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Ibec Calls For Irish Income Tax Cuts

by Jason Gorringe,, London

18 December 2013

Ireland is poised to enter a new phase of strong economic growth, but its income tax remains too high, Ibec has said.

Ibec, which represents the country's businesses, has released its latest Quarterly Economic Outlook. The document praises the Government's successful exit from the bailout program imposed on Ireland three years ago. The exit formally took place on December 15, and is described by Ibec as a testament to both sensible policy and the strength and the resilience of the business sector. The economy is expected to grow by nearly 3 percent next year, and the jobs market will continue to improve.

Setting out Ibec's priorities for the next phase of the recovery, the Outlook stresses the need for tax reform.

At 52 percent, Ireland has one of the highest marginal tax rates in the Organization for Economic Cooperation and Development (OECD). The OECD average is just 36 percent. Furthermore, because the tax kicks in at a low income level, Ibec believes that it acts as a disincentive to work. It is calling for the marginal rate to be cut, and the bands altered, to support employment and promote Ireland as an attractive place to invest.

More generally, Ibec would like the Government to pledge that the tax burden should not exceed 37 percent of gross national product. This figure is the average recorded over the past 15 years in Ireland, but it nevertheless remains above the European Union average of 27 percent. The Government should also ensure that its business tax offerings remain competitive in light of potential OECD-led changes to international tax rules.

TAGS: tax | business | Ireland | tax incentives | tax rates | tax reform | trade association | trade | individual income tax | Europe

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