Finance Bill measures 'lack ambition', says Bruton

MEASURES to facilitate the development of Islamic finance in Ireland are included in the Finance Bill introduced in the Dáil by Minister for Finance Brian Lenihan.

The Bill, which gives effect to measures announced in December’s budget, also includes changes in mortgage relief, the ending of tax relief on service charges by 2011, an end to Dirt tax on Personal Retirement Savings Accounts and the requirement for financial institutions to issue statements setting out the amount of Dirt deducted from customer accounts.

Fine Gael finance spokesman Richard Bruton said, however, that the Bill “lacks the ambition needed for this very difficult time” and Labour spokeswoman Joan Burton described it as “a product of a Government which has run out of ideas about how to restore the economy”.

The Minister said “enhancing the attractiveness of Ireland as a location from which to conduct international business is an important theme of this Bill”. Islamic finance, worth an estimated $700 billion and growing at 10 per cent a year, covers any financing arrangement compliant with the principles of Sharia law, the Minister said. He stressed it “is the fastest-growing sector of the international financial services industry and it is important that we are in a position to attract this new type of investment into Ireland.”

Among the other measures also confirmed yesterday were the national solidarity bond to be marketed by the National Treasury Management Agency to small investors, as well as efforts to counteract tax avoidance and evasion in “offshore vehicles”.

The Bill “facilitates access by Revenue to information in the possession of Nama about any offshore entities or vehicles involved in transactions that are now under its scrutiny”.

The Bill will also give effect to the carbon tax announced in the budget and confirms VAT will be applied to certain public services. Mr Lenihan also said he would report to Cabinet in June about a review of tax expenditure in each department.

Mr Bruton said the “fundamental problem with the budget is that it lacks the ambition and a strategy in which people can believe. One key concern is that confidence is shot through in our community.” He said the Bill needed to “give people confidence” and the belief “that it is time to think more positively”.

Fine Gael “wanted to cut employer’s PRSI contributions, particularly at the low-wage level. We wanted the airport tax removed to strike a deal with airlines to bring more passengers into Ireland to kick-start the tourism sector. We wanted to have a once-off cut in low-rate, labour-intensive VAT rates to assure people not to postpone labour-intensive decisions such as house repairs.” The public and private sectors had to become “lean, mean and fit” but the Finance Bill also “had to show the State was willing to match with commitment and imagination the opportunities we have” and it failed to do so.

Ms Burton said “this Finance Bill, which should mark a turning point in our economic fortunes, is devoid of any real economic plan. The Government remains locked in denial about the failure of its banking strategy, in particular in respect of Nama to get credit flowing to businesses and individuals.” Once again, “the centrepiece of the Bill is a series of new tax exemptions for the IFSC, which have been neither costed nor set out in detail as was promised consequent to tax scandal after tax scandal. The Government is saying the same thing, namely, trust us and here is a whole bag of tax exemptions and tax reliefs which we will not explain, cost or set out in detail.”