ISME: Let workers earn first €25k tax-free

A business group representing small firms has called on the Government to allow workers earn up to €25,000 before they are caught in the tax net.

The Irish Small and Medium Enterprises Association (ISME) made the plea as the social partners get down to thrashing out a new national pay deal.

ISME chief Mark Fielding maintained it was “absolutely critical” that businesses were not hampered by unrealistic wage demands and that the talks on a new national wage agreement will recognise that actual Irish labour costs are out of sync with our competitors and represent a real threat to Irish businesses.

For the year to date, 16,000 redundancies have been announced.

Mr Fielding called for drastic action to ensure the employment figures do not go into a freefall with the obvious negative ramifications for the economy.

“With labour accounting for up to 50% of small business costs it is obvious these costs need to be reduced to sustain a viable business without letting people go,” he stated.

Mr Fielding said if the Government was serious about addressing the needs of those on low incomes instead of relying on a fundamentally flawed national minimum wage policy they should introduce an incomes policy that will allow workers earn an increased amount before they are taxed.

ISME called on the Government to allow workers earn up to €25,000 tax-free, up from the current €18,300 for a single worker, as this will increase the incentive to work and earn more and decrease the numbers working in the black economy, while tackling the poverty question.

Mr Fielding said there should be a cut of 5% for employers’ PRSI for salaries up to the average industrial wage of €34,000.

Above this rate PRSI should be reduced to 10% from the current rate of 10.75%.

He also called for a review of social welfare entitlements to ensure the benefit trap, whereby marginal increased earnings reduce a person’s social welfare entitlements, was not a deterrent to work.

Article courtesy of The Evening Echo