Tax institute says further hikes will discourage enterprise
PLACING FURTHER tax burdens on individuals or businesses in the December budget would discourage enterprise and innovation in an economic climate when they are critically needed, according to the Irish Taxation Institute (ITI).
In its pre-budget submission, the institute says additional taxes would prove counterproductive, and that taxation policy should be used strategically to plan a route towards economic recovery.
“Our taxation policy should enhance the competitive strength of our economy and bring some stability to revenue yield. This will not be achieved easily.”
In order to do this the institute proposes a target be set to reduce the aggregate marginal rate of tax, PRSI and levies from its current level of 55 per cent to below 50 per cent by 2012.
It says there should be a restatement of the State’s “absolute commitment” to the 12.5 per cent corporate tax rate and the budget should set out clearly the tax treatment of residential property over the next three years.
“This budget statement should be used to send out a clear message that Ireland remains open for business and that we will maintain a tax environment where enterprise is fostered, innovation is encouraged and high-value jobs can be created.”
The ITI says to stimulate job creation new businesses should be exempt from paying PRSI on the first 10 jobs created for the business’s first three years in operation. It also says that unemployed people should be entitled to off-set any costs incurred on retraining or upskilling against income tax over the previous three years.
The submission says the levies introduced in recent budgets should be integrated with income taxes, and that the emergency income levy, which was intended as a temporary measure, should be removed before 2012.