Quarter review 5689

First a charge, now a tax

Hundreds of thousands of Irish homeowners have yet to register to pay the €100 household charge mandated by the government.

But if many people are unhappy with the charge, they are likely to be even less happy with a new property tax that will come into force in 2013.

Minister of Finance Michael Noonan has thus far declined to reveal his preference on how the new tax on property tax should be calculated, the Irish Times reported this week.

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Speaking in Limerick on Monday, Minister Noonan said the new tax will be introduced next year, as required under the terms of Ireland's agreement with the EU-IMF troika.

He would not comment on speculation the tax would be value-based but said the Revenue Commissioners would have responsibility for collecting it due to difficulties experienced in collecting the household charge.

According to Department of the Environment figures, about 600,000 homeowners out of the estimated 1.6 million in the State have yet to register to pay the €100 household charge, the Times report stated.

"The detail of the property tax has to be worked out. All that has been decided is that there will be a property tax on family homes and that property tax will be collected by the Revenue Commissioners," said Mr. Noonan.

"Of course I have a preference and I'll be stating it at cabinet," he added.

The minister described the property tax as a budgetary matter and warned that Budget 2013 - which will be unveiled before Christmas - will include tax increases and cuts to services.

"We are still as a country spending a lot more than we collect in taxation and there's only two possible ways of closing the gap. One is to cut what we spend and the other is to increase taxes.

"It's very hard on people. There's no doubt that people are paying the price of what happened at the peak of the Celtic Tiger," Noon said.

"I'm not making light of it. The issues are very serious and the burden being put on our fellow citizens is a very serious burden and they are having tough times.

"All I can say is if we stick with it we are going to work our way through it. If we give up half way across the river we will have all the pain and we won't have the solution either."