Ireland has a progressive income tax system which is structured such that the more income you have, the more tax you pay. As an individual’s income increases they move up through the various rates and bands and, as a result, while the levels of take home pay increase overall, the amount of tax paid also increases. Total income tax receipts account for around 40% of Ireland’s annual tax receipts, thereby making a significant contribution towards the cost of the various Exchequer funded State services, many of which are experiencing additional pressures at this time on account of the crisis we are facing as a result of the necessary response to the COVID-19 pandemic.
The Government greatly appreciates the additional efforts of essential workers, front line staff and all those working during this difficult time. They are making a key contribution to the State-wide response to the COVID-19 crisis. Rather than waiving tax payments or introducing a tax relief for those who are working at this time, resources are being focused on new initiatives to support those who are no longer in employment or who will have reduced income in the coming weeks and months, as well as measures seeking to support employers in retaining staff and restarting businesses.