Tax changes ‘unfair’ for those with lower incomes

Tax changes in the budget are “most unfair” with those on higher incomes benefiting the most, according to Social Justice Ireland.

A budget analysis by the independent thinktank shows a single person earning €25,000 gains €65.87 per year. However, a single person on €75,000 gains €328.45, almost five times more.

It points out that for the same amount of money, income tax credits could have been made refundable to tackle the working poor issue and every taxpayer could be given an additional tax credit of €100 per year.

“In practice, this would have meant that everyone would be €100 better off while the working poor would gain a little more,” it states.

While there are some welcome initiatives and the impact was mildly progressive, SJI says the budget does not tackle the major crises and challenges facing society.

Looking ahead, SJI believes an increase in Ireland’s overall level of taxation is unavoidable. In any event, more revenue will have to be collected to maintain current levels of public services and supports.

SJI believes profitable firms with substantial income should contribute to society rather than pursue ways to avoid this.

“We believe that Government should introduce a minimum effective rate of tax on corporate profits. We have proposed a rate of 6% and regret that Budget 2018 did not do this.”

It says new initiatives and increased overall spending on health is welcome but believes it will be impossible to maintain the existing level of service and implement the new initiatives on the budget provided.

The Jack and Jill Foundation says the Vat compensation scheme to be introduced in 2019 will take some of the pressure off their fundraising team — it pays back over €100,000 in Vat bills every year.

The charity provides nursing care and support for children with severe neurological development issues, as well as offering some respite to the parents and families. It needs to raise €3.5m every year to keep the service going. Less than 20% of the funds required comes from a HSE grant.

The new scheme that comes into effect in January has an initial allocation of €5m and will be payable one year in arrears. Under the scheme charities will be entitled to a refund of a proportion of their Vat costs on inputs, including eligible purchases, based on their non-State funding.

Jack and Jill chief executive, Hugo Jellett, says it is more than 10 years since charities, including Jack and Jill, sought government support for the scheme.

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