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THE FIRST DOCUMENTS released for Budget 2013 reveal that Ireland’s tax take for 2012 is likely to miss its targets – despite Exchequer income being head of monthly targets for most of this year.
The Department of Finance’s estimates for government spending and income for 2013 also outlines areas where the government expects to take in extra cash in 2013 – and points to the probability of cutbacks in income tax credits in Wednesday’s Budget.
The documents, published this morning, show that the government now expects to take in a total of €36,165 million this year – about €210 million (or 0.59 per cent) less than it had forecast at the beginning of the year.
This is largely down to a shortfall in tax receipts from the self-employed, and a shortfall in excise duty – which is set to be increased in Wednesday’s Budget.
VAT and corporation tax remain ahead of expectations, however, while income tax receipts are likely to be only marginally lower than had been expected when last year’s Budget was announced.
Though the figures for 2013 project a 4.5 per cent increase in income tax receipts, the Department of Finance said its 2013 projections were based on the current legal situations and did not account for any measures that may be introduced in Wednesday’s Budget.
However, previous Troika documents outlined that the Government would try to cut spending by about €2.25 billion, partly through a reform of the income tax system.
Having ruled out the introduction of any new tax bands, and with the government having previously committed to not raising income tax rates, this is likely to mean a reform of the tax credit system and deciding not to adjust tax bands, which will bring more people into the tax net.
The documents also show Ireland’s Budget deficit for 2012 is likely to stand at 8.2 per cent of GDP, well inside the 8.6 per cent target set down by the Troika programme.
However, the current projections for 2013 show the deficit standing at 8.9 per cent of GDP – largely because of a €3.1 billion increase in government spending, split roughly equally between capital (one-off) and current (day-to-day) spending.
Again, however, these figures do not include the effects of measures to be confirmed on Wednesday, such as the new property tax.
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Imagine that, 5 consecutive budgets of austerity, and every time the tax receipts from income tax and the self employed have shrunk. What do these gombeens expect?
They want the ordinary people to pay property taxes instead of introducing a wealth tax on the top 10%. Since the 1980′s, taxes on the top 10% have been falling due to tax breaks such as:
- the double Irish arrangement tax scheme
- the tax break on group companies
- the tax rebate on company cars
- the low dividends tax
8.6% was a limit not a target, it’s like congratulating yourself for not maxing out your credit card.
His government want a blank cheque through water charges and property tax. Rich people are rich because they keep their money. I work for rich people and it is like pulling teeth trying to get them to pay their fair share. There is no trickle down theory. That is a myth. Rich people can give up a small portion of their wealth for the country that has allowed them to be rich. But FG is a party for the rich.
Sums up this inept Govt perfectly. Falling Short should be fg/lab motto.
There i was being all happy that I was about to finish paying off a loan and have a bit of extra income per week. Now it’s just gonna be taken right back off me. Every time you try to get out they drag you right back in.
Fianna Fail & FG’s tax cuts failed the economy and industrial bankruptcy. These tax breaks must expire asap In order to keep 90% people able to buy, keep their tax level and thus help the economy grow back. No different to G.W Bush policies.
I don’t know who is making these projections but they would want a reality check ! They are projecting an increase in income tax receipts in 2013 but there are less and less people working …… They must really be pulling figures out of thin air !
You’d think that a deficit of 8.6% deficit after 4 years amounted to success. For all his sins CJH closed a FG/lab inherited deficit of 8% to 3% in one year (1987). The McCarthy report remains unimplemented, Croke Park Agreement has placed many savings beyond reach and a politician is (properly) commended for forgoing a €33k severance package for resigning. The lack of reality is frightening!
Its not a lack of reality its a distortion and manipulation of reality
Let’s see…
Fianna Fail also wanted no debt ceiling imposed on their administration. They wanted to place taxes on the middle class and low that would almost certainly increase unemployment and very possibly send the country back into recession. Kenny wants no changes to the top 10% wealthy or the Promissory Note, ensuring that these programs will continue on their path to bankruptcy. And he wants an additional “stimulus” appropriation, which based on past experience (think car stimulus, Fianna Fail, etc) means money to give to his large donors.
Pearse Doherty is recommending a form of revenue that will have much less impact on the still fragile recovery from the most prolonged recession since the great depression, and which will not impact job creation. He is recommending steps that would slow down the impending bankruptcy of Healthcare and Education. And he is retaining oversight over spending by opposing to give our profligate Taoiseach a blank check to Banks.
Now that the elections are over, Mr. Kenny has taken a hard right turn, back to his roots, completely ignoring his campaign rhetoric. To suggest that Fianna Fail are better ignores the facts on the ground.
Anyone surprised. Keep taking money out of the economy results in one thing only. Less revenue for the government.
I hate to be repetitive but I suspect that Kenny doesn’t really care about going over the cliff. He wants the tax cuts that going over the hill imply and the rest is pretty much peanuts. Similar to Fianna Fail tax breaks on the top 10%.
I don’t think he cares if the cuts hit the middle class and then he gets a chance to pass a new set of taxes only for the middle class and the top 10% get more tax breaks. That would make Fine Gael look like a party for the rich.
Continuing to increase taxes on ourselves for sustainable growth appears to make as much sense as selling houses to ourselves. We need even more support for real economic and export led growth to get cash in – in
addition to that from IDA, Enterprise Ireland and Tourism Ireland.
The USA had a top tax rate of 90% for decades and we never lost a Rockefeller because of it.
So I’ve looked into this. Do you know how many people in the US paid that much in taxation during that time?
236. 236 people paid the top rate. The rest was tax exemptions.
Taxation is detriment to economies and freedom. Nobody seems to get this.
Get over it. 236 people. No one works for 10c on the dollar. Would you?
Anybody earning over €100,000 should be taxed at the 90% rate. That way everybody gets a chance in life. My dreams have been stolen by the rotten few in this country and damn right I’m bitter about it!
Indeed, if we had maintained a top tax rate for years for those who
can well afford it (the key being maintaining that) to include our own
little Rockefellers, that would have helped dampen the property bubble
rather than introducing new taxes later on afterwards post property purchase frenzy up to 2008. The problem as I see it in this country is an increase in taxation year after year for people without a corresponding additional source of additional revenue for people and moreso for the economy as a whole. If we want economic growth we have to grow revenue for the economy in net terms and that will have to come from outside Ireland. At this stage, we have to look forward and decide what we can do to make things better, get cash into our economy (verus loans), invest in our education system and SMEs that have potential to generate revenue and jobs, develop and provide the key skills (many still in shortage including IT and language fluency) so as to be seen as the place to do business on the global stage.
How realistic minister noonan picture taken in the zoo where he was communicating with rest of the cabinet !! by the looks of it communications are going well. Now I know were I seen his face on a David Atrenbouragh wild life programme… during the mating season in the Gabon rain forest.
The explanation for the self employed returns are below expectation is down to the choice in preliminary tax calculation method. You can pay 90% of this years expected liability or 100% of last years liability. Most self employed opted for the latter option as profits in 2011 were lower than this year. The difference between the preliminary payment and the actual liability has to be paid by October 31 next year. The dept were right on their right on their calculation of total liability but wrong on how much of it would be deferred until next year for payment.
A lot of people operates with cash… Their number will increase …. And they are not to be blamed
Everything is better when Jonny Cash is playing in the background!!
i wonder why troika have not told our glorious leaders to cut. there own wages and perks . and cut. a few quangos . then. you would see our little enda stand up to them asap .
Enda the feckin Grinch!!!
For all their preaching about buy Irish and save Irish jobs I’d be interested to know how many state contracts and tenders went to Irish Companies in the past three years?
Do they practice what they preach?
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