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Budget Statement 2013 (Continued)

Wednesday, 5 December 2012

Dáil Éireann Debate
Vol. 785 No. 2

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  3 o’clock

(Speaker Continuing)

[Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan] Therefore, from 2015, local authorities will have the power to vary the rates by 15% above and below the central national rates to better match their funding needs. In this way, the property tax will strongly reinforce local democratic decision making and encourage greater efficiency by authorities on behalf of their electorates.

As I stated earlier, there will be a half year's property tax charge in 2013. Using the example of properties in the €150,000 to €200,000 band, the charge in 2013 will be a half year charge of €157. It is important to note that this represents an increase for the year of no more than €57 on the household charge payable in 2012.

I have already set out certain exemptions from the local property tax that will apply to first-time purchasers of homes in 2013 and to purchasers of new or previously unoccupied homes up to the end of 2016.

A voluntary deferral will be available to liable persons whose gross income limits do not exceed €15,000 for a single person and €25,000 for a couple. A deferral option will also be available up to the end of 2017 where gross income less 80% of mortgage interest falls below €15,000 for single people and €25,000 for a couple. Marginal relief will apply where the income or adjusted income is €10,000 above the income limit, to permit deferrals of up to 50% of liability. Interest will be charged on deferred amounts at 4% simple interest per annum, which is half the rate charged in default cases. Deferred property taxes and interest will have to be discharged on the sale or transfer of the property.

The household charge will cease with effect from 1 January 2013 and the NPPR charge or "second homes charge" will cease with effect from 1 January 2014.

Full details of the local property tax will be set out in the finance (local property tax) Bill 2012, which will be published this week and commence Second Stage in the Dáil next week. Extensive information is available on the budget and Revenue Commissioners' website and from the Revenue Commissioners' helpline.

I view tax compliance as a core principle of our democracy. Public services can only be provided to citizens because people pay their taxes. I want to reassure the vast majority of tax compliant citizens that the Revenue Commissioners will strictly enforce the local property tax and they will collect any unpaid household charge for 2012.

Deputies: Hear, hear.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan Any arrears that are not discharged before 1 July 2013 will be increased to €200 and will be collected through the local property tax system.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath Go on Big Phil.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan The local property tax is fair and progressive, as all property owners make a contribution-----

Deputy Willie O'Dea: Information on Willie O'Dea Zoom on Willie O'Dea Regardless of income.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan -----but those who own the most valuable properties will pay the most.

Income Tax

  The Government continues to implement the programme for Government commitments of maintaining the current rates of income tax together with bands and credits and not increasing the top marginal rates of taxes on income.

  Ireland's income tax system is one of the most progressive income tax systems in the world and is the most progressive in the EU. Those who earn the most pay by far the most in tax.

  I would encourage Deputies to look at annexe F of the budget documentation, which illustrates the distributional impact of recent budgets.

  The Government is firmly committed to this progressive system, as it illustrates the fairness of our tax code. This level of progressivity in the tax system and the record levels of foreign direct investment show that we are striking the right balance between our income tax levels and incentivising investment and job creation in Ireland. The more jobs that are created, the wider our tax base will be for the provision of public services.

  I see greater fairness of the tax system as reducing the number and amount of reliefs that can be availed of by income earners to shelter their income from tax. Already, the ability of certain wealthy people to reduce their income tax liability to very low levels through judicious use of tax incentives has been restricted. The introduction of the high earners restriction has been successful in generating additional tax revenue. In 2010, the most recent year for which the Revenue Commissioners have figures, €80 million of additional revenue was secured from 1,544 individuals.

  In addition, I am announcing that, from 1 July 2013, maternity benefit will be harmonised with other social welfare benefits in respect of its tax treatment. As is the case with all social welfare payments, maternity benefit will continue to be exempt from the universal social charge.

Deputy Mary Lou McDonald: Information on Mary Lou McDonald Zoom on Mary Lou McDonald Wow.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan This measure will correct an anomaly so that women on maternity benefit will pay the same level of income tax as when they are working.

Excise Duty

  I am not increasing excise duty on diesel and petrol.

Deputies: Hear, hear.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae They are dear enough.

Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath That is right.

Deputy Billy Kelleher: Information on Billy Kelleher Zoom on Billy Kelleher That is the end of the cheering for the day.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan With effect from midnight tonight, excise duty on a pint of beer or cider is being increased by 10 cent, on a standard measure of spirits by 10 cent and on a 75 cl bottle of wine by €1, with pro rata increases on other alcohol products.

  With effect from midnight tonight, the price of 20 cigarettes will increase by 10 cent and "roll your own" tobacco will increase by 50 cent per 25 gram pack.

Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath Outrageous. The poor smokers.

(Interruptions).

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan The rates of both VRT and motor tax across all categories will increase with effect from 1 January 2013. In order to incentivise a more year round motor market, I have decided to introduce a dual registration period. Therefore, in 2013 and subsequent years, vehicles registered from 1 January in 2013, for example, will carry a year tag of 131 and those registered in the second half of the year will carry a year tag of 132. In subsequent years, the same principle will apply.

  I am extending carbon tax to solid fuels on a phased basis over two years commencing after this winter period. A rate of €10 per tonne will apply with effect from 1 May 2013 and this rate will increase to €20 per tonne on 1 May 2014.

  The extension of carbon tax to solid fuels brings their tax treatment into line with the treatment of other fuels.

Philanthropy

  Earlier this year, I launched a public consultation on certain proposed amendments to the tax relief available for donations to charities and other approved bodies. Based on this consultation, I have decided that donations made from the 2013 tax year will be subject to a new, simplified tax relief regime. The new rate will be a blended rate of 31%, which will apply to all donations.

  I have, since taking office, received proposals that suggest there may be a significant number of philanthropists worldwide, many of them Irish citizens or with Irish family backgrounds, who would be interested in making significant donations to initiatives that would aid Ireland's economic recovery if our tax system were changed to ensure suitable recognition of such donations. I have decided to ask the Oireachtas Joint Committee on Finance, Public Expenditure and Reform to examine these proposals and revert to me with its recommendations.

Capital Taxes

  A key element of this budget has been to ensure fairness. In that context, I am introducing a number of measures in the area of capital taxes to ensure that people with wealth make a fair contribution to the State. These include decreasing the threshold at which capital acquisitions tax applies by 10%, increasing DIRT from 30% to 33% and increasing the rates of capital acquisitions tax and capital gains tax by 3% to 33%, all changes to take place from midnight tonight.

Corporation Tax

  Our recovery plan has been and remains export-led growth. I have already set out measures by which we will extend the recovery to the SME sector.

  Retaining Ireland's competitiveness for mobile foreign investment remains a central plank of this Government's export-led recovery strategy for Ireland. The Government remains 100% committed to maintaining the 12.5% corporation tax rate-----

Deputy Bernard J. Durkan: Information on Bernard Durkan Zoom on Bernard Durkan Hear, hear.

Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath If companies pay at all.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan -----a sentiment I believe is shared by the vast majority of Deputies in this House. Even though this commitment has been stated numerous times, it is worth repeating so that there can be no doubt.

Ireland has for the past 50 years sought to have a competitive corporate tax strategy to attract job-rich foreign direct investment into Ireland. Our policies in respect of tax co-operation and international exchange of tax information have always earned international respect.

It is in this context that I am very pleased to announce today that Ireland has become one of the first countries in the world to agree a new intergovernmental agreement with the United States in respect of the US Foreign Account Tax Compliance Act, commonly known as FATCA.


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