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Ireland: Sean Healy: Advocates tax credits being refundable

16 September 2014   (0 Comments)
Posted by: Author: Claire O'Sullivan
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Author: Claire O'Sullivan (Irish Examiner Ltd)

Social justice campaigners have come out against any reduction in the top rate of tax and any increase in the standard tax band rate in the upcoming budget, saying such moves would favour the better paid.

Social Justice Ireland argues that the higher a person’s income, the more they would benefit from a decrease in the 41% tax rate. A single person begins paying the higher tax rate on all earnings over €32,800.

According to the organisation, people earning €50,000 a year would gain €172 a year in extra take- home pay from such a tax cut, while those on €125,000 would gain €922 a year.

If the standard tax band were increased by €1,350, a person on €25,000 would gain nothing but a person on €50,000 would gain €283.50 a year, they argue.

They also claim that reducing the top rate of USC by 0.5% would benefit people earning over €16,016 while people in low-paid jobs would gain nothing.

"Under no circumstances should the 20% income tax band be widened or the top tax rate reduced in the next budget. The poorest 10% of society lost most since the onset of the crisis. Reducing the lower USC rates or increasing tax credits are the fairest options and Government should opt for these rather than choosing any of the three unfair options,” said Michelle Murphy, research and policy analyst with Social Justice Ireland.

Social Justice Ireland would rather increase personal tax credits; reduce the lowest USC rate by one percentage point; or reduce the middle USC rate by two percentage points. They say these changes would improve annual income by €99 to €120. A 1% decrease in the USC would give another €100.36 to all individuals with earnings in excess of €10,036.

Decreasing the 4% USC rate by 2% would give benefits to those with income of more than €10,036.

"If money is available for tax reductions then making tax credits refundable would be the fairest and best option to take. By making tax credits refundable the full value of the tax credit goes to everybody who has an earned income,” said director of Social Justice Ireland, Sean Healy.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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