Finance Minister Michael Noonan’s decision to freeze local property tax rates until 2019 has been slammed by the European Commission as a “lost opportunity” to broaden the tax base.
In its latest assessment of Ireland, the commission said because of increased house prices since 2013 when valuations were set, the State is essentially forgoing a major tax windfall.
Following from his short hospitalisation, Mr Noonan last night bowed to pressure from the Independent Alliance and will now appear before the Public Accounts Committee over Nama’s controversial sale of its Northern Ireland loan book.
The Irish Examiner understands Mr Noonan was told by Independent ministers including Finian McGrath and Shane Ross at Cabinet yesterday that it would be better if he attended the committee and try and “kill off” the controversy.
While ministers agreed it was Mr Noonan’s decision to make, he was left in no doubt as to the feelings of his colleagues, sources said.
“I have today decided to accept the invitation of the Committee of Public Accounts to assist the committee in its examination of the C&AG’s Special Report on the National Asset Management Agency’s sale of Project Eagle,” Mr Noonan said in a statement.
His spokesman last night said it was his inclination all along to go but he wanted to discuss the matter with Cabinet colleagues first.
Before the announcement was made, Mr McGrath said he expected Mr Noonan would attend the committee, which is expected to take place on October 6.
It comes as Mr Noonan confirmed a reduction in the country’s economic growth by 0.5% of GDP in the wake of the Brexit vote in Britain in June.
Appearing before the Dáil’s new budgetary oversight committee, he also defended his intentions to abolish the Universal Social Charge by 2021, amid mounting calls for the tax to be retained. Mr Noonan said the decision to reduce the Universal Social Charge is a political one, despite mounting calls for the tax to be retained.
“You [the committee] have heard many opinions, and those opinions should be valued but there are other opinions as well. Political parties have felt the USC should be reduced,” Mr Noonan said.
Economists have warned against abolishing the USC, which at its height brought more than €4bn in to the exchequer.
Mr Noonan also confirmed that the budget will be announced on Tuesday, October 11, as had been signalled in recent weeks.
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