Call for €300m income tax cut

The Government needs only a €200m budget adjustment to reach the 3% fiscal deficit target agreed with the troika which gives it scope to introduce tax cuts and an increase in investment, according to Ibec Cork.

The Cork division of the employers’ group wants a €300m cut in income taxes; a €100m cut in consumption taxes; and the abolition of the pension levy.

“Increase the entry point to the marginal tax rate from €32,800 to €34,800; reduce the marginal tax rate from 52% to 51%; reform the universal social charge so self-employed and PAYE workers are treated the same; reverse recent alcohol excise increases and drop the unfair pensions levy, as had been promised,” it said in a statement.

It also called for tax incentives that will increase investment infrastructure and the broader economy.

“We need the right tax environment if we are to increase investment in enterprises and infrastructure.

The capital gains tax regime needs to be overhauled to encourage companies to reinvest their money in new projects. The Employment Investment Incentive Scheme needs to be rebranded and reformed to make it easier to use.

“We need to take full advantage of low interest rates and make much more use of public private partnerships.”

The latest set of exchequer figures show that the Government will need to do much less than the planned €2.1bn to achieve a 3% fiscal deficit by the end of next year.

However, on Tuesday the Taoiseach and Tánaiste moved to dampen expectations of a giveaway budget, which is set to be unveiled on October 14.

Setting out the Ibec submission and the role the budget must play in supporting Cork business, Ibec Cork director Peter O’Shaughnessy said: “The last few years have been tough for businesses in Cork, but things are improving. The number on the Live Register has now fallen, with nearly 8,000 fewer people, and this trend is set to continue.

“We now have the chance to put in place the building blocks for a new phase of growth and job creation,” he said.