APRIL BUDGET:THE GOVERNMENT needs to reduce employers' PRSI contributions and introduce a double tax deduction on staff costs to stimulate the jobs market, the Irish Taxation Institute (ITI) said in its pre-budget submission yesterday.
The institute said jobs were the key to economic recovery and, by assisting employers, the Government could stem the rate of losses and increase tax revenue.
ITI’s submission said any tax increases used to address the exchequer deficit should be matched euro for euro by reductions in public spending. It called on Minister for Finance Brian Lenihan to abolish tax levies and to introduce a “simple sustainable basis for taxing individuals” from next year.
ITI chief executive Mark Redmond said that, by focusing on employment and introducing a clear plan for recovery, most people would support tough measures. “Our message to Government is that a focus on maintaining jobs combined with simplicity, evidence of stimulus and a strategic long-term plan for recovery are the things that will resonate best with all sectors and will get everybody aligned in support of the changes required.”
The ITI’s submission advised against changes to the current tax measures for pensions. “Now is not the time to remove any assistance to taxpayers to fund their own pensions, thereby reducing the future burden on the State,” it added.
The Irish National Organisation of the Unemployed (INOU) also warned the Government not to penalise job creation and maintenance. In its pre-budget submission, the organisation said unemployment should be treated with the same degree of urgency as that given to addressing the financial crisis.
The INOU said the Government must “foster new and innovative approaches to Ireland’s unemployment crisis” and “resist the easy option of reducing critical expenditures in the short term, only to add considerably to the burden in the longer term”.
It called on the Minister not to reduce social welfare payments, as “unemployed people are at considerably higher risk of poverty when compared to others in Irish society”.
The organisation also said the eligibility criteria for schemes like the Back to Work Allowance, the Part-time Job Incentive Scheme and Revenue Job Assist should be reduced to six months. By improving access to these schemes, the Government could facilitate the calls for reduction in employers’ PRSI contributions, the INOU said.
There should be “significant integration” between the Departments of Education, Social and Family Affairs and Enterprise, it said, to match the labour force with employment opportunities.
Meanwhile, the Irish Auctioneers and Valuers Institute (IAVI) called on the Government to “urgently find a mechanism to take account of the toxic assets of banks”.
IAVI president Edward Carey said that, until the banking sector declares its bad debts, “the economy will remain in a stranglehold”. He said: “Without the details of the extent of these bad debts, funding from international lenders is at a standstill.
“This stagnation is unacceptable; until the banks’ loan books are written down it is unlikely that we can move on from this phase.”
Mr Carey warned that if the Government plans to introduce a property tax it should either abolish stamp duty or face market activity “being quashed”.
He called on Mr Lenihan to consider introducing a tax relief or rebate in VAT for first-time buyers.
