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Corporation Tax

Budget 2021 must be judged by the degree to which it protects people from poverty, equips people and businesses to confront Covid-19 and Brexit, and addresses the climate and environmental crisis. The challenge for Government is to use the fiscal space available to introduce the necessary measures to support incomes and underpin the public health measures to save lives, preserve our economic capacity and prepare for the impact of a no-deal Brexit.  Its response to this challenge in Budget 2021 has been mixed.

The National Economic Plan - to be published on Budget day - must give equal weight to environmental, social and economic considerations. Otherwise, this Government will simply repeat the mistakes of the past and many will be left behind.  The National Economic Plan must be underpinned by a new social contract that treats our environment, society and economy equally

'Building a New Social Contract – Policy Recommendations’ contains more than eighty specific policy recommendations that would go a considerable direction towards a new social contract to improve the quality of life and wellbeing of everyone and ensure that a no-one is left behind as our economy and society recovers from the impact of Covid-19.

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.

As we navigate through the global crisis caused by COVID-19, 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.  This policy briefing explores some options available to the new Government that would increase our overall tax take as a proportion of national income,  broaden our tax base, and deliver a tax policy that would support our social and economic recovery and a new Social Contract

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.

Budget 2020 is the ideal time to reform how Ireland does corporate taxation. At present, too many firms get away with paying low effective rates or availing of overly generous subsidies or tax holidays. Our Budget 2020 submission, published in June, contains numerous proposals to improve matters.

The local and European elections threw up a variety of diverse issues many of which seem to be at odds with each other.  Concerns among voters about the impact of climate change and about the future of agriculture and livelihood of farmers may seem incompatible at first glance, but yet they are both very important issues to different sectors of society.  What these elections remind us is that a comprehensive policy framework is required to make progress on these issues and deliver a better future for everyone.

Large multinationals are paying significantly lower tax rates than they were before the financial crisis. Companies’ effective tax rates have fallen 9 per cent over the last decade, despite some efforts by politicians to tackle aggressive tax avoidance.

Social Justice Ireland recommends a Minimum Effective Rate of 6 per cent. This would only affect companies who are currently availing of effective rates lower than that on a regular basis; something that is quite unacceptable.