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Poorest 'pay a bigger share of tax burden'

Ireland's poorest people pay a bigger share of their income in tax than Ireland's wealthiest citizens.

VAT, excise duty, and other taxes on spending result in people with the lowest incomes paying the highest proportion of their income to the taxman.

New research revealed that 30pc of income of the most impoverished people is swallowed up in tax.

Ireland's richest residents pay an average of 29.5pc of their incomes in all forms of taxes.

Dr Michael Collins, of the Nevin Economic Research Institute, analysed data from the Household Budget Survey to discover how much tax people really pay.

He studied the total amount of income tax, social payments, VAT, excise and levies being paid by all economic groups.

Mr Collins, a former member of the Commission on Taxation, said: "Too often considerations of the taxation system are focused on income taxes, or income-related taxes like social insurance."


"The oft-cited phrase 'taxpayers' is generally taken to mean income taxpayers rather thanits more appropriate meaningof all those paying taxes - whether from income, expenditure or other contributions," he said.

The average tax paid by all Irish people, in direct and indirect tax, is 24pc of gross income.

When it comes to income tax alone, the top 10pc of earners pay 23pc, contrasted with 0.3pc paid by the bottom 10pc of earners.

Overall, people on lower middle incomes pay the least amount of tax overall.

Dr Collins said the Government needs to think more broadly when considering changes to taxation.

Speaking on RTÉ's Morning Ireland today, Dr Collins said if the Government wanted to assist more people, it would be better to lower indirect taxes, such as the 23pc VAT rate.

He said the tax system should be looked at broadly as a system, not just an income tax system.