Taoiseach hopes for further 'progress' on tax rate bands in Budget

By David Young, PA

Simon Harris has expressed confidence that the Government will be able to make further progress increasing the higher tax band threshold in the upcoming budget.

At the Fine Gael ard fheis in April, Mr Harris restated an ambition to raise the threshold to €50,000 and promised to further reduce the Universal Social Charge (USC) burden on low and middle-income earners.

He subsequently made clear that increasing the current top tax rate from the current threshold of €42,000 to €50,000 euro would not be achieved in a single budget.

In his latest comments on the potential shape of October’s budget, the Taoiseach said he hoped the Government could make further progress on increasing tax thresholds.

The Fine Gael leader suggested more cuts to USC rates and moves on inheritance tax would also be under consideration.

“We have indications in the Summer Economic Statement that we’d have around €1.4 billion available for tax measures, that’s pretty much the exact same as we had last year, so that gives you an indication of the scale of options that are available to Government,” he said.

“It is important to me that you don’t have a situation where somebody’s wages go up, or somebody does a few hours of overtime, or you know gets a promotion, that all of a sudden they find the state clawing back more and more of their money. That’s a disincentive to the very principle of making work pay.

“We’ve consistently made progress on increasing those income bands. I’d hope we could do that again.

“Issues around the USC are also terribly important. And can we make progress on that?

“Issues around inheritance tax losses. There’s a lot of things in the pot for consideration.

“I also said at the ard fheis that later this year my party would also outline, from a party point of view, our own tax strategy for the next five years and I think that’s important as well that people know the direction of travel that I and my party would like to see taxation policy go in the years ahead.”

The upcoming budget will be worth €8.3 billion, comprising a spending package of €6.9 billion and a tax package worth €1.4 billion.

The budget will be officially unveiled on October 1st.