Assistance for the middle income earner will boost productivity and drive economic growth – Chartered Accountants Ireland on Budget 2018

Oct 10, 2017
Shauna Greely President Chartered Accountants Ireland
“Budget 2018 makes steady progress in reducing high rates of tax for low- and middle-income earners but there is still some way to go before Ireland finds the sweet spot to protect us against the challenges of Brexit” according to Chartered Accountants Ireland President Shauna Greely.

“The changes to the income tax rate band moving from €33,800 to €34,550 for single individuals for example and the USC for those on the average wage are positive as this cohort faced a sharp income tax hike on moving from the 20% rate band to the 40% rate band.  The changes will encourage greater productivity and business activity as extra income from overtime and bonuses won’t all be eaten up by tax, USC and PRSI.  However, it’s disappointing that the self-employed taxpayer still doesn’t enjoy the same tax credits as employees.  

"The increased rates of stamp duty on commercial property transactions must be balanced with appropriate reliefs for business assets passing from one generation of a family to the next.  In the absence of a relief for family businesses, the suite of other tax reliefs aimed at encouraging a more youthful and entrepreneurial family business profile will be damaged.”  

Ms Greely notes that Brexit concerns for Irish businesses which trade in UK imports were not adequately addressed in the Minister’s speech.  While financial assistance for the SME and Agri-food sectors are positive, Chartered Accountants Ireland calls for a change to VAT import rules to deal with upfront VAT costs under the current system which will take effect when the UK leaves the EU. It’s extremely disappointing that this measure was not mentioned in today’s speech and Chartered Accountants Ireland calls for this to be reconsidered at Finance Bill stage.  

Chartered Accountants Ireland acknowledges the Minister’s commitment to the 12.5% corporation tax rate.  “It’s important that we do not lose sight of the fact that Ireland is already unique among developed nations in the high proportion of corporation tax collected relative to other taxes”. Ms Greely notes that “while we will continue to operate in line with best international practice, the needs of the Irish Exchequer and Irish work force should be the main drivers of any changes to our corporation tax offering.”

ENDS

Reference: Brian Keegan, Director of Taxation, Chartered Accountants Ireland +353 1 637 7347