Budgets will provide for a 2:1 split between public spending and tax reductions.
Goal – Keep broad tax base.
Income tax:
- Aim is to reduce the rate of tax on work.
- Any new tax incentives will be subject to detailed cost benefit analysis, public consultation and Oireachtas debate.
- There will not be indexation of personal tax credits and bands.
- It is proposed to remove the PAYE tax credit for high earners and look at other measures to ensure the tax system remains fair and progressive.
- It is proposed to phase out the USC.
- It is proposed to reduce excessive tax rates for middle income earners and limit the benefits for high earners.
- The focus is on low and middle income earners.
- Increase small benefits exemption to €650 (from €500)
Business taxes:
- Maintain 12.5% Corporation Tax rate
- Increase the earned income tax credit to €1650 to match the PAYE credit by 2018.
- SMEs to reward key employees with share options in a tax efficient manner.
- PRSI scheme for self-employed.
- Supportive tax regime for entrepreneurs and the self-employed.
- Maintain the 3 year tax relief for certain start-up companies until end of 2018.
Rental Income:
- Will maintain enhanced tax relief for landlords who accept rent supplement and HAP tenants.
- Will examine other tax relief proposals to encourage supply of private rented accommodation and look at the option of incentivising developers to build and lease back homes to housing authorities and associations.
CGT:
Reduce CGT for new start-ups to 10% from 2017. Property to be held for 5 years and a cap of €10 million will apply for gains.
CAT:
Raise the Band A threshold (including all gifts and inheritances from parents to their children) to €500,000.
Farming:
- Strategic change to support farm incomes and land mobility.
- Greater profitability and increased productivity.
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Land leasing, partnership and mobility measures
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