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Policy issues concerning Taxation

The most competitive economies of Europe all collect substantially more tax than Ireland does. The evidence suggests that a low tax, low service strategy for attracting investment is short-sighted and that quality education, infrastructure and services are far more important.

Budget 2021 should include a tax on windfall gains from the re-zoning of agricultural land. This money should be made available to local authorities and used to address the ongoing housing problems they face.

If a government is setting environmental goals, it is important that its taxation system supports these goals. There is great scope in Ireland for shifting the burden of taxation away from productive activity and onto activity which reduces social wellbeing, depletes natural resources and biodiversity, harms the environment, and contributes to climate change. The taxes that people and organisations pay should, to the greatest extent possible, be based on the value they subtract by their use of common resources.

The full cost to Ireland of the COVID-19 pandemic is as yet unknown.  Our unemployment rate was 16.5 per cent in March 2020 and the Stability Programme Update (SPU) estimates a possible general government deficit of €23 billion this year; and the Exchequer receipts for March 2020 were almost €1 billion lower than March 2019Social Justice Ireland recently published our briefing on policy options for Ireland’s Taxation System post-COVID 19.  Here we explore one option in particular, an increase in Corporation Tax.

It is clear that tax policy will play a vital role both in the immediate Government response to support people and businesses, and in rebuilding our society and economy once the worst of the health impacts are contained.  The new Government has an opportunity to reform and broaden our tax base and lay the foundations to increase our total tax take now to ensure we are well prepared to meet any future shocks.  We have a once in a generation opportunity to build a new society, a new economy and a new country that reflects the lessons we have learned in recent weeks. 

The European Union faces many challenges in relation to healthcare, cost of housing and financial distress that will be further exacerbated by the Covid-19 pandemic.  Ireland and the EU urgently need to develop substantial coordinated actions on these issues.  ​

If a country is setting social, economic and environmental goals, it is important that taxation policy supports these goals. Ireland needs to have a real debate, not just about the levels of services and infrastructure it wishes to have in the coming decades, but also how these are to be financed. Just Taxation is one of the five key priority areas examined in Social Justice Matters: 2020 guide to a fairer Ireland. This report analyses ‘Just Taxation’ as one of five key priority areas required to build a fairer Ireland in an integrated and sustainable manner. 

The Central Statistics Office recently published the Household Finance and Consumption Survey 2018.  This is the only household survey that collects combined information on asset, income and debt levels of Irish households.  It provides us with a valuable data and insight into where wealth and assets are concentrated (both in terms of location and income deciles), and the levels of debt of Irish households. 

If a country is setting social and economic goals, it is important that taxation policy supports these goals. Ireland needs to have a real debate, not just about the levels of services and infrastructure it wishes to have in the coming decades, but also how these are to be financed.   Read Social Justice Ireland's Election Briefing on Taxation for an outline of a number of key challenges facing Ireland and some policy proposals that should be in the next Programme for Government.

As a policy objective, Ireland can remain a low-tax economy, but not one incapable of adequately supporting necessary economic, social and infrastructural requirements. Our current low tax/low investment model is not sustainable and we regret that Budget 2020 did not take greater steps to address this.

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