Forfás has published its report “Costs of Doing Business in Ireland 2012. The Report notes that there has been renewal in wage growth however, the tax wedge (the gap between what the employer pays and what the employee receives) in Ireland has been increasing. The Report recommends that there should be no further increases in the labour tax wedge and the marginal labour tax rate should be reduced to below 50 per cent.

The Report also reviews property costs for business and the commercial rates, which are a form of property tax, levied by local authorities on tenants of commercial properties. The Report notes that the dependence of local authorities on commercial rates has increased sharply in recent years due to reduced central government funding and development charges. It is suggested that the speedy introduction of the property tax on residential property and water charges will assist in rebalancing Local Authority revenue sources and they are adequately funded in a sustainable manner.

The Report goes on to suggest that in order to avoid more economically damaging increases in tax, and mirroring practices in other advanced economies, it will be necessary to achieve a significant revenue stream from property taxes.

The Report also reviews other costs for doing business in Ireland such as transport costs, utility costs, and business service costs.