DUBLIN: Ireland’s controversial plans to impose a wealth tax on its super-rich, similar to other European countries such as France and Spain, may yield just €22m (£18.6m, $23.2m), according to a study by the Economic and Social Research Institute (ESRI).
The research assessed the potential impact of adopting various European wealth tax structures in Ireland as left-wing parties in the country’s government debate about whether to introduce a such a levy to raise much-needed revenue for the Treasury coffers.
In France, a 0.5% annual tax is applied to relatively high thresholds of €900,000, increasingly gradually to a top rate of 1.5% to anything over €10m.
In 2012, Spain saw an exodus of wealthy expats after tax authorities restored a previously abolished annual wealth tax of 2.5% on worldwide assets valued over €10,695,996.
ESRI found that if such punitive measures were applied in Ireland, the government would make just €22m, as the revenue generated from high net-worth individuals (HNWI) would be modest, the Irish think tank predicted.
Last month, during the country’s annual budget, Portugal announced it will introduce a levy of 0.3% a year on properties valued over €600,000.
The move could benefit thousands of British expats living in the EU-member state as, if it is approved by the Portuguese parliament, it will replace a more punitive stamp tax system which applied a 1% charge on homes valued above €1m.
Similarly, South Africa is also comtemplating introducing an additional wealth tax on top of the estate duty that applies a 20% charge to estates with a net value in excess of ZAR3.5m (£205,538, $251,159, €230,831), including all worldwide assets.
Commentators predict that the new payment could take the form of a 0.5% annual tax on all assets with a net asset value over ZAR30m (£1.7m).
This is despite the head of South Africa’s most prominent tax-setting committe, judge Dennis Davis, telling local media that if it is introduced the wealth tax is not expected to add more than ZAR5bn to state coffers.
