Government balks at removal of property-based tax reliefs
In a news dump that would impress Andy Coulson, the government clearly put the word around yesterday that it would not be implementing the abolition of the so-called “Section 23″ property tax reliefs and this is confirmed in the Friday afternoon release of the Finance Bill, which was already overdue. Specifically, according to the Minister’s statement –
The provisions on the property-related tax expenditures, as announced in the Budget, are fully contained in the Bill (Sections 22 and 23), but the Government has decided that they will now be subject to a commencement provision which may only take effect in the next tax year following the preparation and publication of an economic impact assessment on the proposed changes. The intention to carry out an impact assessment was announced on Budget day. In light of the wide range of concerns that has been expressed regarding the potential effects of the changes on the real economy, and on employment in particular, the Government decided that such an assessment should be undertaken in advance of the commencement of the provisions
So was the impact assessment announced on budget day?
It’s not in the Minister’s speech. In fact, anyone listening to the speech would have gotten the impression that abolition was immediate –
The National Recovery Plan contains a commitment to the abolition or the curtailment of tax expenditures and to the phased abolition of property-based legacy reliefs. The 16 measures identified in the Plan will be given full legislative effect. Today, I will abolish or restrict a further nine reliefs bringing the total to 25.
But, as the Minister said several times during the speech –
Full details are set out in the Summary of Budget Measures.
Go to that and we see (page B.7) –
An impact assessment will be undertaken into the effects of the phased abolition of the property-base measures and the ‘guillotine’ provision.
So Yes, if you follow the trail, it’s in there. But what did that sentence mean? It could have been read as meaning that the impact would be studied as the provisions took effect, and since the speech gives the impression that the implementation was immediate, that was a reasonable understanding. Now we learn that the measure is held up for at least a year, and pending the before-the-fact impact assessment — a luxury that was not given even to reviled NAMA borrowers!
Fianna Fail backbenchers have gotten an insight over the last few days into the wordgames that the Brians play. The rest of us have seen it for a long time.