The Nevin Economic Research Institute (NERI) has released its latest Quarterly economic report. The latest NERI report assesses economic trends and the outlook for the economies of the Republic of Ireland and Northern Ireland.

The report finds that a hard-Brexit would do significant damage to both economies on the island. Indeed, the associated uncertainty may already be affecting Northern Ireland’s economy.

NERI's analysis is that the Republic’s economy is not yet overheating, but current trends suggest it may soon do so. NERI project that the Republic’s economy will grow by 4.6% in real GDP terms this year and by 3.3% in 2020. The Institute are also projecting strong and broad-based employment and wage growth. This positive outlook assumes a soft-Brexit.

The report finds that taxes on property and wealth are the most growth friendly revenue measures available to government. However, taxes on stocks of wealth such as property taxes are well below the average rates in other high-income EU countries.  

Receipts from taxes on assets such as those levied on inheritance, wealth and property were €323 less per person in Ireland relative to the comparator average in 2017. Scaled over the population, this implies a revenue shortfall of €1.5 billion. In particular, the report argues that the existing local property tax should be rebased to reflect 2019 property values and that the rate should slowly increase over a ten-year period.

Commenting on the launch of the report, NERI Senior Economist, Dr Tom McDonnell said, "Ireland’s fiscal policy should be reoriented towards sustainable, inclusive growth. We can improve the growth friendliness of our tax base by reorienting the tax base in favour of higher taxes on property and wealth.” 

Source: www.businessworld.ie