Budget 2018: Minister commits to wider tax bands

Minister for Finance Paschal Donohoe has committed to widening the tax bands and assisting the self-employed in Budget 2018.

Mr Donohoe gave a presentation to a private meeting of the Fine Gael parliamentary party in Co Tipperary yesterday, where he stressed the priority in next month’s package would be to make “steady and affordable progress to reduce high tax rates for low and middle-income earners”.

The Minister said every euro earned over €33,800 was subject to the 49 per cent rate of tax. Widening the tax bands, recognising the contribution of self-employed and amalgamating the universal social charge (USC) and PRSI over time were the three solutions being explored by Fine Gael.

On Budget 2018, Mr Donohoe said the Government would invest in new supports to assist families and to help businesses plan for the future.

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He said next month’s goal would be to balance the books, but the Government had to ensure security remained in risky environments.

The Minister was questioned about the retention of the 9 per cent VAT rate for the hospitality sector during a questions-and-answers session with Fine Gael members.

Mr Donohoe insisted no decision had been made on the tax measures, but understood the concerns of those in the sector. It cost a significant amount of money to retain that measure, the Minister told members, but there would have to be other proposals put in place in its absence.

New Dáil term

The Fine Gael party met in Co Tipperary ahead of the new Dáil term, which is due to begin next week.

Taoiseach Leo Varadkar opened the conference with a commitment to reduce taxes for middle-income earners. He vowed to create a new social contract with the principle that “everyone who can should make a contribution, and everyone should benefit in return”.

“High taxes on the middle classes are a barrier to opportunity and to work. They are a cap on aspiration, and there should be no cap on aspiration in the Republic we wish to build.”

He said businesses, farmers and enterprise would be the priorities for Fine Gael, and middle-income earners would financially benefit in Budget 2018 by lower taxes.

Minister for Housing Eoghan Murphy also gave TDs, Senators and MEPs a briefing on the new capital investment plan and the National Planning Framework, which will be announced in November.

New jobs

The Minister said there would be a population increase of 20 per cent between now and 2040, which required 600,000 new jobs.

The day ended with a discussion on how the “Republic of opportunity” theme could be explained to the public.

It was agreed Fine Gael would reward work ensuring fair pay for the private sector and the self-employed, making childcare more affordable, and allowing the elderly age with security and dignity.

Mr Varadkar stressed the theme of his tenure in office would be creating a Republic of opportunity, which he insisted was not a PR slogan but a commitment to equality.

Fine Gael would pursue the politics of progress and change, and not follow the path of others Opposition parties – especially those on the left – who, he said, prefer when their constituents are “down and dependent”.

“They want the system to fail so they can build influence and support.”