Launch of 'Your Vision, Our Future', the public consultation of the Commission on Taxation and Welfare

How to make your voice heard
What happens next
Notes

Your Vision, Our Future opens today, 20 October 2021. It is the public consultation of the Commission on Taxation and Welfare (the Commission) and is seeking opinions on various elements of our taxation and welfare systems, in particular views on how public services are funded into the future.

Speaking today, the Chair of the Commission Professor Niamh Moloney said:

"Through the establishment of the Commission on Taxation and Welfare, Government has given us the opportunity to influence our shared future and help position our tax and welfare systems to meet future challenges and to build on opportunities arising. Everyone can engage with the Your Vision, Our Future platform at cotw.citizenspace.com."

The Commission was established earlier this year and is an independent body tasked by Government to “review how best the taxation and welfare system can support economic activity and income redistribution, whilst promoting increased employment and prosperity in a resilient, inclusive and sustainable way and ensuring that there are sufficient resources available to meet the costs of public services and supports in the medium and longer term.” The specific terms of reference for the Commission can be found at gov.ie/cotw.

Our taxation system provides the investment we make as a people for the public services we use - from our roads and bridges, to our hospitals and schools. More than simply a revenue-raising facility, our taxation system is a fundamental element of the apparatus of the State, influencing behaviour and driving economic activity.

For those of working age, our social welfare system serves to temporarily replace income lost to periods of unemployment, injury, disability, sickness or maternity. Our social welfare system has a crucial role in cushioning sudden income loss, supporting families and encouraging employment for people in all situations.

The tax and welfare systems are fundamental to implementing the social and economic aims of government. Together, the taxation and welfare systems help us create our future. Continuing to build the best versions of these systems benefits not only ourselves but also the generations yet to come. That is why the Commission’s work will consider how best to deliver well-designed, coherent and straightforward taxation and welfare systems, to ensure a fully functioning, sustainable labour market, and active inclusion and participation in society.

Even as the COVID-19 pandemic subsides, Ireland still faces significant challenges including our aging population and how this will impact the cost of health and pensions into the future, meeting the increased infrastructure requirements for our growing population, the climate crisis, and adapting to the digitisation of the economy. Responding to these challenges and taking advantage of the opportunities they present will have a real impact on expenditure levels and the sustainability of Government revenue sources into the future.

The Commission is considering how best to reform our approach to taxation and welfare policy in order to address these challenges and support continued economic prosperity, greater social inclusivity and a fairer carbon neutral society and economy into the future.

Professor Moloney added:

"We want to hear from as many people, groups and organisation as possible to ensure that a diverse range of experiences and perspectives inform the development of the report of the Commission, which is due in July 2022. You don’t need to be an expert on tax and/or welfare policy for your opinion to be valued. We look forward to considering a broad range of diverse views as we continue our work into next year."

The Commission believes that Your Vision, Our Future should be accessible to all. Accordingly, Your Vision, Our Future is hosted on a platform which is compliant with the Web Content Accessibility Guidelines.

How to make your voice heard

Go to https://cotw.citizenspace.com.

What happens next

The public consultation will commence on 20 October 2021 and will remain open until 7 January 2022.

Further stakeholder engagement events are planned for early 2022.

Notes

Members of the Commission on Taxation and Welfare

Chair of the Commission, Professor Niamh Moloney, London School of Economics and Political Science
Marie Bradley, Managing Director, Bradley Tax Consulting
Philip Brennan, former Assistant Secretary, Revenue Commissioners
Sandra Clarke, former President of the Irish Tax Institute, Partner in BCC Accountants
Rowena Dwyer, Manager of Policy, Planning and Government Relations with Enterprise Ireland
Dr. William Hynes, Head of the New Approaches to Economic Challenges, New Approaches to Economic Challenges, OECD
Philip Kermode, former Director, European Commission
Dr. Aoife Ní Lochlainn, Irish Environmental Network
Rena Maycock, CEO and Founder of Cilter Technologies
John-Mark McCafferty, Chief Executive Officer, Threshold
Dr. Tom McDonnell, Nevin Economic Research Institute and ICTU Nominee
Fergal O’Brien, Director, IBEC
Dr. Barra Roantree, Economic and Social Research Institute
Anne Vaughan, former Deputy Secretary, Department of Social Protection

Terms of Reference of the Commission on Taxation and Welfare

The Commission is asked to:

review how best the taxation and welfare system can support economic activity and income redistribution, whilst promoting increased employment and prosperity in a resilient inclusive and sustainable way and ensuring that there are sufficient resources available to meet the costs of public services and supports in the medium and longer term
examine what changes, if any, should be made to the social insurance system, including structure and benefits coverage, while ensuring sustainability. This will include consideration of the NESC report no 151 (November 2020) on the future of the Irish social welfare system and output from the Pensions Commission regarding sustainability and eligibility issues in respect of State Pension arrangements. It will also include examination of how welfare policy can work in tandem with the taxation system to support economic activity, and while continuing to support those most vulnerable in our society in a fair and equitable way, having regard in particular to experience gained during the COVID-19 emergency
examine how the taxation system can be used to help Ireland move to a low carbon economy as part of the process of meeting its climate change commitments as set out in the Climate Action and Low Carbon Development (Amendment) Bill 2021. This will include ensuring the sustainability of environmental tax revenue resulting from decarbonisation of the economy
consider the appropriate role for the taxation and welfare system, to include an examination of the merits of a Site Value Tax, in achieving housing policy objectives. This consideration should include reviewing the sustainability of such a role. It should also have regard to the experience of previous interventions in the housing and construction market and the current significant State supports for housing provision
consider how Ireland can maintain a clear, sustainable, and stable taxation policy as regards Ireland’s attractiveness to Foreign Direct Investment in a changing global taxation environment, including retention of the 12.5% corporation tax rate
review how best the taxation environment for SMEs and entrepreneurs can ensure that Ireland remains an attractive place to sustain and grow an existing business or to start and scale up a new business
review the adaptability of the taxation and welfare systems to the rise of digital disruption and automation and other technological changes
examine the process for reviewing taxation measures and expenditures in order to ensure it is aligned with best practice and where appropriate make recommendations as to how it can be improved
examine how effectively good public health is promoted in Ireland, and present relevant reforms to advance and incentivise this goal
consider taxation practices in other similar sized open economies in the OECD to see what lessons Ireland can learn from such counties. This will include consideration of how the tax administration system should be modernised, building on real time payroll reporting which underpinned the existing modernisation of the PAYE system, and ensuring that the tax administration system meets best international standards. This will also include consideration of the potential for improvements in simplicity and administrative efficiency from integrating the taxation and welfare systems, as well as options for reform on the balance between the taxation of earned income, consumption, and wealth
submit its report to the Minister for Finance by no later than 1 July 2022