenue Commissioners showed that 12% of top earners were paying effective tax rates of less than 5%.

This year, it seems that it's business as usual, with tax inequalities still permeating Irish society. In the last weeks, a damning report from the Conference of Religious in Ireland, 40,000 new potential tax evaders found, and another tax loophole in the news show that not just has nothing changed but also the money to fund the vital social investment needed in the 26 Counties is being needlessly squandered.

A new report from the Justice Commission of the Conference of Religious in Ireland (CORI) has highlighted how little tax is collected here compared to other European states. The CORI report found that though the wealth being created in the 26 Counties is considerably above the EU average, our spending on healthcare, education and social welfare is well below the EU average. Less tax is collected as a percentage of economic activity in the 26 Counties compared to any other EU state.

CORI has challenged the Dublin government to "spell out in detail how it intends to honour the commitments it has already made on poverty and social exclusion". CORI has accused the coalition of dodging the question and believes the government has no intention of tackling the tax imbalances highlighted in the CORI report.

Where the government can act is on tax evasion and a Revenue Commissioners' investigation has identified 40,000 new suspected tax dodgers. It is believed that the investigation could yield another §160 million for the state coffers. How many Accident & Emergency wards could that keep open?

Where the government has taken one bit of belated action is on closing a single solitary tax loophole. A media report that AIB was to sell its headquarters in Dublin's Financial Services Centre and that tax reliefs associated with the building could have allowed the new owners tax breaks of up to §26 million prompted Finance Minister Charlie McCreevy to shut down the reliefs associated with this type of property transaction.

McCreevy said: "It's quite legal but I enjoy closing them down." It seems that he could do a lot of good this spring by acting on this conviction. Now that would be surprising.