Harris hints at tax rate changes as Budget talks set to begin
JUNIOR Finance Minister Simon Harris has raised the prospect of income tax relief for lower paid workers in October's Budget.
In his first interview since his promotion, the Dail's youngest TD indicated changes to the rate at which people begin to pay tax is one option on the table.
While Finance Minister Michael Noonan has signalled that he is preparing to raise the band at which workers pay the higher rate of tax, his junior counterpart believes the lower rate may also be examined.
"My clear preference is to look at the tax bands and the rate at which people begin to pay tax, in the first instance at the lower rate, and then to look at the rate in which people move on to other bands. The government has always been about incentivising work since day one," Mr Harris said.
The Wicklow TD insisted that whatever changes are made in the area of income tax will be influenced by next month's exchequer returns. He emphasised that a number of possible options could be taken to lift the burden on workers.
But his pointed emphasis on the lower tax rate will be welcomed by those on lower incomes. Currently, a single person pays 20pc income tax on the first €32,800 earned and 41pc on the balance.
In comparison, a married couple on a single income pay the lower 20pc rate on the first €41,800 earned. The same higher rate of 41pc is applied for monies earned above this amount.
Mr Harris said he believes both tax bands will be looked at as the government prepares to ease the burden on hard-pressed workers. However he said that introducing measures which benefit lower income workers is his preference.
"In terms of the tax bands, particularly the point of entry at which people enter tax bands, being the lower rate or higher rate, I think there's scope there if at all possible," Mr Harris told the Irish Independent.
"Clearly we're in better shape from where we have been in previous years and that's down, through no small part, to the large lifting that all the Irish people have done over a number of years.
"My ultimate priority -and I think the ultimate priority for government - is that as the economy continues to recover, we focus giving back to people who are working who have paid a massive burden over the last number of years," he added.
Mr Harris refused to be drawn on the level of budget adjustment required in October's Budget. He said this adjustment will be decided by the government, over the coming weeks. He added that while there will be reprieve for families, the lifting of the burden will take place over the next two budgets.
"What's going to be a job of work for minister Noonan and Minister Howlin, and all the government is to see what level of flexibility we have," he added.