The Government’s plans to reduce the tax take from higher earners will depend on how much the State gets in taxation this year, Finance Minister Michael Noonan has said, according to the Irish Examiner.
He denied that reducing income tax was a re-election ploy, adding the Government had “reasonable expectations of being re-elected”. He said as long as Fine Gael remains in power the changes demanded by the troika will continue, but said tax cuts were a method of creating jobs.
The higher rate of 41% income tax kicks in when wages reach €32,800.
“This is damaging job creation. We need to make work more worthwhile.
“As soon as we have the resources our first priority will be to widen the band of income tax so people can do overtime and take on extra work before getting into the higher rate”.
The Government had already cut tax to encourage tourism and even in the most difficult times they were prepared to reduce tax, he said. Mr Noonan did not reveal by how much he would widen the tax band other than “as much as I could”.
It would depend on the resources, but the State is only six weeks into the budget for 2014, and if the economy grew faster than the 2% predicated in the budget it would give more room for tax changes, he said.
The finance minister, speaking at a conference organised by the OECD on “Europe at a crossroads”, said Ireland had been quite successful at attracting foreign direct investment.
He put this down to the corporate tax system which, he said, made no exceptions for companies and provided certainty for companies as the tax rates were written into law.
He added that Ireland was co-operating with the OECD on the base erosion and profit-shifting work — which could have implications for the country’s system, including the ‘double Irish’.
Ireland was also attractive because people were well educated and English- speaking, he said.
Dublin had also become a cross-cultural city, non-judgmental where different lifestyles were respected, and this was a big plus also, he added. Source: The Irish Examiner.