EIGHT in 10 business leaders fear implementation of the Commission for Taxation report would lessen Ireland’s competitiveness, according to a new survey carried out by PricewaterhouseCoopers (PwC).
The survey follows the Commission’s wide-reaching report into how the Government might effectively rebalance Ireland’s tax framework and better distribute the burden of taxation.
The element of the proposals which has made business people so negative relates to the recommended taxes on labour.
Some 92% of survey respondents said these would have a negative impact in the personal tax area and, ultimately, have a knock-on effect for the country’s status as a competitive place in which to do business.
According to PwC partner Colm Kelly: “The results highlight the importance of implementing the commission’s recommendations in a manner which lowers, rather than increases, taxes on labour. While this is consistent with the views expressed in the commission report, there is real concern that this will not happen.
“One of the major concerns is the recommended abolition of the remittance basis of taxation. Ireland does not have an appropriate regime for attracting senior executives to locate in Ireland and the abolition of the remittance basis will make us even less attractive.
“As Ireland competes for international investment on the worldwide stage this is an increasingly relevant factor in attracting foreign direct investment. We are currently not competitive and some pragmatic steps must be taken to deal with this,” Mr Kelly added.
“We have a generally good business tax framework and many of the recommendations made by the Commission are positive. Notwithstanding this, 55% of the respondents feel the overall impact of the report on business will be negative. This is clearly the result of a high degree of concern focused on our personal tax system and related recommendations,” he said.
Elsewhere, more than 60% of those surveyed said the commission’s carbon tax proposals should be implemented in December’s budget. Over half of the respondents said the income tax proposals – including social welfare and PRSI – were the recommendations of most concern to them. A further 26% said that the pension recommendations were of most concern.
On the carbon tax proposals, PwC partner Ronan MacNioclais said: “Ireland ... should aim to be a global leader in the taxation framework for energy generally and in the support of the renewable energy sector in particular.”
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