'Tax discriminates against self-employed'
Discrimination in the Irish tax system against the self-employed is threatening entrepreneurship the president of the Institute of Certified Public Accountants has said.
Mr Norman J. Adams warned that action needs to be taken if the entrepreneurial culture that has been the "corner stone" of Ireland’s economic success is not be threatened.
Addressing the CPA’s annual conference in Dublin, Mr Adams said that the tax system discriminates heavily against the self-employed, the group that is the bedrock of Ireland’s entrepreneurial culture.
"We have a deeply discriminatory and unfair situation that young entrepreneurs who are paying themselves a very modest salary, as most young entrepreneurs do to ensure that they can invest in their business, will find that they paying three times as much tax, PRSI and levies as an employee with the same income.
"Somebody earning €20,000 as an employee will have just over €1,000 deducted from his or her earnings by the Government while a self-employed person with the same taxable income will see more than €2,800 deducted.
"Young entrepreneurs are, in effect, being penalised for taking the risk of starting a business, at the very time when they need financial support the most.
"And while discrimination may not be as pronounced for higher taxable incomes, it is still the case that a self-employed earning €40,000 will have 21% more deducted, in the form of tax, PRSI and levies," said Mr Adams.
"Ireland has benefited hugely from new business start-ups over the past two decades and it is arguable that Ireland’s economic success is founded on the efforts of people who have been prepared to take a risk and set up their own business," Mr Adams stated.
"There is surely no justice in penalising the risk takers in the form of excessive state deductions from their income while people who are employed and who are taking no financial risk benefit at their expense."
