The Revenue Commissioners cannot say whether anyone has ever paid the 80% ‘windfall’ tax on profits from property rezoning, and sales between 2010 and 2012, because its records cannot identify the relevant details.
The revelation is contained in a response to a parliamentary question submitted by Fianna Fáil Finance spokesperson Michael McGrath to Minister for Finance Michael Noonan.
The windfall tax rate of 80% was introduced in October 2009 and applied to the portion of the profit on a disposal of land which is attributable to a rezoning.
The Fianna Fáil spokesperson had asked the minister the number of persons who had paid to 80% windfall tax on gains from the disposal of development land, and the total yield from the tax to date.
Mr Noonan says that on the basis of Income Tax and Corporation Tax returns, there is no record of any profits or gains to which the windfall tax provisions would apply having been returned.
However, he notes that the Revenue Commissioners indicated that the existing database does not include details of capital gains returned via the CG1 tax return, as information from those returns is not readily available for analysis.
Consequently, if windfall profits have been returned using CG1 returns, it is not possible to identify the relevant details.
He said there was thus no reliable basis for providing the information requested by Mr McGrath.
Mr Noonan states that the windfall gains provisions were introduced primarily to discourage overheating of the property market by way of speculative transactions involving rezoned land rather than as a revenue raising measure.
He says that while the property sector has being showing significant signs of improvement in recent times, the windfall tax provisions have largely been in operation at a time of reduced activity in the property sector due to challenging economic and market conditions.
However, he says the operation of these provisions are being examined - in the same way as other relevant tax provisions - as part of the normal preparations for Budget 2015 and the consequent Finance Bill.
Michael McGrath called for the windfall tax to be reviewed, saying its continued existence was acting as a disincentive to development land which may even be zoned and services coming to market to boost housing supply.
He said that any tax that is so punitive that it prevents transactions is not appropriate.
Mr McGrath acknowledged that it was the Fianna Fáil/Green coalition that had introduced the tax in 2009.
However, he said that it was a direct response at the time to the collapse of the property sector to address the frenzy of speculation.
He accepted that tax should be paid on land disposals at at least the rate of Capital Gains Tax but if the windfall tax remained at a penal rate of 80%, no houses would be built to increase supply.
