THE GOVERNMENT has complained to the European Commission over the release in Germany of a document disclosing confidential details about new taxes to be introduced in Ireland over the next two years.
In a deeply embarrassing development the document – identifying austerity measures of €3.8 billion in next month’s budget and €3.5 billion in budget 2013 – was made public after being shown to the finance committee of the German Bundestag yesterday.
The document, seen by The Irish Times, confirms the Government plans to raise VAT by 2 percentage points to 23 per cent, which would generate €670 million. Next month's budget would also contain a €100 a year household charge, yielding €160 million, it says.
A further €100 million would be raised from a reform of capital gains tax.
Turning to budget 2013, to be presented next year, the Government says it plans to broaden the income tax base, restructure motor taxation and increase excise duty. This budget would generate an extra €1.25 billion in tax and cuts of €2.25 billion, according to the proposals, submitted by the Government to the EU-IMF troika.
Germany’s federal finance ministry confirmed yesterday that it had forwarded troika documents to the 41-member Bundestag budgetary committee in line with its legal obligation under European Financial Stability Facility guidelines.
“Without this obligation to inform the Bundestag we are unable to pay the next tranche. To free up the next tranche today in Brussels we had to inform yesterday about the EFSF legislation,” said a finance ministry spokesman.
The documents include two letters of intent from Minister for Finance Michael Noonan and a memorandum marked “confidential draft”.
In this, the Minister says the Government will propose €3.8 billion of consolidation measures in the 2012 budget.
“Revenue measures to yield €1.6 billion including: an increase in the standard VAT rate; increases in other indirect taxes; a property tax; a reform of capital gains tax and capital acquisitions tax”.
Reneging on a promise made in submissions to the troika would be “counterproductive”, a Bundestag budgetary committee member yesterday.
The manner of the document’s release led to scathing criticism of the Government by the Opposition for allowing a situation arise where German parliamentarians learned of Irish budgetary proposals before the Oireachtas had any sight or knowledge of them.
Taoiseach Enda Kenny said last night he had “no idea” how details of the forthcoming budget ended up being discussed in the Bundestag in Germany.
“Let me confirm something to you, the Cabinet has made no decision in regard to the budget which is on December 6th,” he said, referring to the documents specific references to the budget.
Tánaiste Eamon Gilmore said the circumstances of the leaking would be investigated.
“I have discussed it with the Taoiseach and I mean we’re puzzled by it for a start but secondly we’re also quite annoyed that material relating to our budget is being discussed in another parliament before the Government has made decisions on it.”
He stressed the budget was not finalised, and decisions on tax matters had not been made.