Standard income tax ‘raised by 10%’

The Department of Finance concluded the equivalent of an increase of 5.5 % points in the tax rate and a two-point in the standard rate. They also compared the increase incomes taxes to a 46,5% marginal tax rate and a 22% standard tax rate.

Brain Lenihan, the finance minister, is prepared to include the levies into the tax code. But some government sources speculate that payroll staff are wrestling with the system of calculating the impact of it.

An accountancy expert came to an argument that these levies would decrease the level of tax, paid by low and high earners. But the officials will examine the reduce. Due to the raise of the standard income tax, the government will earn an 1.1 billion extra this year and 1.6 billons across a full calendar year. But the calculation doesn’t apply the public pension sector.

The admission of the levies and the tax code would have a positive influence on the business world mentioned Brain Keegan, CAI director of taxation. Not only for employees but also for contributors.

The budget of 2009 showed in October a tax of 1% on low earners, 2% on medium and 3% on high earners. In April they were raised to 2%, 4% and 6%. But the finance minister will not have further increases. In difficult economic situations, the population avoid more taxes. When the government increase the taxes, they won’t necessarily see a rise of revenues.

Now the government departments preparing the budget for December. An Bord Snip Nua recommended to the ministers to avoid the implementations of various spending.

To include the levies into the tax code is a good strategy because it will have a positive influence especially for the employees. But now with the crises, the financial situation of the people will only get worse. The percentage of a medium earner is doubled so I think that here will be more moonlighters at the end of this year.

The cause of the financial crises is the fault of the financial institutions. Instead of paying out dividends to the shareholders, they have to pay back their debts to the government. So the government don’t have to increase the taxes.

The financial minister is determined to avoid any further rises. But what will be his plan to avoid this?

27 September 2009
Gerty Rigaux

Source: http://www.timesonline.co.uk/tol/news/world/ireland/article6851044.ece