Special tax deal to lure emigrants with 'high skills' home
Highly-skilled emigrants who left Ireland to find work overseas are to be lured home with a special tax deal potentially worth thousands of euro, the Irish Independent can reveal.
The Government is considering offering a 30pc tax rate to a range of graduates and entrepreneurs living overseas in a bid to become more competitive in the post-Brexit environment.
The plans, which have been devised by Jobs Minister Mary Mitchell O'Connor, also include tax incentives for graduates who purchase company shares as part of their transfer home.
At present, workers who purchase shares with their company pay tax immediately. Under the new measures, they would pay no tax until they divest from the shares themselves. This will bring Ireland in line with arrangements in place in the UK, government sources say.
The central plank of the proposals relate to a so-called emigrants tax.
Ms Mitchell O'Connor wants highly-skilled graduates to pay an effective rate of income tax of 30pc for a set period.
The lower tax rate would be aimed at those earning in excess of €75,000 in specialist jobs in areas like medicine, science, IT and finance.
The scheme would also apply to entrepreneurs in specialist sectors.
It would remain in place for a set period, expected to be five years.
"This is all about making it as attractive as possible for skilled workers who left Ireland during difficult times.
"The Budget has to do something to bring our emigrants home," said a Government source.
Government figures have emphasised that such a rate would only be extended to those in highly-skilled jobs.
The move is in response to complaints from highly-skilled workers living overseas that the marginal tax rate of just under 50pc is putting them off from returning home. The new effective rate of tax would be policed by the Revenue Commissioners.
Companies too have said workers are being put off from entering into share purchasing options because of the need to pay tax straight away.
However, such a package aimed at emigrants will prove controversial among the Irish workforce, particularly skilled workers who remained at home despite the recession.
Similar tax proposals were submitted by the former Jobs Minister Richard Bruton last year, but were later watered down by the Department of Finance amid fears they would infuriate workers who remained at home.
However, Ms Mitchell O'Connor is understood to have submitted revamped proposals, which now include the new share purchasing option.
In her submission to Finance Minister Michael Noonan, she has also urged him to slash the marginal rate of tax, particularly in the light of Brexit.
As a result of last year's Budget, the marginal rate of tax was brought down from 51pc to 49.5pc.
USC measures set to be introduced in the Budget will bring this rate down further.
Ms Mitchell O'Connor, who has announced more than 2,500 new jobs in recent days, focusses on the "effective rate" of tax in her submission.
Experts say a worker in Ireland who earns €75,000 per annum pays an effective tax rate of 36.5pc.
And a worker on €150,000 per year pays 44.6pc.
This means that under the minister's scheme, the higher a skilled graduate earns the better they will fare.
The Independent Alliance, meanwhile, is also pressing for a special package for emigrants.
Longford/Westmeath TD Kevin 'Boxer' Moran said it should include a "resettlement" package that will assist those who move home with the costs such a trip incurs.
"This Budget has to help emigrants, and it is a top priority," Mr Moran told the Irish Independent last night.
Goal is to halve unemployment
The Government wants to halve the number of unemployed people over the next five years, Social Protection Minister Leo Varadkar has said.
And while he acknowledged the risk presented by Brexit, he said he doesn't believe it will mean the Government won't be able to deliver the 200,000 new jobs it has promised by 2020.
Mr Varadkar was speaking at he launch of Jobs Week which will see 14,000 job-seekers attend more than 150 events around the country.
They include careers fairs, one-to-one job coaching, and seminars for employers.
Mr Varadkar said unemployment is down to 8.4pc from 15pc at its peak and that he wants to see the jobless rate halved again.
He said there will be a 20,000 reduction in long-term unemployment this year and that the live register will go below 300,000.
He said that while Brexit means predictions of economic growth have been reined in, the Government doesn't think it needs to reduce its projections for job growth at this stage.