If news reports are to be believed, Ireland could be facing a General Election in coming weeks. While leaving the politics to the politicians, the prospect of an election raises some interesting questions about Budget 2017 and in particular, stamp duty.

In Budget 2017, the Minister for Finance announced an increase in the rate of stamp duty on commercial property from 2% to 6%. The increase applies from 11 October 2017, with "grandfathering" for certain contracts which were entered into prior to that date. The detailed provisions relating to the increase are contained in Finance Bill 2017, which is currently undergoing scrutiny in Dáil Éireann (the Irish Parliament).

The power to increase rates of tax prior to the enactment of legislation is derived from an arcane piece of law called the Provisional Collection of Taxes Act 1927. This allows a financial resolution to temporarily increase taxes, or introduce new taxes. The financial resolution, and therefore the tax increase, can cease to have effect in certain circumstances. It is at this juncture the political situation becomes relevant.

If the legislation is rejected by the Dáil, the temporary measure will lapse. It will also lapse at the end of four months from its original approval date. However, in calculating this four month period, any period during which the Dáil is dissolved, is disregarded. A General Election usually leads to the dissolution of the Dáil for a period of time.

If the measure lapses, any money collected has to be returned to taxpayers!

What does this mean? If a General Election is called, the politicians may be faced with a choice. It could adopt the Finance Bill in its current form. Alternatively it could leave the temporary measures in place and approve them, in the newly elected Dáil, after the General Election. Given the broad political support for the stamp duty increases, it is likely the stamp duty increase will ultimately be enacted. However, the Provisional Collection of Taxes Act 1927 is probably enjoying its time in the limelight, for a few weeks at least.

{Fine Gael is preparing for an election in January, the Irish Times reported, as the opposition readies to submit a no-confidence motion on Friday in Dublin. It will be debated on Tuesday.

https://www.bloomberg.com/news/articles/2017-11-23/irish-government-faces-home-crisis-as-brexit-decision-looms