**Unlocking the Potential: Ensuring Fair Taxation for Irish Workers**
In a recent report from the Department of Finance’s Tax Strategy Group, it is revealed that indexing the personal tax system to account for rising wages could cost the exchequer over €1 billion annually. The government is considering changes to income tax that would prevent additional tax burdens on workers as their incomes increase.
The report outlines various scenarios, such as increasing tax credits and standard rate bands, which would require significant financial commitment. Despite this, the government has pledged to prioritize the indexation of credits and bands to protect workers from excessive taxation.
While Ireland’s tax system is considered progressive internationally, the report raises concerns about high marginal tax rates and their impact on work incentives and competitiveness. It also highlights the role of different sectors, such as multinational companies, in contributing to income tax and USC receipts.
Overall, the report emphasizes the need for a balanced approach to taxation that supports economic growth and fairness. As the government prepares for Budget 2025, the decisions made will have a lasting impact on Irish workers and the country’s fiscal stability.
*BLOG TAGS: taxation, income tax, fiscal policy, Department of Finance, Tax Strategy Group, Budget 2025*\
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