The Gazette 1983

INCORPORATED LAW SOCIETY OF IRELAND GAZETTE Vol. 77 No. 8.

October 1983

Comment . . . . A Foolish Tax

In this issue . . .

A S the date of implementation of the Residential Property Tax grew nearer so the concentration of minds on the detailed provisions revealed extraordinary examples of misplaced logic in the legislation. One thing must first be made clear; objection is not being taken to an additional tax on those whose annual incomes exceed £20,000. While many in this income bracket may have been hard pressed by the recession and by existing levels of taxation they are still in a group which may have to be pressed even more heavily in the short term in the pursuit of fiscal rectitude. There may even be a case for the introduction of a property tax but the mix of the concepts of income level and property value upon which the Residential Property Tax is based has been applied with a kafka-esque logic which must lead to ludicrous consequences. The two aspects of the tax which have drawn most criticism are firstly the aggregation of all household incomes, requiring the tax payer to pay tax based on the incomes of third parties over whom he may have no control and secondly, the "market value" concept which with its presumption of ownership of an un-encumbered fee simple is so artificial as to raise serious doubts as to its constitutionality. The tax as introduced is a nonsense. It pays lip service to the doctrine of simplicity of taxation by the introduction of a so called "self assessment" method. Yet if it is to be monitored at all it may well end up with the highest cost/yield factor of all our taxes. This at a time when the report of the Commission on Taxation has so recently recommended the simplification of our tax system. As the "Economist" has recently said of the UK system, which we have not merely inherited, but have continued largely to follow, "taxation is an illogical mess and every tax payer knows it": Official figures in the UK show that sophisticated property taxes and capital taxes have high cost/yield factors. Our profession is only too familiar with the delays which, perhaps necessarily, are involved in the processing of capital tax cases, with consequent inconvenience or even hardship for members of the community. There is a strong argument that taxes should not only be simple, but also efficient, meaning in part that they should not result in tax payers taking a course of action which they would not take in the absence of the tax. This applies not merely to the taxes themselves but also to concessions which are given. The "Economist" example of the half page of UK legislation providing for tax relief on life assurance being accompanied by 28 pages of anti-avoidance legislation is not a unique one, nor one unknown in this jurisdiction. Indeed some of the curious provisions of the Residential Property Tax itself are evidence of the difficulties of implementing efficiently what appears to be a simple concept. There is unfortunately evidence that our Revenue authorities have been less than effective in collecting taxes from the Corporate sector in recent years. Their resources should not have been thinned further by the need to provide experienced officials to monitor the collection of this new tax. It should never have been introduced and should be repealed immediately. • 207

Comment

207

Right to Jury Trial in Cases of Contempt

209

Practice Notes

217

Legal Offices Mixed Football

219

Masters and Apprentices

221

Rights of Children and the discretion

of the Courts under Section 117 of the Succession Act, 1965

223

Society Staff Retirements

231

Correspondence

233

Professional Information

234

Executive Editor: Editorial Board:

Mary Buckley Charles R. M. Meredith. Chairman John F. Buckley Gary Byrne William Earley Michael V. O'Mahony Maxwell Sweeney Liam O hOisin, Telephone 305236

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