In its pre-budget submission, the institute points out that last year a total of €23bn was collected between income tax, PRSI and USC.
This is €2bn higher than in 2007 when there were 200,000 more people in the workforce.
Moreover, 23% of income tax payers pay 81% of the entire income tax wedge.
“This large figure has been brought about through the very significant increases in personal tax rates (through the USC), a reduction in the tax band, the introduction of the high earners’ restriction and a raft of base broadening measures.
“There have also been changes to PRSI rules which broadened the base of taxable income and eliminated the income ceiling for employees.
“In addition there were reductions in the main tax credits; the personal tax credit and the PAYE tax credit,” said tax institute president, Andrew Gallagher.
Unlike the Nevin Institute of Economic Research, which is against any tax cuts in the budget, the Irish Tax Institute, wants a cut in the top-line rate to make the country more competitive.
Mr Gallagher said it could take a number of years to bring our marginal tax rate down to competitive levels globally and welcomed the Government’s indication to start the process this year.
However, he stressed that Ireland should move this October to improve our targeted mobile executive offering, known as the Special Assignee Relief Programme.
“Attracting the decision makers and the value creators into Ireland will be more vital than ever in the future.
“The income tax regime, the Special Assignee Relief Programme and an attractive IP regime will play a greater role than ever as we adjust to the world post BEPS”.