The Irish Tax Institute has welcomed the publication of “Foundations for Future”, the Report from the Commission on Taxation and Welfare.
Speaking today, Institute President Colm Browne said: “The Commission was asked to take a medium to long-term, strategic view of the tax and welfare systems. 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.
“We agree with many of the tax base-broadening measures proposed by the Commission. We also support the recommendation that the balance needs to be tipped away from economically regressive labour taxes in favour of indirect taxes such as VAT, property and environmental charges. However, we have concerns that certain recommendations would increase the cost of employment as acknowledged by the Commission themselves.” said Mr Browne.
In addition, the Institute disagrees with some of the Commission’s recommendations, particularly in the area of capital taxes. The Commission’s recommendations to impose Capital Gains Tax (CGT) on assets transferring on death and to significantly curtail CGT relief on disposals of farms and businesses would be a fundamental shift in tax policy and would require consultation and in-depth careful consideration of the consequences involved.
Mr Browne welcomed the recognition in the report for targeted tax measures to promote enterprise and growth in the SME and indigenous sectors whilst maintaining a focus on remaining an attractive location for FDI. He also endorsed the recommendations of the Commission for the tax administration system to be further modernised and for the annual budgetary cycle to be augmented to facilitate greater debate.
Mr Browne said the Institute would study the details of the Commission’s comprehensive Report, “Any longer-term perspective of our tax and welfare systems deserves the attention of all who take an interest in public policy. Its recommendations present options for the Government and its successors to consider as they seek to address future challenges. Ultimately, however, decisions on tax policy are a matter for government,” concluded the Institute President.
Further details on the work of the Commission on Taxation and Welfare and its recommendations are available on the Institute’s dedicated Commission on Taxation and Welfare Webpage.