As the government looked at income tax changes, Donohoe says, "We want workers to keep as much as they earn."

Minister for Finance Paschal Donohoe also said the Government is also looking at the options in relation to increasing rates of social welfare. Photograph: Gareth Chaney/ Collins Photos

IRELAND: Minister for Finance Paschal Donohoe has said any moves to introduce a new 30 per cent tax rate would aim to help people to keep as much of any wage increases as possible.

The Government knows the money in a person’s wallet is not purchasing as much as it used to, so indexation is important as wages go up so people do not end up paying more tax, he said.

Mr Donohoe’s comments come after it was reported the upcoming budget is set to see a landmark tax package for workers. The Government is now pledging a tax package that will benefit almost all employees.

Up to two million people might have their take-home pay increased by indexing tax bands and credits, according to budgetary alternatives documents released by the Department of Finance on Wednesday. Depending on the choice, this would cost between €630 million and €1.1 billion year.

In a time when salaries are rising, Mr. Donohoe said, "We feel we should be doing what we can to help people keep as much of the money they are earning." According to him, the government's goal is to make personal taxation more affordable. "We wish to assist."

In comparison to other nations, people join higher tax bands while earning an average pay, according to the Minister, who added that a 30% rate would be more equitable. However, he issued a warning that any tax changes were challenging to put into effect in a calendar year due to the adjustments that companies would need to make.

According to Mr. Donohoe, the government is considering its options for raising social welfare rates in order to assist the most disadvantaged citizens. But, he claimed, such numbers could not be conjured up out of thin air.

Budgetary options documents show how core welfare rates might increase by as much as €15 a week in some scenarios, which would cost €1.1 billion. This would be a threefold increase over last year.

"We are considering what is doable and inexpensive." The Minister stated that he had no plans to alter the €6.7 billion in available funds, adding, "we will stay inside the limitations." The budget this year will include one-time measures to help with the expense of living, he said.

Mr. Donohoe stated on the same occasion that the department's budgetary options documents do regard minimum alcohol pricing as a risk.

The government imposed minimum unit pricing in January, requiring that each gramme of alcohol cost at least 10c. People are crossing the border to buy alcohol because Northern Ireland does not currently have the same regulations in place, where they can spend up to €3,000 at a time

“Our papers yesterday do acknowledge this as a risk,” Mr Donohoe said.

"I have recently admitted that any big adjustment in the price of alcohol in our own nation could in fact potentially lead to consumption and purchase taking place elsewhere.

"At this time, I do not see that risk developing significantly because it is not currently occurring in our economy, but we did acknowledge yesterday that if there comes a time when the price of alcohol is significantly different in the North and here, that could be a catalyst for cross-Border shopping.

Although it has always been the case, I don't see it happening right now.

Speaking of other fiscal concerns, the Minister noted that while he can see why people might advocate for more taxes on the energy industry, he still has his doubts.

Following a 74% increase in earnings at Bord Gáis Energy, Sinn Féin, Labour, and People Before Profit pushed the government to enact a windfall tax on energy firms last week.

In order for Ireland and Europe to become more energy independent and avoid the dangers to energy security that are currently a problem, Mr. Donohoe told RTÉ Radio's Morning Ireland that the renewable, wind, and solar sectors needed to be delivering more electricity.

He added that the current focus should be on developing new offshore wind energy sources since "any sudden change in how those sectors are taxed could damage that potential to get to that independence at a point in the future, particularly when other types of energy are being compromised."

Róisn Shortall, the co-leader of the Social Democrats, demanded that any budgetary increases for social welfare be subject to benchmarking. She told Morning Ireland that even when receiving social assistance, one should be able to live a dignified life.

Tax reductions, according to Ms. Shortall, are not the greatest way to spend public funds. She argued that index linking should be implemented to benefit all citizens equally and that those who receive pay rises to keep up with inflation shouldn't be required to pay more tax.

According to Ms. Shortall, more should be "clawed back" at the top end because it is unfair for someone making €500,000 to receive the same tax cut as someone making €36,800 under the suggested new tax categories. Such measures, according to her, would be a highly expensive method to implement tax reform.

According to Ms. Shortall, the Tánaiste appeared to be "anti-tax" like the leaders of the UK Conservative Party.

She emphasised the significance of taxes, saying, "None of us like paying taxes, but they pay for public services. The social contract need to be in place.

She claimed that the ideas "do nothing" for the 20% of the workforce who are low-income, and that the tax base should not be eroded.

To get the latest news & information from www.indiansdaily.com click on the link and follow:  Indian in Ireland | Accommodation |