THE GOVERNMENT is unfairly targeting workers whose income will drop as 2009 continues because of the mounting recession, the country’s leading accountants’ body has warned tax experts.
The Institute of Chartered Accountants in Ireland rejected the Department of Finance’s declaration that the back-dating of the income levy is necessary to combat tax evasion by the “front-loading” of income in the first four months.
“The particular downside here is that for many employees in our declining economy, income for 2009 will be higher in the first four months of the year than in the last eight.
“There’s neither acceleration nor avoidance involved, just the harsh economic reality,” ICAI director of taxation Brian Keegan told tax experts.
Under the Budget changes, taxpayers will pay levies on 2 per cent of their incomes up to €75,036, 4 per cent between that figure up to €174,980 and 6 per cent on annual incomes over that figure.
However, the Department of Finance has insisted that people with higher incomes in the first four months of the year than they have for the remainder will pay a composite 1.66 per cent levy to guarantee against tax evasion.
