Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank Deputy Devlin who has raised issues that are very important to the future of our income tax code, including the recognition of the ambition to move to a circular economy and the importance of schemes and supports for retrofitting. He also mentioned specific sectors of our economy.

It is worth highlighting the specific income tax and USC recommendations that were made by the Commission on Taxation and Welfare. This was an enormous body of work and the report is one that we should all take seriously. We must very closely examine the recommendations that the commission made. It recommended that the Government should focus on maintaining the progressivity of the existing personal taxes system. Without further erosion of the income tax or USC, future base-broadening reforms should focus on PRSI and on addressing horizontal equity concerns. To promote equity and sustainability, preferential income tax or USC treatment based on factors such as age or personal characteristics should be phased out, according to the commission. As far as possible, and with limited exceptions, income tax and PRSI charges should be based on income only and different types of income should be treated equally. The commission made a number of other recommendations in relation to cliff edges, the USC, individualisation and other issues as well.

See this speech in context