Today's other Budget news in brief
Room rental scheme to be modified
The scheme through which house owners can claim tax relief on renting out a room in their home will be modified.
From January next year, it is proposed to close off the scheme where the rent received is from a connected person who is in turn claiming rent relief. The Government estimates that this measure will yield €200,000 a year.
Base rate on home loans to reach 4.5%
The base rate used to calculate the taxable benefit for employees who have preferential home loans is to be increased.
The rate is increasing from 3.5 per cent to 4.5 per cent to reflect increases in interest rates.
Employees in receipt of a preferential loan is charged on income tax on the difference between the interest actually paid and the amount that would have been payable at the "specified" rates of interest for the loans.
Public contract tax cert limit to rise
The threshold after which a tax clearance certificate is required before a public sector contract can be granted will increase from €6,500 to €10,000 with effect from January next year.
VAT on child car seats falls to 13.5%
The VAT rate on child car seats will be reduced from 21 per cent to 13.5 per cent from May 2007. The cost of this measure is less than €250,000. The option of cutting the VAT rate to zero is not permitted under EU law.
Siptu criticises 'miserly' Budget
Siptu criticised the Budget for being "miserly" towards mothers and children. This was because the Government had failed to adequately increase child benefit or extend it to all families, or to raise the amount paid to most women on maternity leave.
"Working mothers will be extremely disappointed to find that during their maternity leave, their income support will continue to be a poor proportion of their pre-leave pay," said the union's national equality secretary, Rosheen Callender.
Despite the union's "long-standing plea" for a "realistic increase" in the amount of reckonable earnings allowed when calculating maternity benefit, this had only been raised to €350 a week, which is about 57 per cent of average industrial earnings.
The €10 a month increase in child benefit, combined with the "non increase" in the early childcare supplement, meant that most families would receive an increase of only 33 cent a day on behalf of each of their children, she added.
Vintners dismayed over excise duty
The Vintners' Association of Ireland (VFI) has expressed disappointment that excise duties were not cut in the Budget.
"It would appear that this Government is determined to ignore the seriousness of the situation and as a result competitiveness goes out the window," said Paul Stevenson, president of the VFI.
"Ireland's wine and beer tax is already the highest in the EU, and spirits tax the second highest. Our excise duties are extortionate."
Measures 'failed to create fair society'
Focus Ireland gave a broad welcome to the increases in the social welfare area but stressed the Budget had failed to deliver on the Minister for Finance's promise of building a "fairer" Ireland.
This could be seen in the fact that more than 43,000 households were on the housing waiting lists.
Focus Ireland's chief executive Declan Jones said: "We are very disappointed there was no real action taken in the Budget to provide more housing for those in need."
Stamp duty still 'needs overhaul'
Doubling the mortgage interest relief available to first- time buyers will underpin an active housing market in 2007, according to Construction Industry Federation director general Liam Kelleher.
However the Government still needs to overhaul the stamp duty regime.
Also an opportunity to promote sustainable buildings has been missed.
Ibec welcomes tax credit changes
The changes in the R&D tax credit scheme and the Business Expansion Scheme will provide a welcome boost to Irish businesses.
The 13 per cent increase in capital expenditure will help to address the country's current infrastructural shortfall.
However, the Budget is weighted towards increasing domestic demand rather than increasing the country's level of exports.
'Mixed bag' fails to tackle costs
The 2007 Budget is a "mixed bag", Isme said. It failed to tackle the cost of the environment in which companies operate, and the 11.5 per cent increase in current Government expenditure may exacerbate inflation.
This short-term gain could have long-term repercussions on the State's competitiveness.
ITI welcomes help for business
Irish Taxation Institute chief executive Mark Redmond has welcomed the Budget changes which favour small business. In particular he praised the changes to preliminary corporation tax payments and the extension of the BES and seed capital schemes.
Energy fund just a 'token gesture'
While the changes to the BES and seed capital schemes are welcome, the Small Firms Association feels that the €3 million SME fund to promote energy efficiency is a "token gesture".
According to chairman Pat Crotty the fund will fail to address cost increases and competitiveness issues facing small businesses.
'Pro-business' Budget 'prudent'
Chambers Ireland Chief executive John Dunne described the Budget as balanced and prudent, and welcomed "pro-business measures" contained in the Budget such as increasing the BES ceiling and the VAT registration thresholds, and streamlining Revenue procedures.
However the €10 million earmarked for local authorities is in inadequate, he said.
The amendments to the R&D tax credit scheme were welcome, but they do not go far enough in increasing Ireland's attractiveness as an investment location for R&D activities.
Cowen 'wisely' promotes business
Brian Keegan of the Institute of Chartered Accountants welcomed the changes to the corporation tax payment rules, the BES scheme and the tax relief for R&D activities.
"Tax incentives influence commercial behaviour and the Minister has moved wisely today to promote business activity," Mr Keegan said.
Kudos for child benefit increases
Minister for Finance Brian Cowen was congratulated by Barnardos on the steps announced to end child poverty, such as the increases in Child Benefit and Child Dependent Allowance.
However chief executive Fergus Finlay said that while these increases were welcome he described them as very modest.