Business representative group Ibec welcomed the fact that the Commission on Taxation did not recommend an increase in the 12.5 per cent rate of corporation tax.
It said the corporation tax regime was “central to job creation and Ireland’s attractiveness as a place to do business”.
Following the publication of the report today, Ibec said its recommendations reflected the “long-standing need to modernise the Irish tax system”.
Ibec chief economist David Croughan said: “The report strikes a balance between the need to raise revenue in an equitable way and ensuring that the tax system facilitates economic growth and employment.”
He said Ireland’s relatively low tax burden had been “central to past economic success and is important for recovery”.
“Tax reform should therefore be introduced on a revenue-neutral basis, to avoid undermining economic growth and competitiveness.”
Ibec said changes proposed to the income tax system “must be designed to ensure that they do not act as a disincentive for high-skilled mobile labour from abroad”.
Mr Croughan said: “It is important that Ireland makes the transition to a low carbon, energy efficient economy.
“While a carbon tax has been planned for some time, it is important that it is introduced in a way that best promotes energy efficiency and the shift towards a low-carbon economy. It will only succeed if it has the effect of changing the way we use energy and promoting more innovative ways of working.”
Ibec also said it had “certain concerns” on the proposals with regard to pensions.
Mr Croughan said a new hybrid rate “may reduce the incentive to save for those on the higher rate, with no guarantee that it would encourage those on the lower rate to increase their pension provision”.
But Ibec said the commission’s recommendations on further improvements to the R&D credit were “a welcome recognition of the needs of a modern economy”.