Today’s Finance Bill will mean extra hardship for many families and households as the Minister proposes to charge VAT on a range of local authority services.

The Minister is proposing to extend VAT charges to services supplied by public bodies, including county councils, such as waste collection, recycling, off-street parking, toll roads and the operation of leisure facilities. Depending on the VAT rate charged for equivalent private services, these local authority services will now attract a VAT rate of 13.5% or 21%.

There is a double whammy in relation to service charges, such as waste collection, for which income tax relief will be abolished from next year. This relief is given a year in arrears. Service charges paid in 2011 can be claimed against income tax in 2010, but the relief will be completely abolished from 2012.

In his December budget speech, the Minister said “high earners must pay their fair share”. However, the Minister has sidestepped many of the reforms proposed by the Commission on Taxation in terms of restricting tax avoidance measures used by the super-rich to minimize their tax bills. For instance, he did nothing to curtail tax relief on investments in private hospitals or mega pension pots.

While the Minister has spoken at length in the past about the abolition of property-based tax reliefs, he has acted extremely conservatively by only abolishing one of these reliefs in the 2010 Finance Bill. The more prominent reliefs, such as on investments in private hospitals, remain fully intact.

The continuing cost to taxpayers of all of these property-based tax reliefs, which so stoked the boom, continues to be in excess of €400m per year. Some of these reliefs will continue to drain taxpayers’ money for up to 7 years or more.

The minimal Green Party input into this budget is set out in section 24 where the windfall tax, introduced as part of the NAMA act, is to be extended from re-zoned land to cover land subject to a ‘material contravention’ by a local authority. Given the state of the property market, this provision is purely notional at present and is unlikely to yield any tax take.

By contrast, the thorny issue of the huge tax losses being accumulated by banks and property developers as a result of the property crash, and which they can use to set off against future tax liabilities, is not addressed in the Bill.

In contrast with administrations around the world, there are no proposals from the Minister to introduce tax curbs on the super-sized remuneration packages of top executives or those working in financial services.

Following a long Labour Party campaign, the Minister has finally delivered a levy on tax exiles of €200,000, but it remains to be seen how many of the near 6,000 tax exiles this will actually affect.

The introduction of tax structures to facilitate Sharia law based lending is largely a measure designed to facilitate activities in the IFSC. This is one of a number of measures to make investing in the IFSC more attractive from a tax point of view. As such, it is more in important than ever that they tighten up the regulatory regime to restore Ireland’s reputation for financial probity.