Tuesday 23 December 2014

Property tax is 'growth friendly'

Published 11/01/2013 | 05:00

AN EU commissioner has described a property tax as the most growth-friendly tax.

Algirdas Semeta, the Commissioner for Taxation and Customs Union, Audit and Anti-fraud, also warned that the day of isolated tax policies across Europe had ended.

But the Lithuanian economist told the Oireachtas Finance Committee that closer tax co-operation did not threaten state sovereignty.

"I can assure you that there is no European threat to the tax sovereignty of any member state," Mr Semeta said.

"However, with our extremely interconnected economies, working in isolation doesn't pay off.

"It undermines national reform efforts, creates tensions and loopholes between member states' systems and weakens our single market."

Mr Semeta, who was in Ireland as part of the EU presidency events, said economic adjustment was always difficult.

Adjustment

"Of course it's very painful. It's very difficult for people to survive in this situation, but economic adjustment is always difficult and one has to concentrate to make necessary reforms," he said.

"I believe that with the reforms that Ireland introduces . . . that will restore the growth and prosperity of Ireland in the future.

"I agree at present it is a very difficult time for people in Ireland."

The commissioner also said that Ireland had nothing to fear from the proposed Common Consolidated Corporate Tax Base (CCCTB), claiming it had nothing to do with tax rates.

Mr Semeta said the Commission did not expect CCCTB to be adopted during Ireland's six-month presidency, but he hoped the proposal would be pushed forward.

The Lithuanian economist was also questioned as to the validity of pressing ahead with the Financial Transaction Tax when just 11 countries had signed up to it, including France, Germany, Belgium, Italy and Austria.

Ireland has opposed joining in, fearing it would harm its financial services sector and lose jobs to the UK, which has also not signed up.

Mr Semeta said the 11 countries accounted for 90pc of eurozone GDP and 67pc of European Union GDP.

Irish Independent

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