Tasc warning on tax breaks 'overreliance'

IRELAND’S overreliance on tax breaks has created inequalities and failed to generate sustainable economic activity, according to think tank Tasc.

Launching a report examining the role of Ireland’s Finance Acts in the economic crisis, Tasc’s head of policy Sinead Pentony said the tax system must be reformed in order to redress the State’s high level of economic inequality.

“There is an urgent need to ensure that tax measures support the productive economy – the economy which provides jobs, which in turn results in a higher income and consumption tax take,” she said.

Until now, she added, finance acts had been skewed in favour of attracting foreign direct investments indiscriminately, rather than targeting multinational companies in “job-rich” sectors such as manufacturing.

In the report, Tasc director Paula Clancy noted a “continuing overreliance” on tax incentives to attract overseas investment, but that supports for domestic employers are insufficient.

Ireland’s approach to the annual finance act must be completely changed to avoid repeating mistakes already made, she said.

“For example, the Finance Act should ensure that everyone in Ireland pays a progressive share of tax, with those who have benefited most from the economy paying more.”