Call for large firms to pay 6% profits tax

Ensuring large corporations pay 6% of their profits in tax would be one way of generating the revenue necessary to address “major infrastructure gaps” in areas such as water, broadband, energy, social housing, healthcare facilities and schools, Social Justice Ireland has said.

In its newly published 2015 Socio-economic Review, the think tank and advocacy organisation said the time had come for a debate on the country’s economic and social priorities in the years ahead. It said the choice had to be made as to whether to collectively pursue the public purpose “or return to the petty politics of private greed”.

Social Justice Ireland said the critical areas requiring investment now are: water, social housing, public transport, especially rural transport, roads, education, healthcare, energy, broadband and environment.

It said infrastructure and services are financed by taxation and private financial sources investing in the areas.

“There can be endless debate about the balance between these.

“If Ireland’s current deficits in infrastructure and services are to be addressed then Ireland’s total tax-take must be increased, which can be done while maintaining Ireland’s position as a low-tax country; there must be a substantial increase in the benefits accruing to the State where public investment has led to major gains for private sector entities; there is a need for off-balance sheet investment if current deficits are to be addressed.”

The think tank’s director Fr Sean Healy said Ireland was a low-tax country overall and there was scope to bring the country’s tax take up to 34.9% of GDP which would still keep it a low tax country as measured by Eurostat. He said one of the areas which could be looked at was corporation tax.

“That is not in increasing the rate but in ensuring there would be an effective tax rate that all corporations would pay at least 6% of their profits in tax,” he told RTÉ radio.

Fr Healy said SMEs were for the most part paying 12.5% with little in the way of tax breaks which were going to large corporates.

He said the effective rate of 6% which he was talking about would see an increase of €1bn in the overall tax take in a full year.

The organisation’s 343-page review makes a number of policy proposals for moving towards, what it said, would be a just society.

The group said measures must be taken to reduce poverty among vulnerable groups as well as prioritising their protection.

It said social impact assessments should be taken prior to the implementation of policy initiatives that impact on income and public services that many low income households depend on.

It called for the launch of a major investment programme which would focus on creating employment and prioritising initiatives that strengthen social infrastructure, including comprehensive school building and a much larger social housing programme.

The think tank also wants the roll out of the nine community healthcare organisations and 90 primary care networks intended to support primary care teams as envisaged in the 2015 HSE Service Plan.

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