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Ireland: ‘Carry-over’ tax haul to lessen budget pain

17 September 2012   (0 Comments)
Posted by: SAIT Technical
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By Juno McEnroe and Noel Baker (Irish Examiner)

Amounts in new taxes needed in the budget may be €300m less than previously forecast due to a ‘carry-over' in taxes collected this year, junior finance minister Brian Hayes said.

The amount needed in new taxes next year is expected to come to between €900m and €1bn, he said, as opposed to a previously forecast €1.25bn.

The reason is due to a full-year collection of measures such as increases in Vat and capital gains tax, the intake of which was delayed for 2012.

Vat was increased from 21% to 23% last December but the following January figures did not include the increased amounts as the data mainly related to November and early December.

The difference for a full-year collection of increased Vat will raise an extra €110m for the exchequer.

A similar carry-over in collections from increases in capital gains tax will also boost the exchequer.

The carry-over may mean less harsh measures brought in by the Government, under pressure to introduce a number of proposals including a property tax.

The Government originally forecast it would need to introduce €1.25bn in new taxes and €2.25bn in savings next year.

Mr Hayes told RTÉ: "It actually will not be as much as €1.25bn on the basis from the carry-over from this year, it's more likely to be maybe 900m to a billion [euro]. Effectively new taxes will be somewhere between 900m and a billion."

A spokesman for the Department of Finance confirmed less measures would be needed. "These carry-ons affect us getting more money from these taxes in 2013. They will lessen the amounts of new measures required."

Mr Hayes's comments come as speculation continued over the introduction of next year's property tax. It was reported yesterday that homeowners would be asked to assess the value of their properties themselves and could face fines if they undervalue homes.

Ministers refused to confirm or deny the reports.

Richard Bruton, the jobs minister, said: "Well I think all options are on the table, obviously. We've commissioned an expert group, chaired by Dr Dom Thornhill, to look at how the tax can best be structured. Self assessment has been used in the past for such taxes but no decisions have been taken."

Tánaiste Eamon Gilmore refused to be drawn on how properties would be valued when the tax is rolled out by Revenue next July.

"We are seeing a lot of stories about the property tax, none of which really have any basis because the Government has not yet made its decision as to how the property tax will be assessed and how it will be calculated.

"Those decisions have yet to be made and I think some of the stories that are appearing in the media are just pure speculation."


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