asked the Minister for Finance if he will state (1) the yield from the residential property tax for each of the last two years; (2) his original forecasted yield; (3) the reasons for the discrepancy; and (4) whether he will consider abolishing this tax.
Ceisteanna—Questions. Oral Answers. - Residential Property Tax.
18.
The yield from residential property tax was £1.0 million in 1983 and £1.1 million in 1984.
The budget estimate for this tax in 1983 was £10 million but this was subsequently amended to £6 million at the time of the introduction of the relevant legislation in the Finance Bill, 1983. The budget estimate for this tax in 1984 was £3 million.
It was difficult originally to estimate the yield from the tax because of the lack of statistics on house values and family income. Many taxpayers withheld payment of the tax pending the Supreme Court judgment on the constitutionality of Part VI of the Finance Act, 1983, which relates to the tax. This judgment was delivered on 20 November 1984 and the Revenue Commissioners are now proceeding with the collection of the outstanding amounts.
Abolition of this tax is not being considered.
I presume the Minister will acknowledge that the figures he mentioned, £1 million and £1.1 million, are gross figures that do not take account of the collection costs of getting in this extraordinary amount of money?
Yes, but I am afraid I must tell the Deputy that his grass has been cut on this issue in that the matter of the cost of collection has been the subject of questions before and the cost of collection is nothing like as large as the Deputy is suggesting.
Will the Minister indicate the cost of collection so that we can subtract it from the enormous figures of £1 million and £1.1 million?
That is a separate question which has already been answered in the House. I refer the Deputy to the record of the House.
If the Minister tells the public through the House what the yield from these taxes is the least he should do is tell us what the net yield is rather than relying on the fact that the question has been answered before.
As I said previously in the House in answer to questions on that specific point, it is difficult, to say the least, to allocate specific collection costs to specific taxes, as the Deputy should know from his own experience in the office I now hold. The question has been dealt with before and is separate from the one that is before the House.
In the joint programme it was announced that the projection was £40 million but that original projection was reduced to £10 million and the Minister last year reduced it to £6 million. Does that not clearly indicate that the Government's expectations from the tax were grossly over estimated? The reality proves that the tax is a nonsense tax and that it would be in the national interest, in terms of revenue yield much less buoyancy in the building sector, to abolish this tax immediately. Is it not true that the Minister would get much more from stamp duty——
This is more relevant to a speech on the budget.
Will the Minister not consider clearly indicating that the tax has been a disastrous failure and that the Government should rely on enhanced stamp duty from increased sales of house property if the tax is abolished?
I would not consider doing anything of the kind. The Deputy is now indulging in dragging into this discussion red herrings that have no relevance whatever. As I said originally, it was difficult to estimate the yield from the tax because of the lack of statistics on house value and family income. In addition, in the period since the tax was originally introduced we have had two tests of the tax in court which in themselves have proved to be an obstacle to the collection of the tax. We are now proceeding to collect arrears of the tax in relation to the years for which returns were either not furnished by taxpayers or where payments were not made.