Ireland Has Lowest Tax Take In EU, Says OECD Report

by Jason Gorringe, Tax-News.com, London

13 March 2002

New figures released by the Organisation for Economic Cooperation and Development have revealed that overall, the Irish tax take is currently the lowest in the European Union.

The OECD report revealed that the revenue collected by the Government represents just 32% of GDP, compared to an EU average of 42%. This will please the Irish authorities, who have historically prided themselves on the fact that Ireland's low tax rates are a draw for international business.

Tanaiste Mary Harney recently brought this concept into play following European corporate tax harmonisation proposals by German Chancellor Gerhard Schroder. Responding to suggestions that certain taxes should be imposed at EU level, the Deputy Prime Minister retorted that: 'there are no circumstances in the short, medium, or long term in which Ireland will cede our fiscal autonomy to EU institutions,' and blamed high unemployment and a relatively low saturation of international business interest in certain EU member states, on high taxation levels.

The OECD figures revealed that although Ireland is the lowest taxing EU country, in terms of the proportion of total revenue accounted for by personal income tax (31%), it comes fourth highest in the European Union. The goods and services tax, at 39% of the total tax take, is also high in comparison with other member states.

However, the report also showed that social security and payroll taxes account for a mere 14% of total revenue, the lowest level in the Union. Employers' social security contributions are also at the bottom of the table, according to the OECD, representing just 8% of the total revenue collected by the Irish Government.

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