Boost for SMEs but old reliables hit hard
FINANCE Minister Michael Noonan used his Budget to outline his plans for growth in the small business sector – but there are major tax hits for workers and homeowners.
Taxes on the 'old reliables', motoring and pensions will also increase, while Mr Noonan says anyone still to pay the €100 household charge will be pursued.
The big tax hit comes in abolishing a PRSI allowance on earnings over €18,000. The PRSI exemption on the first €127 of weekly earnings will be abolished, costing everyone at least an extra €5 a week, or over €250 a year.
Property tax will come in from next July on a rate of 0.18pc of market value. A mansion tax will be levied on houses worth over €1m, but the higher 0.25pc rate will only apply on the value of the property over €1m.
Anything under €1m will be levied at the lower 0.18pc, and the tax will be collected by the Revenue.
First-time buyers will be exempt for three years if they buy a house next year, as will anyone who buys a new or previously unoccupied home. Household-charge arrears will be increased to €200 and collected by Revenue.
Subsidies for pensions which pay out more than €60,000 per year will be stopped, while the standard 7pc rate of the Universal Social Charge will apply to anyone over 70 with an annual income over €60,000.
The old reliables
Wine-drinkers will be hardest hit, with the price of a standard bottle of wine going up by a full €1. The price of a pint of beer or cider, as well as a standard measure of spirits, will go up by 10c.
A pack of 20 cigarettes will increase by 10c, while roll-your-own tobacco goes up by 50c per 25g packet. Petrol and diesel are unchanged, but annual motor tax rises sharply. Carbon tax on solid fuels will also go up after the winter, increasing heating bills.
The threshold for Capital Acquisitions Tax will fall by 10pc. DIRT will jump from 30pc to 33pc, and the rates for Capital Acquisitions Tax and Capital Gains Tax will also rise by 3pc to 33pc.
Mr Noonan is targeting the SME sector as the main growth area in the economy next year. He is bringing in a "10-point tax-reform plan", which includes reforming tax relief for start-up companies, amending research and development tax credits, and introducing and extending other tax reliefs, such as the foreign earnings deductions, to help exports.
There will also be a diesel rebate for hauliers from July. The Credit Review Office (CRO) will also give SMEs more help, and the National Pensions Reserve Fund (NPRF) will provide more loans to businesses.
Irish Independent Supplement