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MORE ON BUDGET 2012

Taxation changes will not be agreed by government until next week, with the spending cuts being decided first, according to The Sunday Business Post.  

“The controversial €100 household charge and further changes to hit tax exiles will also form part of the tax changes. USC reductions, hitting tax exiles and increasing the pupil teacher ratio in fee-paying schools, are all attempts to quell disquiet among Labour backbenchers,” the newspaper says in its lead article.

“While income tax will not be increased, the Minister for Social Protection, Joan Burton, will propose a hike in the PRSI payment, if her controversial plans for reforming the sick pay scheme and redundancy rebates are not included. A further proposal to extend PRSI liability to income from areas such as rental, dividends, shares and other investments is now likely to be adopted.”

The newspaper says Burton is thinking of raising employers’ and employees’ PRSI of 0.5% for higher earners to pay for a €200m saving it will cost to reform sick pay and redundancy schemes. Changes to capital gains tax and inheritance tax also remain on the table.

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