In its pre-budget submission, the Irish Congress of Trade Unions has called for the 12.5 per cent corporation tax rate to be raised to 20 per cent and for clawback measures to offset ‘the windfall gains to the corporate and business sector’. ICTU identifies financial and retailing sectors as some of the main beneficiaries of the 12.5 per cent rate, sectors which were not ‘the intended beneficiaries’.
At its 1999 Conference, a resolution was adopted calling for a new standardised rate of corporation tax of 20 per cent.
The ICTU proposal comes shortly after the ESRI recommended that corporation tax should be raised to 17.5 per cent after 2010, when the 10 per cent rate for manufacturing ends.
The pre-budget submission from the union side of social partnership adds that ‘In addition to reviewing the rate upwards to 20 per cent, Congress is also proposing that alternative means of raising taxation from the business sector be put in place’. One of these now proposed is the raising of employers’ PRSI contributions by one per cent. ICTU argues that ‘Employer social insurance contributions in Ireland amount to less than 9 per cent of total taxation by comparison with an average of about 15 per cent in OECD countries and over 16 per cent in EU countries.’
Unless the tax take from business is kept up, ICTU warns, there will be ‘the unacceptable situation where the corporate and business sector will bear an ever decreasing share of taxation.’
ICTU calls for Statutory Codes of Conduct to be introduced for financial institutions and ‘the associated’ professional groups (accountants, auditors, legal and financial consultants). It is ‘now clear beyond any doubt that they are incapable of self-regulation’, contends ICTU.
Additionally, a ‘specific levy’ on financial institutions should be considered, ‘which might go some way towards restoring their credibility with the public’, the submission states.
ICTU does not support the current campaign for the total abolition of Capital Acquisitions Tax on principal, private residences (see Tax Monitor, page 25). |
