Monday 29 December 2014

Taoiseach promises to deliver income tax reductions

Published 12/07/2014 | 02:30

Mr Kenny described the rate, which is applied to incomes of above €32,800, as “unsustainable”
Mr Kenny described the rate, which is applied to incomes of above €32,800, as “unsustainable”

TAOISEACH Enda Kenny has pledged to reduce the number of low- and middle-income earners who have to pay the marginal rate of income tax, currently set at 52pc.

Mr Kenny described the rate, which is applied to incomes of above €32,800, as "unsustainable" and said the tax burden most now be "shifted away" from hard-pressed families.

Government ministers had previously indicated that the income band beyond which workers enter the higher tax rate would be increased as part of tax-relief measures.

The move will be part of a package of tax-relief measures to be rolled out over a number of consecutive budgets.

A single worker in Ireland starts paying the higher income tax rate of 42pc, plus 4pc PRSI (Pay Related Social Insurance) and 7pc USC (Universal Social Charge) on any income above €32,800. The lower rate is 20pc.

The combined effect creates a marginal income tax rate of 52pc, meaning a worker only takes home 48c of every €1 that they earn above €32,800.

The Taoiseach told reporters last night that one of the central cogs of the new plan is changes to the marginal rate of tax.

"What we want to do is announce a tax reform plan in the forthcoming Budget that will extend over a number of years, which will reduce the 52pc tax rate on low and middle earners in the manner that would be consistent with the very progressive nature of the Irish tax system," he said.

The Coalition also pledged to subsidise childcare for parents seeking to return to employment while also guaranteeing the future of the Free Travel Scheme for pensioners.

The targets were announced as the Taoiseach and Tanaiste Joan Burton detailed the Coalition's new 'statement of Government priorities'.

The ten-page document dominated the negotiations between Mr Kenny and Ms Burton in Government Buildings this week.

The series of measures pledged by the coalition last night includes:

* An additional €100 payment to 400,000 homes availing of the household package

* Greater child income support to help parents get back to work

* The completion of the cross-city Luas project in Dublin

* A new tourism strategy aimed at creating 50,000 jobs over the next decade

Ms Burton said housing will now become the number one priority of the Department of the Environment. "We will set in train a construction programme to triple the number of houses built to 25,000 a year by 2020," she said.

Irish Independent

Promoted articles

Read More

Promoted articles

Editors Choice

Also in this section