Tax system may be ‘too progressive’

The Irish Tax Institute has questioned whether a series of changes to the Irish personal tax code in successive budgets has made the country’s tax system “overly progressive” and begun to impact firms ability to attract overseas workers.

Short-sighted annual changes to the taxation system over the past nine budgets has left Ireland with a patchwork quilt type of system with workers paying higher rates of tax while still on below average incomes.

Tax paid rises very progressively as salary increases, with the progressivity accelerating from €75,000 onwards in particular, the Institute noted in its report, ‘Perspectives on Ireland’s Tax System — A Medium- to Long-Term Approach’.