herald

Tuesday 6 December 2016

'Irish families paying least tax in the world'

REPORT

A couple earning an average wage with two children end up paying almost zero tax in Ireland, the lowest in the developed world, an influential global economic think-tank has claimed.

When €270 a month in child benefit is taken into account, a family of two on the average wage takes home 99.8pc of their gross wages, according to the Organisation for Economic Cooperation and Development (OECD).

The Paris-based organisation said that after tax and benefits, average single workers take home close to 80pc of their gross pay.

But the OECD suggested a married couple with one working partner earning the average wage fares much better.

"Taking into account child related benefits and tax provisions, the employee net tax burden for an average married worker with two children in Ireland was reduced to 0.2pc in 2014, which is the lowest in the OECD, and compares with a reduction to 14.8pc for the OECD average," the OECD tax trends report, published yesterday, said.

"This means that an average married worker with two children in Ireland had a take-home pay, after tax and family benefits, of 99.8pc of their gross wage compared to 85.2pc for the OECD average."

While the OECD data contains PRSI contributions, it is not clear if it takes account of the Universal Social Charge. The research did not take account of property tax and water charges. For single workers, the OECD said Ireland has the 8th lowest so-called tax wedge - the difference between before tax and after tax wages - among the 34 OECD member countries.

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