I attended the Irish Tax Institute's budget breakfast briefing this morning and after the main facts were presented, an expert panel provided their commentaries and analysis on the budget. One such opinion was that this year's budget provided a line in the sand and I have to say I agree with this analogy.
It is easy to forget that this is the 7th austerity budget for Ireland, and already a significant effort has been made in reducing the government deficit and a return to the international markets. It is also important to point out the taxation adjustments needed to be made were cut from €3.1b to €2.5b, so the starting target was already positively reduced.
This year's budget has not escaped austerity and many will feel the brunt again. However the many measures implemented in this one, in fact a total of 25 measures, are aimed at supporting entrepreneurship, jobs and growth. The construction and building sector has benefited greatly, as has the tourism, farming and agri-food sector.
For employees, it was welcome news to hear that there are no changes in the rates or bands for income tax, Universal Social Charge or Employee PRSI.
Finally Minister Noonan reiterated that the Government is 100% committed to the 12.5% corporation tax rate again. This will not change. He also announced the publication of an International Tax Strategy Statement which sets out Ireland’s objectives and commitments, in relation to international corporate tax issues. This has already received positive press in the international media.
Here are some of the key features of these positive measures:
Although the above measures are positive, I would recognise there is a lot more to do. It is still an austerity budget and for some groups, not enough was done in terms of reliefs and benefits. I still believe we pay too much tax overall but for now, it is fair to say, a line in the sand has been drawn and Ireland can look positively into the future.
Do you agree?