Social contribution report due

A GROUP assessing the impact of the proposed universal social contribution (USC), to replace employee PRSI, and the health and income levies will report to Minister for Finance Brian Lenihan within weeks.

Mr Lenihan announced his intention to introduce the charge on income in his budget speech last December.

“A new universal social contribution will replace employee PRSI, the health levy and the income levy. It will be paid by everyone at a low rate on a wide base as a collective contribution to public services,” he said.

He also said income tax would apply on a “progressive basis” to those with higher incomes, “reflecting their capacity to make a greater contribution”.

A spokesman for the Department of Finance confirmed last night the group assessing the proposal was close to finalising its report to the Minister.

“The possible parameters of such a system have been under active examination by the Department of Finance in consultation with the Department of Social Protection, the Revenue Commissioners and other departments concerned.

“A steering group and a number of working groups have been established to carry out the necessary research. The steering group is nearing competition of its work and is expected to finalise its report shortly.”

The spokesman said the Minister would “make a decision as to the next appropriate steps for the USC”.

In his budget speech, Mr Lenihan said the two charges on income would be introduced with a view to restoring balance in the income tax system.