High tax is 'disincentive' to work - Harris

Monday 25 August 2014 19.22
Simon Harris said it is not clear what flexibility exists for the Government in its two remaining budgets
Simon Harris said it is not clear what flexibility exists for the Government in its two remaining budgets

Minister of State at the Department of Finance Simon Harris has said he hopes consideration is given to widening income tax bands in the next Budget.

Speaking on RTÉ's News at One, Mr Harris said that many people are paying the higher rate of tax and that this is proving to be a disincentive to work.

"It is very clear to say that over the last number of months Government have had an open discussion in relation to the fact that many people are paying the marginal rate, a very high rate of tax, at a very low entry point," he said.

"Certainly from my conversation as I've been travelling around the country is that is becoming a disincentive to work.

"Where people who work the extra hours in overtime are really feeling that so that much of this is going into tax.

"I think it is important that we have a conversation about the marginal rate of tax, about the entry point to it.

"That is something I'd like to see considered and looked at in the run-up to the Budget," he added.

Mr Harris also said that the Statement of Government Priorities, published in July, outlines a commitment to improve working and living standards for citizens.

He said tax is an element within this commitment.

Speaking in relation to comments by the Irish Tax Institute, which said that cutting the Universal Social Charge would benefit the widest number of people instead of reducing income tax, Mr Harris said he would welcome any method that would assist workers.

However, he said it is not yet clear what economic flexibility exists for this Government in its two remaining budgets.