A SITE valuation tax, generally regarded as a precursor to a property tax, will be contained in the fothcoming Finance Bill, Minister for Finance Brian Lenihan has confirmed.
The Bill, due for publication on January 20th, will implement the Budget measures and contain proposed legislation to introduce a fixed household charge of €100 per annum in 2012.
A “value-based addition” will be introduced in 2013, Mr Lenihan said in response to a parliamentary question from the Labour Party’s finance spokeswoman, Joan Burton.
“Initial consultation on the implications of a recurrent annual tax on property has taken place with relevant stakeholders. Work is currently under way in preparation for relevant legislation to be published in Finance Bill 2011,” he said.
Mr Lenihan has been lobbied by Fianna Fáil backbenchers, including Michael Ahern (Cork South Central) and Chris Andrews (Dublin South East), to reverse Budget changes in relation to properties bought with Section 23 tax relief. The backbenchers say small-time investors, rather than large-scale speculators, are facing unanticipated tax bills and could go bankrupt.
Mr Andrews said “guards, teachers, and electricians” would be affected. “These aren’t the big guys,” he said.
Mr Andrews, Mr McGrath, who is chairman of the Oireachtas Finance Committee, and others have expressed confidence the Bill will contain an amendment when it is published next week.
A spokesman for the Department of Finance confirmed a large number of submissions had been received by Mr Lenihan. “I’m aware significant representations have been made in relation to Section 23,” he said. He said he was not aware whether amendments would be contained in the Bill.
Meanwhile, it has emerged almost 40 per cent of directors working at financial institutions when the Government’s bank guarantee scheme was introduced in September 2008 remain in their positions.
“Based on information supplied to me by the six covered institutions, 28 directors representing 38 per cent of those who were in office pre the introduction of the Government guarantee are still in situ,” Mr Lenihan confirmed.
He was responding to another parliamentary question from Ms Burton, who also asked him to name the directors. Mr Lenihan said: “I do not propose to list the names of those directors”. He added that 46 directors had left their positions since that time.
Mr Lenihan has also confirmed he will consider a “surtax” on bankers’ bonuses in the Finance Bill. Ms Burton asked for “the reason the obligations in respect of these bonuses was not either reviewed or made subject to emergency financial measures in the public interest in the form of a surtax or a ‘de minimis’ rule, whereby bonuses would be taxed at a minimum effective rate of circa 80 per cent”.
The Minister responded: “The question of a surtax is one which I will consider in the context of the forthcoming Finance Bill.”
The Government’s timetable for the passage of the Finance Bill through the Oireachtas has been circulated. The timetable means the holding of a general election in late March now looks virtually certain, with Friday, March 25th now considered a likely date.
Following its publication on Thursday next week, the Bill is intended to pass second stage the following week. A two-week period has been allocated for committee stage, with report stage a week later and completion of the Bill in the Seanad due by February 25th.