Receive up-to-the-minute news updates on the hottest topics with NewsHub. Install now.

Revealed: Modest tax cuts of €250 for middle-income earners in Budget

10 October 2017 05:14
12 0
Revealed: Modest tax cuts of €250 for middle-income earners in Budget

The Budget will also contain measures aimed at supporting families, with free childcare hours for toddlers and a 50c reduction in prescription charges for everyone with a medical card.

Social welfare payments will all go up by €5, including the pension, dole and lone parents' allowance.

In the closing days of the negotiations, Fianna Fáil leader Micheál Martin has also secured increases targeted at pensioners in the fuel and phone allowances next year.

To pay for the additional spending, Finance Minister Paschal Donohoe will increase a range of taxes, with 50c being added to the price of a packet of cigarettes. The Budget will be announced at 1pm today.

Mr Donohoe will point to the measures aimed at middle-income families. He will also say the Government is trying to do the right thing for the country and claim nobody is being left behind with the Budget.

Finance Minister Paschal Donohoe is expected to raise stamp duty on commercial property transactions to as high as 5pc, which last year raised €256m at a 2pc rate.

However, Savills Ireland has warned that the rise could worsen the housing shortage as developers will struggle in the face of higher construction costs to bring properties to the market, the paper reports.

The Construction Industry Federation (CIF) also said that the cost of building “has resulted in the greatest shortage of supply in this sector in the history of the State”.

The minimum wage is set to rise by 30c per hour to €9.55. While the move is likely to be welcomed by workers, the government is set to receive some backlash from the business sector particularly in light of Brexit.

A cut to the much-hated USC and a tweaking of income tax bands will be included in next week’s Budget following a compromise between Fine Gael and Fianna Fáil in an effort to ensure that the budget will pass.

As part of a compromise deal being hammered out between Finance Minister Paschal Donohoe and Fianna Fáil, it has been agreed that a double-edged approach to personal taxation will be taken.

The USC cut will help the ‘squeezed middle’ earning up to €70,000 a year, while the tax band changes will benefit people on salaries over €33,800.

The Sunday Independent revealed that the entire cost of the social welfare package being discussed by the Government could come to €450m.

Fine Gael has previously indicated that it does not believe in raising one payment over another and an increase of €5 is being looked at across-the-board.

However, it is understood that the government is considering delaying the introduction of the hikes to mitigate the cost.

It is expected that the Help to Buy scheme is to be retained, with little or no amendments to the first-time buyers grant scheme.

Homeowners are expected to further benefit as mortgage relief, which was due to expire at the end of this year, may be extended.

Parents are not getting their hopes up ahead of Tuesday's Budget with no changes to child benefit expected and very slight increases in other social welfare payments.

It is expected that the bereavement grant will be brought back but will not match the previous once-off payment amount.

Under previous commitments to increase the threshold on inheritance tax from a parent to a child to €500,000 another increase in the threshold is expected this year. In last year's budget it was raised to €310,000 but it is unlikely that this year will see the ceiling raised to the full €500,000.

The price of diesel is expected to remain unchanged in Budget 2018, despite speculation it could be equalised with petrol.

Also read: Status orange snow warning issued for seven counties

Source: independent.ie

Share in social networks:

Comments - 0