Ibec calls for Irish income tax cut
10 March 2015
Posted by: Author: Jason Gorringe
Author: Jason Gorringe (Tax-News.com, London)
Danny McCoy, the Chief Executive of business group Ibec, has warned that
Ireland's high income tax rates "are out of line internationally and are a
serious disincentive to work, taking promotion, or doing overtime."
Speaking at Ibec's CEO Conference, McCoy said that, "despite
welcome moves to reduce the income tax burden in the last Budget, there is
scope to do a lot more."
Finance Minister Michael Noonan's 2015 Budget, delivered in October
2014, included reforms to income tax rates and bands and the Universal Social
Charge (USC), which reduced the marginal rate of tax from 52 percent to 51
percent for those with earnings below EUR70,000 (USD76,831).
As McCoy pointed out, Ireland still has one of the highest marginal tax
rates among Organisation for Economic Cooperation and Development (OECD)
countries, at 51 percent. He criticized the Government for retaining a higher
marginal rate for those earning over EUR70,000, and warned that Ireland risks
"losing our best and brightest to competing jurisdictions – countries with
more sensible tax codes."
According to McCoy, a single worker earning EUR75,000 in Ireland takes
home approximately EUR6,000 less than a similar worker in the UK.
"This is making it difficult for Irish businesses to attract and
retain skilled workers. It also flies in the face of the shared aim of making
Ireland a leading centre of design and innovation," he said.
McCoy called for the 2016 Budget to "prioritize further cuts to the
marginal rate and adjust the band to give more money back to workers."
The Government has made clear that it intends to continue the tax reform
program begun last October. The Ibec conference was also addressed by Prime
Minister Enda Kenny, who said: "In the Budget, we reduced the USC and
income tax on middle income workers earning less than EUR70,000. We will reduce
it further in the next Budget, and in the following Budgets if re-elected."
Kenny added that "well designed tax cuts that reward hard work and
enterprise, and help create jobs, generate the resources we need for better
services and more investment." He pledged that, in 2015, the Government
will "begin the process of equalizing the income tax treatment of the
employed and the self-employed," and said that "the discriminatory
tax treatment of self-employed people inherited by this Government can no
longer be justified."
This article first appeared on tax-news.com.