Business lobby group Isme has called on the government to undertake a comprehensive package of tax reform in the next budget.
n its pre-budget submission, Isme has urged Finance Minister Paschal Donohue to include a solidarity USC levy of 3pc on all PAYE workers who earn over €100,000 per annum.
The proposed reform would also include lowering capital gains tax (CGT) to 25pc which Isme states will raise any additional €500m annually.
“We believe our proposals on USC and CGT would raise an additional €800m per annum for the exchequer,” said Neil McDonnell, Chief Executive of ISME.
Isme also suggested the elimination of the PRSI transition zone for lower paid workers and replacing it with a PRSI rate of 2pc on weekly earnings up to €440 per week. Earnings above €440 a week would then be charged 6pc.
The lobby group estimates that this change would increase the take-home pay for all full-time workers who currently earn less than €880 per week.
Isme, which represents small and medium sized businesses, has also suggested that any government spending used to mitigate ongoing inflationary pressures should be focused on those most in need via the social protection system.
Other measures proposed by Isme include an encouragement from the government to increase the number of firms opting to list on the Stock Exchange, as well as making it easy for employees to invest in such companies.
The group also spoke out against the trend of employers buying accommodation for staff, arguing that the government must help attract private landlords back to the rental market through the taxation system. Isme also said the government must address the cost of financing deep retrofit in the budget due to its expense.
“With economic data showing a continuing divergence between the GDP economy, including the multinationals, and the domestic economy, which is mostly SMEs, we need a comprehensive stakeholder review of indigenous industrial policy to improve the performance of our SME sector,” added McDonnell.