Income tax on self-employed should be lowered – Irish Tax Institute
Published 25/09/2013 | 13:08
THE income tax imposed on the self-employed should be lowered to stop those who work for themselves paying more than those in employment.
And proposals to heap more social insurance on the self-employed will only be an impediment to job creation, the Irish Tax Institute said today.
The self-employed pay more tax than an employee if they earn over €100,000 because there is a higher universal social charge imposed on them.
And a Government advisory body commended that the self-employed should have to pay higher pay related social insurance to fund more benefits for those who work for themselves.
Mark Redmond of the Irish Tax Institute said the increase was suggested earlier this month in the Mangan Report (Report of the Advisory Group on Tax and Social Welfare) in return for enhanced social welfare benefits.
“The self-employed, who number over 300,000 are already paying a marginal tax rate of 55% compared with 52% for employees”, said Mr Redmond.
He said that the tax disparity is also prevalent at lower income levels.
“A self-employed single person on an income of €15,000 pays almost six times as much tax and PRSI as an employee on the same income”.
Mr Redmond said that the ESRI had, in a report published earlier this year, already questioned the disparity between the self-employed and employees on the grounds of equity.