Budget cut to 'punishing DIRT tax not enough'
Published 13/10/2016 | 02:30
The Government should have cut the tax on savings by even more in the Budget, a leading consumer advocate has said.
Savers got a small break when the tax on deposits was lowered, with promises of more to come over the next four years.
The deposit interest retention tax (DIRT) rate is one of the highest in the world at 41pc.
Now the Government has decided to drop the DIRT rate by 2 percentage points each year for the next four years until it reaches 33pc. The rate falls to 39pc from the start of next year.
But deputy chairman of the Consumers' Association Michael Kilcoyne said Mr Noonan should be reducing the tax on savings faster.
He said the high rate was punishing those saving for emergencies and to fund their children's education.
Some people whose low income means they pay income tax at 20pc were being hit by the 41pc rate on any interest they earn on savings, he said.
And investment firms were disappointed there was no cut to the exit tax of 41pc on life insurance and savings policies.