April Budget Could See Tax Levy Hike

Brian Lenihan is considering immediate increases in the controversial income levy as part of next month's emergency budget.

Following the discovery of a €2billion shortfall in the Government's balance for the year, a raft of measures are expected to be introduced to fill in the financial hole.

Excise duties are also expected to be raised, along with a €1 billion-plus cut in capital spending.

Cutbacks in social welfare and the health services are also being considered.

the income levy was introduced in October to much public outcry, and the current charge is expected to be raised further for the remainder of 2009, instead of increasing the normal rates of tax.

At present the charges amount to a 1% charge on income up to €100,100 per year, 2% on income between €100,101 and €250,120 per year, and 3% on income more than €250,120 per year.

Although no final decision has been taken, the government is expected to favour increasing the levy rates, with high earners being the worst affected.

Government Coallition members, the Green Party, have already announced they are seeking the introduction of a "super tax" on incomes over €100,000 in the ongoing emergency budget negotiations.

According to reports, the super tax, or third PAYE rate, could be as high as 48%, but no definitive figure has been set by the Green Party as it heads into three weeks of intense budget negotiations with its coalition partners, Fianna Fáil.

(DW/BMcC)