The Report of the Commission on Taxation and Welfare has been published. The Commission was tasked to review how best the taxation and welfare system can support economic activity and income redistribution, whilst promoting increased employment and prosperity in a resilient, inclusive, and sustainable way, ensuring that there are sufficient resources available to meet the costs of public services and supports in the medium and longer term. A key message of the report is that, over time, the overall level of taxation as a share of national income will have to increase. The Commission recommends broadening the base within and across most tax heads to secure sustainability of the taxation system against future challenges.
The Commission calls for increasing the yields from taxes that are less distortionary, promote environmental goals and enhance the overall progressivity of the system. In order to achieve this, the Commission proposes that the balance of taxation must shift away from taxes on labour and towards taxes on capital, wealth, and consumption, with a strengthening of the PRSI system also required.
Welcoming the report, the Minister for Finance, Paschal Donohoe said:
"The report is a significant body of work running to more than 500 pages and containing 116 recommendations. This report poses serious questions that we as a society must carefully consider and the recommendations will foster real debate around how we reform our taxation and welfare systems over the longer term in order to safeguard their sustainability and adapt to a rapidly changing environment.
Given the significant and wide-ranging recommendations contained in the Report, it is important to allow for detailed consideration of the recommendations. It is my intention to discuss the Report with my government colleagues over the coming weeks and outline an initial response as part of my Budget day statement.”