By Ann Marie Foley - 18 June, 2014
Call for large corporations to pay at least 6% of their profits in corporation tax.
Budget 2015 should protect the vulnerable and ensure that all corporations pay an effective rate of tax, according to Social Justice Ireland (SJI) which has published its own proposed budget for 2015.
“The Government has choices to make in budget 2015. It should protect the vulnerable, invest in social housing and disability services and complete the roll-out of rural broadband, while bringing borrowing below 3% of GDP,” Dr Seán Healy, Director S JI, said at the launch of the Policy Briefing, entitled ‘Budget Choices’.
One proposal SJI makes is that corporations pay at least 6% of their profits in corporation tax.
Dr Healy told CatholicIreland.net that Irish SMEs (Small to Medium Enterprises) who employ the greatest number of people pay close to 12.5% tax but the large multinationals pay “nowhere near” that.
He said they use a term “taxable profits” whereas all profits should be taxed.
In relation to recommendations from The Irish Fiscal Advisory Council that the planned €2 billion adjustment for Budget 2015 should be implemented he said: “It is not clear at this point what adjustment will be required in October.”
He explained that for this reason the Budget Choices document includes three scenarios: if there is a €2 billion adjustment, a €1 billion or no adjustment.
In this Budget Choices briefing, SJI outlines how all of its proposals can be financed while reducing borrowing to below 3% GDP in 2015. All the costings are based on Government calculations and reliable research.
The proposals include:
• A €250m investment to address the social housing crisis.
• A €200m investment in broadband focused on rural areas.
• Significant additional investment in disability services.
• A minimum effective corporation tax rate of 6% (i.e. no corporation would pay less than 6% of their profits in corporation tax) as a step towards ensuring large corporations pay a fair share of tax (while Ireland’s corporate tax rate is 12.5 per cent this is not paid by all multinational companies).
• An increase of €5 a week in the PAYE tax credit and in the basic social welfare rates to go towards addressing the increase of between 5% and 8% since 2008 in the cost of providing a minimally adequate standard of living.
• A reduction in borrowing to below 3% of GDP.
• 19 further initiatives covering a wide range of policy areas.
“To date, Government’s approach has protected the rich at the expense of the rest of society. There is an urgent need to reverse the regressive nature of each of the budgets introduced by the current Government since they came to office in 2011,” Dr Healy said.
“It would be fair and just and would be seen as such,” she said.
Back in March when the Government made tax proposals, SJI stated that the 20 percent income tax band should not be widened nor the top tax rate reduced in Budget 2015.
At that time SJI clarified that their priority for Budget 2015 is not reducing taxes, but said that the best option in their opinion is to allow tax credits be refundable, stating that the main beneficiaries would be the low-paid employees.
The date for the announcement and publication of Budget 2015 is 14 October 2014 and most of changes announced in Budget 2015 will take effect from January 2015.