News Ireland daily BLOG by Donie

Thursday 28th August 2014

Poorer people in Ireland ‘pay out more of their income in tax’ like VAT

a Report suggests poorer households are disproportionately hit by indirect taxes, 

  

Irish households pay 24% of their income in taxes, both direct and indirect, according to new research from the Nevin Institute.

Poorer people in Ireland pay out a greater share of their income in tax than their richer counterparts, according to new research.

The finding, contained in a report by the Nevin Economic Research Institute, runs counters to the notion that Ireland’s tax code is progressive, in other words, one in which the tax rate rises as income increases.

The institute’s research, which is based on data from Central Statistics Office’s most recent household budget survey, found Irish households pay 24% of their income in taxes, both direct and indirect.

On average, 13.6% of gross income goes in direct taxes (income and social insurance) and 10.36% in indirect taxes (VAT, excise and levies).

VAT was found to be the largest source of indirect taxation, collecting on average €3,360 per annum from households, equivalent to 6.27% of average gross income.

The report found that in nominal terms the tax was progressive but when judged against gross income it becomes regressive, accounting for a higher percentage of income in poorer households.

Specifically, the research showed the poorest 10 per cent of the population shelled out 16% of their income on VAT while the top 10% of earners paid out just 4%.

A similar pattern emerged when it came to the other big indirect tax, excise duty, with the poorer cohort paying 8 per cent of their income on this tariff compared to top earners who pay 1.4 per cent.

The report noted that in contrast to the indirect tax regime, the State’s income tax code is strongly progressive with the top 10 per cent paying an average rate of 23 per cent of their income compared to the bottom tenth who paid out just 0.3 per cent.

However, the report found the combined effect of both direct and indirect taxes accounted for a greater portion of overall income in poorest households than in richest ones.

Specifically, the bottom 10 per cent of the population forked out 30.5 per cent of their income in total tax, while the top 10 per cent paid 29.6 per cent.

The report’s author Dr Micheál Collins said the Irish income tax system is progressive, but the indirect taxation system is regressive – as income increases less tax is paid as a percentage of gross income.

This gives a U-shape to the overall household tax contribution curve – households at the bottom and top of the income distribution contribute the most, he said.

“What this report is really getting at is that the tax code is not simply about income tax…it’s a more complex picture than that,” he said.

Budget 2012 included an increase in the standard rate of VAT from 21 per cent to 23 per cent yielding an additional €670 million to the exchequer.

Projections for the Republic of Ireland’s taxation revenue suggest that just over €50 billion will be collected across all taxation categories during 2014. While corporations and other businesses contribute a sizeable proportion of this sum (principally through profit taxes, local authority charges and employer PRSI) the largest proportion flows from households.

Irish homeowners liable for NPPR (non principal private residence) charges urged to contact authorities

  

€200 tax on second homes will attract penalties if not paid by September 1st

Those who are liable to pay the non-principal private residence charge have been urged to contact their local authority.

Homeowners who have yet to make arrangements to pay the non principal private residence (NPPR) charge have been urged to make contact with their relevant local authority or the NPPR bureau before the end of the month, to avoid additional penalties which will be imposed from September 1st.

The €200 charge, introduced in 2009, applied to those who owned a property that was not their principal residence, with exemptions allowed for mobile homes and those involved in judicial separation or divorce.

It applies from 2009-2013 and homeowners who have not yet paid are already liable for late payment charges.

If payment is not made in full by Sunday evening, or if settlement terms have not been agreed by then, an additional late payment fee of €120 a year will be applied on September 1st.

In addition, the homeowner’s entire NPPR liability will be increased by a factor of 50 per cent and will then be frozen.

HSE to go ahead & implement new consultant rates

  

The HSE says it will go ahead with the implementation of revised higher pay rates for newly-appointed consultants from next week, despite the collapse of Labour Relations Commission (LRC) talks between health management and the IMO on the matter.

While the new salary rates provide for a substantial pay increase on current new entrant consultant pay rates, the IMO claimed the HSE was ‘not serious’ about tackling the recruitment crisis for consultants in the Irish health services.

The HSE said following three months of negotiations between management and the IMO, the LRC had issued a series of proposals regarding consultant pay and career structure.

The HSE says it now intends to recruit consultant posts based on the new pay scale proposed by the LRC, which comes into effect from September 1. The new pay rates are intended to redress the 30% pay cut for newly-entrant consultants imposed in 2012, which the IMO says has discouraged doctors from taking up consultant posts.

Under the new pay rates, consultants who were appointed after September 2012 and who are appointed in future will receive basic salaries of between €105,000 and €190,000, depending on experience, performance, type of post and level of private practice. The pay rates do not provide for back-pay to September 2012.

Some new entrant consultants with relevant experience could start at around €150,000 under the new rates.

Consultants will receive extra allowances for on-call and emergency work on top of basic salaries.

Under the pay rates for new entrants introduced in September 2012, maximum pay for new entrant consultants was around €120,000. Most consultants appointed prior to that date would earn higher salaries for public hospital work – the new rates for new entrants would considerably close the gap between the pay rates of pre-September 2012 consultants and consultants appointed after that date.

The health executive said the LRC proposals give full regard to the relevant experience of doctors returning from abroad or currently in the Irish health system and ensure that such experience influences where doctors are placed on the new pay scale.

“Health service management believes that the proposals are comprehensive in dealing with and advancing the issue of career structure and associated pay rates for consultants. Implementation of the LRC proposals will help to ensure that the Irish health system is in a position to recruit consultants and ensure it continues to deliver a high quality and safe service for patients.”

However, IMO Industrial Relations Director Steve Tweed said the new pay proposals would not solve current problems.

“The reality is that our doctors see better jobs with better pay and better conditions in various markets across the world and they are voting with their feet.”

He said the IMO would be willing to re-engage in talks if the HSE could demonstrate that it was prepared to work with the IMO to tackle the problem.

The IMO is reported to have had concerns about performance reviews in the proposals.

Meanwhile:-

A survey shows a rise in the number of young doctors emigrating from Ireland

  

Medical Council report finds sharp rise in ‘brain drain’ among newly qualified graduates

A Medical Council report has found that the proportion of younger graduates of Irish medical schools appears leaving the State is on the rise.

Emigration among younger doctors increased sharply last year, according to a Medical Council report.

The finding of a 23 per cent increase in the “exit rate” among younger graduates of Irish medical schools appears to bear out claims of a “brain drain” from the medical profession.

The exit rate of 25 to 29-year-old Irish-trained doctors grew from 6.4 per cent in 2012 to 7.9 per cent last year, according to the council’s second annual Medical Workforce Intelligence Report.

One in 20 doctors in this age-group on the medical register was practising outside Ireland, the report found.

The report shows Ireland has a relatively young medical workforce, with just one in five (21.4 per cent) doctors aged 55 or older, compared to an OECD average of one in three.

However, some specialties, such as occupational medicine, public health and psychiatry have a significantly higher proportion of older doctors.

There has been a 12 per cent increase in the number of women on the medical register since 2008, and four in 10 doctors are women.

This is still slightly below the OECD average of 44 per cent.

The council says there is definite “gender patterning” in the role of female doctors, with higher than average proportions practising in areas such as public health, paediatrics, and obstetrics and gynaecology.

There has been a 30 per growth in the number of specialists on the register since 2008, but Ireland still lags behind other countries in this area. Across the OECD, there is an average of two specialists for every general doctor, while in Ireland the ratio of specialists to generalists is 1:1.

Ireland is producing medical graduates faster than any other OECD country apart from Mexico, the survey reveals. Last year, Ireland produced 50 new medical graduates per 1,000 doctors in the workforce, compared to an international average of 33.

Speaking today, Ms Caroline Spillane, chief executive of the Medical Council said: “At a time of health system reform, it’s essential that we continue to focus on developing and retaining doctors with the right mix of skills to meet the changing needs of patients and the health service.

“This report has been developed not only to support our own work but also to inform wider health system planning and reform.”

Ms Spillane continued: “The findings have important implications for how we approach our own work in overseeing doctors’ education, training and practice. The report will also inform wider efforts across the health system to plan and develop a sustainable medical workforce in Ireland.

“Without an informed approach to medical workforce planning, we cannot build a strong health system in Ireland and continue to meet our commitment to fairer recruitment of internationally-qualified doctors in line with WHO best practice.”

Medical Council president Professor Freddie Wood said: “The public’s experience of the patient-doctor relationship is shaped by the healthcare team, the settings where doctors learn and practise, and the wider framework of legislation and strategic policies which set direction for the health system.

“The detailed understanding of the evolving medical workforce provided by this report supports our work in education and training, registration and oversight of continuing practice, while also better informing the individuals and organisations with whom we work across the wider health system.”

New Antarctic sea life atlas offers an index of marine life

  cushion stars

The most complete audit ever assembled of Antarctic sea life is to be published this week.

More than 9,000 species, from single-cell organisms to penguins and whales, are chronicled in the first Antarctic atlas since 1969.

The book will be launched by the Scientific Committee on Antarctic Research at its Open Science Conference in Auckland, New Zealand.

Across 66 chapters, the atlas contains around 100 colour photos and 800 maps. It is called the Biogeographic Atlas of the Southern Ocean.

Maps illustrate data such as the proportion of the year spent under sea ice (left), and the number of species reported across the length and breadth of the ocean (right)

“It’s been an enormous international effort and will serve as a legacy to the dedicated team of scientists who have contributed to it,” said Dr Huw Griffiths, one of the atlas’s authors and editors, from the British Antarctic Survey.

Dr Griffiths said he believed the atlas would appeal to “anyone interested in animals living at the end of the Earth”.

anemone  This Antarctic sea anemone ranges from the shallows to over 3km deep, and has 96 tentacles. 

penguins  Adélie penguins currently inhabit the entire Antarctic coast. 

All together 147 scientists from 91 different institutions around the world contributed to the work, which has taken four years.

They hope the publication will help inform conservation policy, such as the issue of whether marine protected areas should be established in open swathes of the Southern Ocean.

The data include the distribution of different species, insights into their evolution and genetics, their interaction with the physical environment and the impacts of climate change.

Researchers say that compiling the information together can help predict how the habitats and distribution of important species will change in the future.

The community around a hot volcanic vent, more than 2km below the surface, includes vast swarms of yeti crabs feeding on bacteria

The book’s chief editor, Dr Claude De Broyer from the Royal Belgian Institute of Natural Sciences, said: “This is the first time that all the records of the unique Antarctic marine biodiversity, from the very beginnings of Antarctic exploration in the days of Captain Cook, have been compiled, analysed and mapped by the scientific community.”

Dr De Broyer described the atlas as “an accessible database of useful information” for conserving the marine life of the Antarctic.

  This 9cm long, carniverous critter is the giant Antarctic isopod, found in large numbers in coastal waters

elephant seal  This young southern elephant seal was photographed on Marion Island, one of South Africa’s Prince Edward Islands. 

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