The proposal has been dismissed by Labour and Fianna Fáil in recent days but the new party plans to make it a central part of their general election campaign.
Renua held a mini-conference in Dublin yesterday on the issue of flat tax where the experts also warned that Ireland’s current tax regime has seriously damaged our capacity to create jobs and facilitate entrepreneurs.
Speaking at the event, KPMG’s Conor O’Brien said: “A small open economy like Ireland can benefit greatly from a flat tax system.”
Economist Jim Power said that a flat tax could seriously boost economic activity but “the political system is seriously opposed to anything innovative”.
Cora O’Brien, director at the Irish Tax Institute, said: “The number one issue in terms of attracting talent and investment to Ireland is personal taxation”.
Ian Lucey, a start-up entrepreneur, warned that: “If I want to hire the best international talent it is really hard because of our high income tax”.
He said when it came to tax, the Government was behaving like the sheriff of Nottingham.
Mr Lucey also warned that “from the view of the tech sector Ireland has missed the boat. They’re going to London instead of Dublin.”
Mr O’Brien also warned that when it comes to attracting jobs, Ireland as a peripheral location had to offer a better deal than centres such as London.
Speaking at the event, Renua leader Lucinda Creighton said a flat tax could transform the domestic economy.
The flat tax, if implemented, would result in those on lower incomes paying more tax if the rate was applied without any balancing measures. At present the effective rate of tax for somebody earning €18,000 a year is 3.9% and it is only at €35,000 that the effective rates are close to the proposed flat rate tax.
The party will propose a tax rebate for lower income households, done on a sliding scale to avoid income cliffs. Child benefit would remain unchanged.
Labour and Fianna Fáil have dismissed the proposal, saying it would mainly benefit the richest in society.
Junior minister Kevin Humphreys said: “Right-wing republican candidates in the US are fans of flat taxes as they benefit the ‘fat cats’ at the top, but even Donald Trump thinks this radical form of tax policy is too unfair.”