herald

Friday 17 August 2018

The boom is back as we pay 20pc more tax than anticipated

In the words of former Taoiseach Bertie Ahern, Ireland's current boom just got boomer.

Last month the tax man collected €2.54bn even though only €2.1bn was expected to come into the exchequer.

The Government collected 20pc more tax than planned last month.

The latest exchequer figures, which will be the last before the announcement of October's Budget, show the economy is quickly picking up.

And the figures give Finance Minister Michael Noonan room for a much more generous Budget than originally planned.

The 20pc boost was not just in one area either with an increase seen in many places like stamp duties and sales of shares.

Corporation tax, the tax paid by companies came in at €259m, which was well ahead of target.

And income tax, which gives the most money to the exchequer, was 9.7pc ahead of schedule at €1.3bn.

A generous Budget is now being hoped for with talks that the Universal Social Charge (USC) will be reduced.

Rate

Junior Finance Minister Simon Harris has claimed many workers who pay the higher rate of income tax, currently set at 41pc, are seeing their salaries being "swallowed up".

And a cut to the Universal Social Charge (USC) will benefit the widest number of people providing relief to working families, said an Irish Tax Institute report.

In response to the report, Mr Harris said he believed that "all workers" are entitled to a reprieve in the upcoming Budget and that one option available to the government is lowering the rate of USC.

He also said that on the country's current tax band is a "disincentive" to workers.

"The very low rate at which people enter the higher rate of tax is becoming a disincentive because when I meet people who are asked to work overtime or asked to work extra hours, they say a lot of that is being swallowed up by tax," stated the junior minister.

Vow

When Joan Burton, was appointed Tanaiste last June she vowed that cash-strapped taxpayers, who paid the price of the crash will get relief in the Budget.

She also said that cuts of €2bn will not be necessary.

Ms Burton wants to cater for low to middle-income families in the Budget via tax relief.

jfegan@herald.ie

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