Irish Finance Minister Michael Noonan put the budget 2017, which largely focuses on the reform of the income tax system and the competitiveness of the corporate tax regime.
The sixth part of the Noonan’s budget as Minister of Finance, includes tax reforms to “reduce the burden on taxpayers just under EUR 300 million (USD 330.6 million).” He explained that “these changes include around EUR 500 million in tax cuts, offset by measures to increase tax revenues in the amount of EUR 195 million.”
As expected, Noonan decided to reduce the Universal social charge (USC), albeit at a slower pace than indicated in the government’s pre-election manifesto.
Announcing the measures, he said: “Extremely high tax rates act as a brake on employment They distract people from the jobs and divert immigrants from returning home.”.
Noonan admitted that he had “limited resources to change the situation,” but said that it will allocate EUR 335 million to reduce each of the three lower USC rates by 0.5 percent. As a result, these bids will now be 0.5 percent, 2.5 percent and five percent. The ceiling of the band, which decreased 2.5 percentage payable rate will be increased from EUR 18,668 to EUR 18,772.
“Despite the relatively small coverage, these changes will have a significant impact on the disposable income from earnings of workers with low and middle – more importantly, it signals the Government’s intention to phase out the USC for a long time, as resources permit,” he said.