Local taxes

[THR]

What is the situation in Ireland with local taxes? Which layer of government do you pay local taxes? The municipality or the county level?

In Finland, we pay local taxes to the municipality, which is responsible for providing hospitals, education, rescue services, libraries etc. We have no effective government between the central government and the local level.

Nowadays, we have a large-scale project going on in order to reduce the number of municipalities from the current 431, which is clearly too many for a country of the size of Finland. Most of these municipalities are too weak to fulfill their duties and are therefore highly indebted.

Another point is that as the larger towns grow out of their boundaries, it creates an unnatural situation in which many people go to earn their tax-euros in the central town of any given region and pay those taxes to another municipality. That cannot be right. The ideal situation is that one goes to work in the same municipality where he or she pays local taxes.

Of course, reform is difficult because the existing situation entails too many vested interests.

[michael1965]

Local taxes used to be based on property valuations, but that was so long ago I can't remember how it worked. They were very unpopular (like they are everywhere) so they were abolished (except for businesses)

The result has been more centralisation of power to central government, and a total lack of transparency about how local government is funded

Some would say that the result has been pretty disastrous, though that is debatable.

Personally, I'd like to see more transparency about how the system is funded, but I'm not convinced it's all that bad.

[THR]

Thanks for your reply Michael. So, in Ireland it does not affect your tax-burden in one way or another in which part of the country you live as the local government is funded by the central government. Somehow I find that a bit strange. I should think that people in Dublin pay more taxes than people elsewhere in the country.

In Finland, different municipalities have different tax-rates, my home-town of Vantaa just outside Helsinki, has 18.5% tax-rate while Helsinki has 17.5%. Some very highly indebted municipalities have tax-rates of 20%.

Of course, some municipalities are so weak that they cannot collect enough revenue to fund their mandatory expenses, so in effect they are funded by the central government, which means that people of the wealthier municipalities actually finance the economy of the remote parts of the country.

[michael1965]

Thanks for your reply Michael. So, in Ireland it does not affect your tax-burden in one way or another in which part of the country you live as the local government is funded by the central government.

Except for whatever revenue they raise themselves from businesses, and also some other sources like waste collection charges

Somehow I find that a bit strange. I should think that people in Dublin pay more taxes than people elsewhere in the country.

Do you mean that Dublin's local government should have more money to spend? That could well be the case anyway, due to the revenue from businesses, but as an ordinary citizen, I have not much idea how the system works.

In Finland, different municipalities have different tax-rates, my home-town of Vantaa just outside Helsinki, has 18.5% tax-rate while Helsinki has 17.5%. Some very highly indebted municipalities have tax-rates of 20%.

Of course, some municipalities are so weak that they cannot collect enough revenue to fund their mandatory expenses, so in effect they are funded by the central government, which means that people of the wealthier municipalities actually finance the economy of the remote parts of the country.

I just checked, and was surprised to learn that Finland has a population pretty much the same as Ireland (North + South). You might be interested to know that in Northern Ireland, they are currently talking about replacing the large number of district councils (municipalities) with a smaller number of larger councils. There could be some debate about it onthis site.

[FutureTaoiseach]

Read my lips - no new taxes!