Taxation reviewThe Minister for Finance is to consider "comprehensive reform" of tax incentive schemes.
Mr Cowen said the unrestricted use of such tax relief schemes was no longer acceptable to the tax-paying public. He said he had directed that a study be carried out and that proposals be brought forward.
"I am now making it clear that I intend to include appropriate follow up measures in next year's Budget," Mr Cowen told the Dáil in his Budget address.
According to Department of Finance background documentation, the review would examine a number of issues, including the degree to which the schemes allow high-income individuals reduce their tax liabilities.
The review will include a consultation process where submissions will be sought on measures that could limit the extent to which reliefs can be used to reduce an individual's tax bill.
A number of schemes will be evaluated in external consultancy work, according to the document. "The review will also incorporate an examination of data that is due to come to hand in late 2005 in relation to certain exempt income, i.e. woodlands, stallions and greyhounds as well as data already available on other exemptions, e.g. for artists."
Mr Cowen said tax reliefs aimed at boosting economic and social development, such as property reliefs, had been estimated by the Revenue Commissioners' chairman to cost the exchequer €200 million annually.
They formed part of a wide range of tax reliefs, which included such measures as mortgage interest relief, medical expenses relief and normal business reliefs. The total cost to the exchequer of all reliefs was about €8 billion annually.
Mr Cowen said incentive reliefs, such as property reliefs, had been introduced, broadened and enhanced by governments of all shades in the past, and for good reasons at the time.
"Despite supporting many of these reliefs, there are those who seem unhappy when people with the capacity to use them have in fact done so, which is not a consistent stance to take."
He said his aim was to improve the equity of the tax system, taking into account the social and economic benefit of reliefs in delivering investment in housing, enterprise, urban and rural renewal, tourism, films, and health facilities.
"I want to ensure that I take the time necessary to strike a careful and considered balance in what I do. For the successful operation of such schemes and to achieve the common good, we need to ensure the right balance is achieved between the benefit to the investor and the good of the community."
He said his preference was for a complete and comprehensive reform of the system rather than a piecemeal approach.
The reliefs to be evaluated by external consultants are: urban renewal; rural renewal; town renewal; living-over-the-shop; multi-storey car parks; park and ride; student accommodation; third level buildings; hotels and holiday cottages; nursing homes; private hospitals; sports clinics and childcare facilities.
