30% Of Irish Taxpayers Pay Top Rate

by Jason Gorringe, Tax-News.com, London

16 January 2002

According to a report from the Tax Strategy Group, almost 30% of Irish taxpayers are now paying the top income tax rate of 42%, compared with 23% for the previous year, when Finance Minister Charlie McCreevy enacted sizeable income tax cuts.

Although the Irish Government would ideally like to see only 20% of taxpayers paying the top rate, this year's modest E630 million package means that this is becoming increasingly unlikely.

The Tax Strategy Group also revealed that until the events of September 11th, and the ensuing global economic slowdown, the Department of Finance believed that the Exchequer's tax take would only fall short of Budget 2001 predictions by around E1.27 billion (£1 billion). The final figure for the shortfall, however, was around double that at E2.5 billion (£2 billion).

The Group suggested that as the economy is unlikely to record the magnitude of growth experienced during recent years: 'The need for special tax incentives to promote activity should be reassessed,' arguing that 'such an assessment offers an opportunity to discontinue base narrowing "tax breaks".'

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