• Current students
      • Student centre
        Enrol on a course/exam
        My enrolments
        Exam results
        Mock exams
      • Course information
        Students FAQs
        Student induction
        Course enrolment information
        F2f student events
        Key dates
        Book distribution
        Timetables
        FAE elective information
        CPA Ireland student
      • Exams
        CAP1 exam
        CAP2 exam
        FAE exam
        Access support/reasonable accommodation
        E-Assessment information
        Exam and appeals regulations/exam rules
        Timetables for exams & interim assessments
        Sample papers
        Practice papers
        Extenuating circumstances
        PEC/FAEC reports
        Information and appeals scheme
        Certified statements of results
        JIEB: NI Insolvency Qualification
      • CA Diary resources
        Mentors: Getting started on the CA Diary
        CA Diary for Flexible Route FAQs
      • Admission to membership
        Joining as a reciprocal member
        Admission to Membership Ceremonies
        Admissions FAQs
      • Support & services
        Recruitment to and transferring of training contracts
        CASSI
        Student supports and wellbeing
        Audit qualification
        Diversity and Inclusion Committee
    • Students

      View all the services available for students of the Institute

      Read More
  • Becoming a student
      • About Chartered Accountancy
        The Chartered difference
        Student benefits
        Study in Northern Ireland
        Events
        Hear from past students
        Become a Chartered Accountant podcast series
      • Entry routes
        College
        Working
        Accounting Technicians
        School leavers
        Member of another body
        CPA student
        International student
        Flexible Route
        Training Contract
      • Course description
        CAP1
        CAP2
        FAE
        Our education offering
      • Apply
        How to apply
        Exemptions guide
        Fees & payment options
        External students
      • Training vacancies
        Training vacancies search
        Training firms list
        Large training firms
        Milkround
        Recruitment to and transferring of training contract
      • Support & services
        Becoming a student FAQs
        School Bootcamp
        Register for a school visit
        Third Level Hub
        Who to contact for employers
    • Becoming a
      student

      Study with us

      Read More
  • Members
      • Members Hub
        My account
        Member subscriptions
        Newly admitted members
        Annual returns
        Application forms
        CPD/events
        Member services A-Z
        District societies
        Professional Standards
        ACA Professionals
        Careers development
        Recruitment service
        Diversity and Inclusion Committee
      • Members in practice
        Going into practice
        Managing your practice FAQs
        Practice compliance FAQs
        Toolkits and resources
        Audit FAQs
        Practice Consulting services
        Practice News/Practice Matters
        Practice Link
      • In business
        Networking and special interest groups
        Articles
      • Overseas members
        Home
        Key supports
        Tax for returning Irish members
        Networks and people
      • Public sector
        Public sector presentations
      • Member benefits
        Member benefits
      • Support & services
        Letters of good standing form
        Member FAQs
        AML confidential disclosure form
        Institute Technical content
        TaxSource Total
        The Educational Requirements for the Audit Qualification
        Pocket diaries
        Thrive Hub
    • Members

      View member services

      Read More
  • Employers
      • Training organisations
        Authorise to train
        Training in business
        Manage my students
        Incentive Scheme
        Recruitment to and transferring of training contracts
        Securing and retaining the best talent
        Tips on writing a job specification
      • Training
        In-house training
        Training tickets
      • Recruitment services
        Hire a qualified Chartered Accountant
        Hire a trainee student
      • Non executive directors recruitment service
      • Support & services
        Hire members: log a job vacancy
        Firm/employers FAQs
        Training ticket FAQs
        Authorisations
        Hire a room
        Who to contact for employers
    • Employers

      Services to support your business

      Read More
☰
  • Find a firm
  • Jobs
  • Login
☰
  • Home
  • Knowledge centre
  • Professional development
  • About us
  • Shop
  • News
Search
View Cart 0 Item

Knowledge centre

  • Home/
  • Knowledge centre/
  • Tax/
  • Thought leadership
☰
  • Tax
  • Taxsource Total
  • Tax newsletter
  • Tax news
  • Representations
    • 2025
    • 2024
    • 2023
    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
  • Tax.Point
  • Chartered Tax library - tax legislation
  • Making Tax Digital
    • Home
    • Tools and resources
    • News
    • Legislation and other guidance
    • Related reading
  • Local Property Tax
  • Tax for returning members
  • Tax CPD
  • Thought leadership
  • Useful links
  • BEPS centre
    • BEPS home
    • Representations
    • OECD

Thought leadership

Brian Keegan, Director of Advocacy & Voice writes a weekly column in the Sunday Business Post

Tax RoI
(?)

Economic overview of Ireland and Northern Ireland published

The Economic and Social Research Institute (ESRI) recently published its report Economic Overview of Ireland and Northern Ireland which provides a high-level comparison of the economies of Ireland and Northern Ireland (NI) over recent years. The report outlines similarities and differences between the two economies in terms of economic growth, labour market trends, living standards, education, health, general well-being and economic structures. The report highlights, that over recent years, the disparity in economic performance and well-being indicators between Ireland and NI is widening with the economy in Ireland displaying stronger economic growth and higher wages and living standards. Some of the key findings in the report are as follows: Ireland's population is growing faster than NIs, largely due to strong net migration in recent years. This has resulted in Ireland having a younger population, with a lower old-age dependency rate. There have been shifts in the labour market over time.  Labour market participation in Ireland has increased significantly since 2010, widening the gap with NI.  In 2022, the participation rate of those aged 16-64 was 76.8 percent in Ireland compared to 72.4 percent in NI. Employment rates in Ireland overtook NI in the period after the financial crisis, reflecting Ireland’s strong recovery. Ireland’s modified gross national income per capita in 2022 was 57 percent higher than NI’s gross domestic product per capita, reflecting stronger economic growth. In terms of wages, the data show a positive gap favouring Ireland, with hourly earnings 36 per cent higher than in NI in 2022. While Great Britain (GB) remains NI’s largest trading partner, NI’s trade with GB has declined since 2015, while trade with Ireland has increased. On a per capita basis, NI residents pay significantly lower personal income tax than those in Ireland (€2,980 in NI vs. €6,725 per capita in Ireland). Corporate tax receipts per capita in Ireland (€5,760) are over five times those in NI (€1,018), reflecting the dominance of multinationals.

Apr 28, 2025
READ MORE
Tax RoI
(?)

New action plan on competitiveness and productivity

The Minister for Enterprise, Tourism and Employment, Peter Burke recently announced the development of a new whole-of-government Action Plan on Competitiveness and Productivity, together with a range of measures aimed at enhancing business resilience and fostering competitiveness. The Programme for Government mandated the development of the Action Plan on Competitiveness and Productivity and by expediating this plan, the Government intends to align key decisions with the upcoming budgetary process.  The Government has also approved certain high-level short-term measures for implementation by May 2025, some of which are mentioned below: Enhancing International Trade Promotion: Actions will include a focus on implementing enhanced advisory supports for exporters facing disruption, developing a strategic approach to market diversification, and bringing forward a National Semiconductor Strategy. Addressing Business Costs:  Measures announced include adjusting the implementation timeline for the Living Wage to 2029 while outlining the Government’s continued commitment to the introduction of a Living Wage during its term. Amongst other measures announced, a new Cost of Business Advisory Forum will be established, and a Small Business Unit will be created. Improving Energy Infrastructure: Steps are to be taken to provide policy certainty regarding data centres, publish plans for connecting large energy users to the grid and to accelerate the deployment of critical electricity grid infrastructure. Commenting on the Action Plan, Minister Burke said: “We are living in a time of significant global change, marked by growing geopolitical tensions, trade uncertainties, and persistent cost pressures affecting businesses both large and small. To safeguard our economic future and support our enterprises, we must act decisively on the domestic factors we can influence. Therefore, the government has today agreed to fast-track the creation of a vital Action Plan on Competitiveness and Productivity, aiming to produce a draft within 12 weeks for discussion at a Ministerial Summit in July. This plan will identify concrete, actionable reforms across government to enhance our competitive edge. As part of this plan, we are implementing a range of immediate, targeted measures by May 2025. These actions focus on key areas including enhancing international trade promotion supports for firms facing disruption, addressing business costs through regulatory adjustments and targeted initiatives, and improving energy security and infrastructure delivery.”

Apr 22, 2025
READ MORE
Thought leadership
(?)

VAT and Consumer Behaviour

 Originally posted on Business Post, 2 August 2020.Increases in VAT usually pass the acid test of tax policy – the extraction of the most amount of money with the least amount of complaint.  Compared to an income tax increase, the general population rarely gripes about increases in VAT rates.  Hiking the standard rate of VAT of 21% to 23% in 2012 generated hardly any noise compared to the introduction of USC and the reduction of allowances and credits the previous year.  So will people really notice the VAT decrease of 23% to 21% in the July Jobs Stimulus? VAT is a truly European tax in that the rules are devised in Brussels and then implemented in EU member countries.  It is Brussels that decides that the maximum rate of VAT cannot exceed 25%. .  European rules tell us that a box of teabags is charged 0% VAT, but a cup of tea in a café is charged 13.5% VAT while a tin of iced tea in the supermarket is charged 23% VAT.  There’s little enough any Irish government can do to tinker with the VAT system, except make marginal rate adjustments. VAT is a major contributor to the Irish Exchequer.  In 2019, over €15 billion was collected in net VAT receipts which is more than one quarter of the total tax receipts for that year, yet it is a notoriously blunt instrument of public policy.  No VAT is charged on the clothes of the children whose parents are on social welfare, but no VAT is charged either on the clothes of the children of high earners.  Maybe that’s why governments avoid using it for public policy purposes unless you include the now defunct 9% rate of VAT for the hospitality sector.    So it was all the more surprising that the July stimulus knocked two percentage points off the main VAT rate.  The cost of this measure is €440 million, which is a little less than 10% of the total value of the package.  This estimate for the cost of this six month VAT reduction period is in line with Revenue estimates for good years.  In a moribund economy the Department of Finance seems to expect a spending spree.  Remember too that the 23% rate only applies to about half of the items or services we buy.  The rest are charged at lower rates or are exempt. Outside of the retail sphere, the education sector and the banking sector pay sizeable amounts because their activities are largely VAT exempt.  These sectors cannot recover the VAT they pay on purchases because they don’t charge VAT on their sales.  In the main VAT is therefore a consumption tax ultimately falling on the consumer.  So will the VAT reduction boost sales of clothing, alcohol, electrical and other household goods and luxury foodstuffs which fall into the 23% VAT category?  It might not, even if businesses pass on the VAT rate reduction to their customers.  Despite suggestions otherwise from some political quarters, Minister for Finance Paschal Donohoe was quite clear that the 2% reduction should be passed on to consumers.  That's not going to make a huge difference for many items because the value of a 2% VAT reduction approximates to about €1.60 for every €100 spent.  It only becomes a different story if you go out to buy a big-ticket item like a car, where the VAT saving could perhaps insure it for a year. There is no law obliging traders to reduce their prices because there has been a reduction in the VAT rate.  As long as they charge the correct amount of VAT at the correct time, they can take whatever margin they wish.  Past history however suggests that small VAT reductions like the current 2% reduction tend not to get passed on to consumers.  Part of the rationale when the 9% rate of VAT on hospitality was introduced was that a full 4.5% reduction to the normal 13.5% rate would be visible and palpable and therefore consumers would expect to see the difference.So even if it is passed on, a 2% VAT reduction may be inadequate to drive additional volumes of consumer spending.  In terms of business benefit it might have been better to apply the projected €440 million cost towards reducing the vast amounts of VAT debt currently being warehoused against the day when businesses can finally pay their tax liabilities.  Given that the EU state aid restraints are temporarily lifted, that €440 million could have been targeted, for example, specifically to forgive some of the historical VAT due from the SME sector.  The July Jobs stimulus was good.  Ministers and their officials alike did well to deliver what in effect is a full scale national budget in the space of few weeks.  The purpose and rationale of many of the measures like the extension of the wage subsidy, the extension of the pandemic unemployment payments, and the extinguishing of commercial rates is readily apparent.  The object of this VAT reduction is not as clear. I've never seen a tax reduction I didn't like.  However, many consumers may not notice this tax reduction and many businesses could benefit more from this element of the jobs stimulus if the cost of the VAT reduction was diverted to reducing their current and not their future tax debts.  Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland

Aug 13, 2020
READ MORE

The latest news to your inbox

Please enter a valid email address You have entered an invalid email address.

Useful links

  • Current students
  • Becoming a student
  • Knowledge centre
  • Shop
  • District societies

Get in touch

Dublin HQ

Chartered Accountants
House, 47-49 Pearse St,
Dublin 2, D02 YN40, Ireland

TEL: +353 1 637 7200
Belfast HQ

The Linenhall
32-38 Linenhall Street, Belfast,
Antrim, BT2 8BG, United Kingdom

TEL: +44 28 9043 5840

Connect with us

Something wrong?

Is the website not looking right/working right for you?
Browser support
CAW Footer Logo-min
GAA Footer Logo-min
CCAB-I Footer Logo-min
ABN_Logo-min

© Copyright Chartered Accountants Ireland 2020. All Rights Reserved.

☰
  • Terms & conditions
  • Privacy statement
  • Event privacy notice
  • Sitemap
LOADING...

Please wait while the page loads.