The report of the Commission on Taxation has recommended a range of new 'radical' taxes, which it says will keep Ireland as a low tax economy.
Read the Commission on Taxation's report in full here
The Commission says it does not advocate an overall increase in the levels of taxation, but rather a 'broader and less volatile base'.
The report urges the Government to focus on raising revenue through property taxes, spending taxes and income taxes - in that order.
The Commission says it had identified 245 tax relieving measures in the tax system.
The Commission says a property tax should be introduced as soon as possible, that water charges should be brought in on a phased basis and that a new three-rate income tax system replace the current dual income tax rates.
It proposes the introduction of an annual property tax on all residential property, excluding social and local authority housing. It proposes that the tax be introduced as soon as possible because this will provide stable revenue for the economy.
As a result, it proposes stamp duty on residential property to be phased out but that stamp duty should continue on investor related purchases.
Examples in the Commission's report envisage a charge for property in the €150,000-300,000 range at between €563 and €675 depending on the rate applied. The tax would be based on the current market rate and would be self-assessed.
The report also recommends addition capital tax gains tax should apply on windfall gains from property rezoning.
The annual property tax needs to be based on value of property and so the Commission recommends that an up-to-date valuation be put in place.
Child benefit should be seen as taxable income
The Commission also recommends that child benefit should be viewed as a taxable income - and either taxed or means tested. It adds that a tax credit be introduced to offset the increase in tax for low income earners.
However it says the taxing of child benefit should be benchmarked against alternatives, including means testing, 'to ascertain the most effective method of achieving the aims and objectives of the child benefit programme.'
Separately, the Commission recommends that foster care payments should be made exempt from income tax.
Tax credits for one-parent families, home carers and widowed parents are set to continue, while capital allowances for childcare facilities should be discontinued, according to the report.
It also suggests that employer-provided childcare to be subject to benefit-in-kind tax.
It also recommends that the health levy be abolished and integrated into the income tax system when fiscal conditions improve.
The Commission suggests that rules on residency and tax exemption need to be strengthened and it adds that the current 'Cinderella clause' needs to be supplemented with additional tests and criteria.
The Commission recommends that domestic water charges should commence without undue delay. A carbon tax based in tonnes of carbon should be introduced and collected at earliest point of supply.
The first €200,000 of pension pension lump sums should be tax free with the remainder taxed at standard rate. It also suggests replacing tax relief for pension payments with a scheme 'along the lines of the former SSIA scheme", where the Exchequer pays €1 for each €1.60 paid by the tax payer.
The commission also recommends that the country's low corporate rate tax of 12.5% should remain in place to support economic activity long term.
New three-rate income tax system on the cards?
It would like to see the introduction of a new three-rate income tax system to replace the current high and low income tax rates. It says the three rate structure has merit but should have regard to keeping taxation on labour low, and on keeping marginal rates competitive.
The commission says the present arrangements for married, one-earner and married, two-earner couples should remain in place.
Other measures include the phasing out of stamp duty on ATM, credit and debit cards in the interest of promoting a cash free society. It also wants stamp duty on share transactions abolished.
The removal of tax relief for nursing home expenses once the Fair Deal scheme ends is also proposed as well as the replacement of VRT over ten years by a system based on car usage.
The Commission would like to see tax relief for pension payments to be replaced with a scheme 'along the lines of the former SSIA scheme', while the first €200,000 of pension lump sums should be tax-free with remainder taxed at standard rate.
Today's report proposes an end to the artists' tax exemption.
It says that expenses of Oireachtas members should also be treated as the same way as expenses paid to all other employees, with a limit placed on the dual abode allowance and an end to the flat rate of relief for accommodation.
It also calls for an end to stock relief for farming businesses but continued relief on farm land leasing and says that income tax relief for trade union subscriptions should be ended.
Moves will make country less vulnerable to shocks
The Commission says its proposals have the general character of making Ireland less vulnerable to economic shocks, encouraging enterprise and innovation, ensuring sustainable water supply and waste treatment, meeting the country's responsibilities on climate change, supporting local government, encouraging provision for retirement and improving the fairness of the tax system.
It also recommended that the country's tax system be examined at more regular intervals in the future. Before today's report, the system had not been examined in detail for 25 years.
The Commission on Taxation chairman Frank Daly said the recommendations would not damage economic growth.
He stressed that all recommendations were designed to spread the burden of taxation more evenly and to give the Government more certainty about its tax revenue.
Finance Minister Brian Lenihan said the measures would play a role in stabilising the public finances, but that they would take several years to implement in full.
