Taxpayers Face A Hidden €200m Cost Of Remote Work In Ireland

Taxpayer remote work Ireland
Photo by Persnickety Prints on Unsplash

Thousands of people continue to work from home despite the termination of Covid restrictions, costing taxpayers more than €200 million.

The government touted an aspect of lengthy research earlier this week that showed workers can save over €1,400 per year by working from home, but the paper also reveals the multi-million euro hidden cost to the exchequer.

Reduced commuting could result in a €110 million loss in fuel duty and VAT receipts for the public.

According to the research, commercial rates will cost the local government an additional €80 million every year.

Pre-pandemic, commercial rates accounted for about 30% of council revenue, and downsizing or closing offices would have a sizeable impact on council budgets.

According to the report,

“An estimate of a 5pc reduction in commercial property occupancy due to remote working would cost local councils a total of €80m per year.”

The government must also offer €17.4 million in working from home privileges, according to the assessment by the State’s civil service research authority. It does, however, reveal that €32 million might be saved on leases, as well as potential income tax rises, less demand for staff housing, and less money spent on road resurfacing.

However, these advantages are not costed, with the analysis instead highlighting the €207 million loss to taxpayers. Businesses that generate money from people working in offices, such as gas stations, catering providers, and commercial landlords, “will suffer the hardest” according to the Irish Government Economic and Evaluation Service study.

According to the report:

  • It is still unknown at this time what the impact of remote working will be on the exchequer.
  • There are potential costs of €200m per year, although the majority of this is likely to come through a reduction in ‘corrective’ tax receipts, such as excise duties.
  • It has not been possible to estimate all of the potential benefits or costs to the exchequer.
  • The report also states that the “benefits” of working from home are “likely to outweigh the costs”.

According to a spokesperson for the Department of Enterprise, the figures should not be taken at “face value”.

“It does not take into account potential gains from increased income tax revenue, reduced welfare benefit costs, or reduced road traffic accidents so should not be taken at face value. The majority of the estimated loss in revenue will come from a reduction in corrective tax receipts, which by their nature are designed to reduce over time as consumption falls.”Spokesperson, Department of Enterprise

The demand for remote work in Ireland is six times more than it was before the pandemic. In fact, Ireland has been focussing on building remote working hubs too. Time will tell how the taxpayer is affected by all of the remote work advancement in the nation.

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