Commission on Taxation and Welfare

The Commission on Taxation and Welfare (CoTW) was established by the Minister for Finance, Paschal Donohoe T.D. in April 2021 as an independent body tasked by Government to review how best the taxation and welfare system can support economic activity and income redistribution, whilst promoting increased employment and prosperity in a resilient, inclusive and sustainable way and ensuring that there are sufficient resources available to meet the costs of public services and supports in the medium and longer term.

The CoTW launched a public consultation in October 2021, titled Your Vision, Our Future, to gather broad perspectives about the way in which Ireland’s tax and welfare systems should be structured.

The Institute responded to the public consultation in January 2022. In our submission, we made 40 recommendations based on feedback we received from members of the Institute’s Commission on Taxation and Welfare Working Group, identifying areas of our tax code which are not working as intended or are in need of reform.

The CoTW held an open public meeting and stakeholder forum in March 2022. The purpose of the meeting was to engage a wide audience in information sharing and discussion.

Following the public consultation and the open public meeting and stakeholder forum, the CoTW delivered its report to the Minister for Finance in July 2022, Foundations for the Future: Report of the Commission on Taxation and Welfare (the Report). The Report was published on 14 September and contains a total of 116 recommendations which may influence future changes to Ireland’s tax and welfare regimes. The recommendations from the Report are summarised here.

In a press release welcoming the publication of the Report from the CoTW, Institute President, Colm Browne said, “The Commission was asked to take a long-term, strategic view of the tax system. As such, its recommendations should provide a framework to assist governments as they respond to the challenges of providing for an ageing population and funding the cost of climate action in the coming decade.”

Mr Browne said from an initial review, it appeared that many of the Report’s recommendations echo suggestions included in the Institute’s response to the Commission’s public consultation which it published in January. While the press release notes that the Institute agrees with many of the tax base-broadening measures proposed by the CoTW, the Institute disagrees with some of the CoTW’s recommendations, particularly in the area of capital taxes.

Recommendations of the CoTW report

The CoTW made a total of 116 recommendations in its Report to the Minister for Finance. The recommendations cover a broad range of areas including:

Fiscal Sustainability
Balance of Taxation
Tax Equity and Base Broadening
Taxes on Retirement Savings
Promoting Enterprise
Labour Markets and Social Protection Systems
Inclusive and Integrated Social Protection
Moving to a Low-carbon Economy
Land and Property
Promoting Good Public Health
Tax Expenditure Review Process
Modernisation of Tax Administration
Strategic Reform

We have drafted a summary of the recommendations included in the Report here

Institute response to CoTW public consultation

The Institute responded to the CoTW public consultation in January 2022. In our submission, we made 40 recommendations based on feedback we received from members of the Institute’s Commission on Taxation and Welfare Working Group, identifying areas of our tax code which are not working as intended or are in need of reform.

Our recommendations covered a broad range of areas from the need to ensure our personal tax system is internationally competitive to measures to support indigenous business and foreign direct investment. In respect of housing, we highlighted the need to restore certainty to the property market. On the issue of environmental taxes, we highlighted the need to consider new incentives to support businesses in reducing their carbon emissions while exploring opportunities to replace revenues from environmental taxes as a result of the decarbonisation of the Irish economy. On tax administration, we emphasised the need for continued investment in Revenue’s online services and IT infrastructure and identify areas of tax compliance in need of simplification.

Finally, we proposed measures to strengthen our dispute resolution procedures and recommend that an independent external body should be established, that could intervene on behalf of taxpayers where there is an issue regarding Revenue’s approach to handling their tax affairs and in exceptional cases where there is inherent inflexibility in the tax system, such as, interest charges, time limits and penalties.

We updated our members via TaxFax on 21 January 2022.