There has been mixed reaction to the recommendations contained in the Commission on Taxation and Welfare report published today.
The Commission was established by the Minister for Finance in April of last year with a remit of independently considering how best the tax and welfare systems can support economic activity and promote increased employment and prosperity.
The Irish Congress of Trade Unions said it supported the core finding of the Commission on Taxation and Welfare that taxes and social insurance contributions will need to rise to meet long-term budgetary challenges.
"The Commission has identified a range of revenue-generating measures targeting wealth, capital income, self-employed income and unfair tax breaks," said ICTU General Secretary Patricia King.
"However, Congress is gravely concerned that a range of unfair tax supports that favour high-income individuals and businesses are recommended for retention," she added.
ISME expresses concern at tax report
The Irish SME Association (ISME) has expressed concern at today's report.
"ISME's greatest concern about the Commission on Taxation and Welfare report is that its only or overriding brief is the acquisition of further revenue, while at the same time the Exchequer appears to be incapable of securing efficient and effective expenditure of State revenues," it said in a statement.
According to ISME, the Department of Public Expenditure and Reform must become far more activist in securing value for money for citizens and must re-establish the "reform" element of its mandate.
Neil McDonnell, CEO of ISME said the proposal to impose a higher rate of PRSI on the self-employed would seem to run counter to any strategy to increase entrepreneurship in Ireland.
"It ignores the fact that self-employed and PAYE workers both pay 4% PRSI into the social fund," he said.
ISME said the Commission's proposals to reform of the R&D Credit, the KEEP and EII schemes are welcome and long overdue.
It also welcomed the proposal to replace commercial rates with a site value tax, among other measures contained in the report.
'Unlikely we'll see tax recommendations implemented in the short term'
Tom Woods, Partner and Head of Tax in KPMG Ireland described today's report as a menu of possible tax measures the Government could implement.
"However, as the Government is channelling all its efforts on policies to deal with spiralling inflation and the cost-of-living crisis, it is unlikely that we'll see the tax recommendations implemented in the short term," he added.
Mr Woods said the Government should carefully assess the burden of each recommendation including the broader economic impact on Ireland’s competitiveness.
"The recommendations cover many areas, some of which are relevant to pension savings and entrepreneurship and their impact would need to be assessed," he said.
Proposals 'disproportionately' target farmers
IFA President Tim Cullinan said he believes the proposals within today's report disproportionately target farmers.
"These proposals cannot be factored into the upcoming budget, or any future budgets," he said.
"We fully understand the wider economic and demographic challenges facing the State. However, this report will only serve to cause uncertainty for farm families.
"It's very hard to plan farm succession or future investment with the level of uncertainty this report will cause," he said.
Mr Cullinan said many farms are already at breaking point.
"To give you some perspective, almost 60% of farms earned less than €20,000 in 2021," he said.
He said the IFA will be analysing the document in full.
"From a first look there are some very damaging and urban-centric proposals.
"Increasing taxes on agri diesel, reducing inheritance tax reliefs or increasing PRSI payments for farmers would be a further targeting of the agri sector.
"It would also be counter-productive economically as it will slow down both land transfer and on-farm investment," he said.
Mr Cullinan said he is also very concerned at the possibility of including agricultural land in any Site Valuation Tax.
"We have continually expressed our frustration that the Government did not include a representative from the farming sector on the Commission," he said.
"We raised our concerns about some of the leaks at our recent meeting with Ministers Donohoe and McGrath. Minister Paschal Donohoe has committed to meet with IFA on the report," he said.
Chambers Ireland: A 'holistic' approach is needed
Chambers Ireland has called for people to take a measured response to today's report.
Chief Executive Ian Talbot described the task of the commission as "enormous".
"Everyone should look at the report as a package of proposed reforms and avoid 'reverse cherry-picking' – the active seeking of measures to be unhappy about – we must evaluate the proposals in the round," he said.
"Ireland faces major fiscal sustainability challenges. Reform is needed if we are to overcome those challenges.
"It is not in the national interest to pretend we can take an à la carte approach to reforms because the fiscal hole will keep growing until we act," he added.