The Minister for Finance, Brian Lenihan, has delivered his third budget against the backdrop of the economic downturn. On the positive side, the Minister forecasts a return to growth in the next six to nine months. To tackle the budget deficit, the Minister has announced a wide range of spending cuts and taxation measures. As was widely predicted by the media, the Minister focussed on spending cuts rather than taxation measures.
The Minister did not change personal income tax rates although he has increased the tax payable by individuals claiming specified reliefs over €125,000. Although not making any changes to tax incentives, the Minister said he would review this area in the Finance Bill. A carbon tax was introduced and two new taxes have been signalled; a property tax and water charges. The Minister announced that plans will be introduced to improve the effectiveness of the Revenue Commissioners in tackling the black economy and tax avoidance. Details of the specific taxation measures are set out below. |
