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Personal Tax
• No increases in rates of income tax, USC or PRSI
• Tax relief for medical insurance restricted
• Tax relief for investment in partnerships removed
• Home renovation incentive introduced
• DIRT and similar taxes increased to 41%
• Top slicing relief abolished
• One Parent Family tax credit to be replaced with Single Person Child Carer tax credit
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Pensions
• Pension fund levy to increase in 2014
• Standard fund threshold reduced
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Business Tax
• New Start Your Own Business incentive announced
• EII removed from high earner’s restriction
• New film relief changes announced
• Scope of Living City Initiative extended
• R&D tax credit improvements announced
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VAT
• 9% rate on tourism related services retained
• Cash accounting threshold increased to €2m
• Farmer’s flat-rate addition increased to 5%
• Anti-fraud measures announced
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Capital Gains Tax
• Property purchase incentive extended
• New entrepreneurial relief introduced
• Retirement relief for farmers improved
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Other Taxes
• Increase of 10 cents on packet of 20 cigarettes
• Increase of 10 cents on pint of beer/cider
• Increase of 50 cents on bottle of wine
• Air Travel Tax reduced to zero
• Stamp duty on ESM traded shares removed
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Economic Overview
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Today’s Budget will increase tax take from €37.8bn in 2013 to €40.04bn in 2014.
Government spending (current and capital) will reduce by €1.52bn. The Government is anticipating a further reduction in spending of €440m in 2015. In the context of forecasted low GDP growth in the Euro Area and the UK for the next few years, the Government is expecting economic growth (GDP) of 2% in 2014, 2.3% in 2015 and 2.8% in 2016, with a small reduction in unemployment in each of those years. The budgeted deficit as a percentage of GDP is continuing to move in a positive direction. After targeting for a 7.5% figure for 2013, an out-turn of 7.3% is now expected and is budgeted to further reduce to 4.8% in 2014. However, the General Government Debt as a percentage of GDP is projected to reduce from 124.1% in 2013 to 120% in 2014. The difficulty for the Government in framing Budget 2014 is that income tax for self-assessed individuals is due to be paid in October and November 2013. 14% of the 2012 total income tax yield was collected in November 2012. Any shortfall will have an impact on Government targets.
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