The government is looking for tax hikes totalling between €500m and €750m in the next Budget but a final decision on where the burden will fall will not be taken until November, according to The Sunday Business Post.
However, government sources say the bulk of any tax increases will likely derive from reforming the current system of allowances and credits, which would mean a greater proportion of lower income earners paying tax.
Caught between a capital spending rock and a Croke Park agreement that rules out any more cuts to public sector pay, the government has limited options when it comes to raising the money it needs to keep the deficit in check. It would appear the favoured option is now to cast the tax net wider.
In a case of ‘now you see it, now you don’t’, Green Party minister Ciaran Cuffe removed a proposal on his blog calling for a new property tax – but not it would appear, before it was seen by most of the Sunday newspapers.
The Planning Minister proposed that instead of raising income tax, the government should abolish stamp duty and introduce a self-assessed property “levy” ranging from €200 to €600 based on a square metre basis.
Cuffe removed the blog “following consultation with colleagues”. Although Cuffe’s view was described by the Green Party as personal, commentators say it adds more weight to those who believe the government is considering broadening the tax base by introducing some form of property tax.