Increasing the excise tax on diesel for consumer and commercial vehicle drivers, scrapping the eco-diesel concession for farmers and sharply increasing property taxes are among the controversial recommendations put forward by a group of government experts.
The Commission on Taxation and Welfare has also recommended increasing PRSI payments by the self-employed.
And Treasury Secretary Paschal Donohoe has said there should be a levy on holiday homes, a congestion charge and a higher excise duty on heating oil.
The recommendations to the government after a year-long review of tax policy will be highly controversial at a time of rising fuel prices.
The broad commission wants an end to all fuel subsidies.
And the tax on fuels should be based on the level of emissions they produce.
But it envisages that any changes it recommends will be implemented over several years, with most changes not taking effect until the 2030s.
One of the most unpopular recommended measures is for farmers to stop using green diesel for a period of time.
Farmers get a cheaper lower excise rate on their diesel, but the energy crisis has meant that the green diesel tax has been cut further to help farmers.
The Commission believes that fuels should be taxed based on the carbon they allow.
Heating oil is recommended for higher excise duties.
The price has doubled in the last year and the excise duty has not been reduced despite the excise duty cuts on diesel and petrol.
Currently diesel is subject to lower excise duties than petrol, but the Commission recommends that it should be subject to the same tax as petrol. This will not go down well in rural Ireland.
City dwellers would be charged a congestion charge for driving in built-up areas if the proposals were amended.
Property taxes should rise to meet future pensions and the health needs of an aging population, the commission recommends.
And the property tax on holiday homes should be increased to boost public finances, the experts say.
The group wants second homes to be subject to a ‘surcharge’ on the local property tax (LPT).
As of April census night, there were 66,135 unoccupied homes, so any move to adopt this proposal would impact a large number of homeowners.
And there must be a land value tax to discourage landowners from hoarding land that could be developed for housing, the body recommends.
A source said: “There will be no sharp shaking. It’s more about the direction we’re going in than immediate changes.”
The idea is that as taxes on carbon products decrease, as we move towards net-zero emissions, the gap will be filled with higher property taxes, higher PRSI and a site value tax.
The report, which was sent to Treasury Secretary Paschal Donohoe, contains around 100 recommendations.
It will not be part of the 2023 budget next month.
Instead, the 300-page report will guide conversations about how taxes will be raised to meet the future costs of an aging society.
The cabinet is to discuss the recommendations in the coming weeks.
The Commission is chaired by Professor Niamh Moloney, Professor of Law at the London School of Economics.
https://www.independent.ie/irish-news/paschal-donohoe-told-to-raise-duty-on-diesel-axe-the-farming-fuel-subsidy-and-hike-the-local-property-tax-41945926.html Paschal Donohoe said he should increase the diesel tax, cut farm fuel subsidies and increase local property taxes