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Policy issues concerning Taxation

New research on the total amount of tax Irish people pay finds that the poorest 10% of households pay a larger share of their income in tax than the richest 10%.  When income tax and indirect taxes such as VAT are included in the calculations the study conducted by the Nevin Economic Research Institute finds that:

The latest edition of 'Taxation Trends in the EU' (published June 16, 2014) shows that once again Ireland’s total tax-take is one of the lowest in the Union. It now stands at 28.7% of GDP compared to an EU average of 39.4%.  It is clear that if Ireland is to aspire to services and infrastructure at an EU-average level then it must move its total tax-take towards that EU average. 

This podcast outlines the main findings and policy recommendations on taxation from our Socio-Economic Review 2014.  Issues discussed are corporate tax, FTT and the tax base.

Government’s tax proposals should be rejected because they would give all the benefit to those earning over €32,800 while giving nothing to those earning less than that amount according to a new study by Social Justice Ireland.  This study shows that single people earning €125,000 could gain up to €922 (depending on how Government implemented its own proposals) while those earning less thatn €32,800 would gain nothing.

story in The Irish Times (March 7, 2014) shows that Apple paid €36m tax on $7.11bn profits at its Irish unit. This is a scandal that must be addressed now by the Irish Government. Social Justice Ireland sets out some proposals below.

Social Justice Ireland challenges the Minister for Finance’s proposal that the tax band ceiling of €32,800 should be raised.  Changing the tax bands in the next Budget would only benefit those who are better off, not those earning low incomes.

The OECD has just released an update on the 2014 deliverables of the Action Plan on Base Erosion Profit Shifting (BEPS).

Leaders of the world’s largest economies have backed what they call “an ambitious and comprehensive” plan to crack down on multinationals that shift profits into low tax countries.

The G20 countries also increased the pressure on tax evasion with plans to exchange tax information automatically between themselves by the end of 2015.  They went on to call on all other jurisdictions to join them by the earliest possible date. 

Global solutions are needed to ensure that tax systems do not unduly favour multinational enterprises, leaving citizens and small businesses with bigger tax bills, according to the Organisation for Economic Cooperation and Development (OECD).

The European Commission has proposed an action plan to tackle the issues of corporate tax evasion and fraud in the EU. Such evasion and fraud by major companies are believed to cost European governments up to €1trillion a year.

The action plan sets out 30 new measures to close loopholes and increase information exchange. The European Commission has also called on EU-member countries to implement the current EU code of conduct on business taxation as soon as possible.