Ireland must expand its tax base to tackle wealth inequality and properly fund services, Social Justice Ireland has warned.
Ireland generated €127.9 billion in tax revenue in 2023.
Income tax (€32.9 billion), corporation tax (€23.8 billion) and VAT (€20.3 billion) accounted for over half of all revenue.
On Newstalk Breakfast this morning, Social Justice Ireland analyst Susanne Rogers said “there’s no question” that a broadening of the country’s tax base is necessary.
“If we want the type of services that we want, how do we pay for them," she said.
“As Ireland is changing, we need to really be looking at how we’re raising our taxes, and we really need to look at broadening our tax base.”
Concentrated tax base
She said the current tax base is “very concentrated” in where it sources revenue from.
“We’re looking at things like income tax, corporation tax, and VAT,” she said.
“But we are ageing, which means that there will be fewer of us in work over the next couple of decades and more and more pensioners and fewer and fewer people working.
“We need to be clever about this, unless we’re going to have the same headlines every summer that there aren’t enough school places for children and a conversation every winter about a trolley crisis.”
Public Expenditure Minister Paschal Donohoe and Finance Minister Jack Chambers. Image: Leon Farrell/© RollingNews.ieMs Rogers said there are ways to broaden the tax base without requiring low-income earners to pay more tax.
“If you look at things like tax expenditures, which is tax that we forego, there’s €7.1 billion there and that really needs an overhaul,” she said.
“Things like jet kerosene, capital acquisitions, the capital gains tax—there’s lots of different things.
“You could definitely have a look at enormous wealth creation just by revisiting our tax expenditures.
“This isn’t a conversation about people on low incomes.”
Homes
She said many people’s wealth is “captured” in their homes.
“We currently have property taxes at the moment and maybe we could look at something a bit fairer,” she said.
“We could have a site-value tax, a land-rent tax; something like that would be a fairer approach.
“We’ve done really well in this country smoothing out income inequalities, but we can still see there’s a massive wealth inequality—most of the wealth is with those top 20%.”
Budget 2025 is taking place on October 1st this year, a week earlier than usual.
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