Nearly one million middle-income earners and couples could save up to €1,000 a year if the government introduced a new 30% tax rate into the budget.
The government on Wednesday issued a tax strategy document outlining options available for tax changes in the 2023 budget.
These papers reveal that middle- and high-income earners are most likely to benefit from such tax cuts, while low-income earners receive little or no benefit.
A 30% tax rate band covering incomes between €36,800 and €46,800 translates into annual tax savings of €1,000 for individuals.
The Ministry of Finance today #Budget2023 Papers of the Tax Strategy Group.
— Department of Finance (@IRLDeptFinance) August 10, 2022
The Ministry of Finance estimates that such a measure would cost €820 million in the first year and €945 million annually thereafter. His 35% of taxpayers are believed to benefit.
As a second, more limited option, the article states that a 30% tax rate applies to income between €36,800 and €41,800.
This will improve the life of an individual or a couple by €500 per year. This option would cost him €460 million in the first year and €525 million annually thereafter.
Currently, singles with an annual income of €36,800 or less pay income tax at the basic rate of 20%, and singles with an annual income above that level are taxed at 40%. Ireland’s entry point to higher income tax rates is low by international standards.
The current two-rate income tax structure has been in place since the early 1990s.
The tax strategy document called for “complex changes” to create a new tax belt “to ensure the feasibility and operability of the new structure” and “major changes” to changes in revenue systems and payroll providers. ‘ will be needed.
Thanayste Leo Varadkar told reporters in Dublin on Wednesday that a 30% tax rate was being considered as one of many options open to the government.
“A 30% tax rate for the middle class, or the possibility of an intermediate tax rate, is being considered. shows how much it will cost.
“But the most important thing to stress about the budget, which is just a month away, is that it includes a substantial income tax package that cuts income taxes for low and middle income workers. It is aimed at income and high-income workers, but with a particular focus on middle-income workers.”
Mr Varadkar said a budget tax would be one of the ways the government tries to bring down the cost of living.
Over 450,000 taxpayers are overpaying the Ministry of Justice…
He said the packaging “will be more amazing than anything people have seen in recent years.”
The Tax Strategy Group released a number of papers related to tax issues on Wednesday ahead of the September 27 announcement of Budget 2023.
A group is not a decision-making body. The document lists options to be considered as part of the budget process.
The Tax Strategy Group is chaired by the Ministry of Finance and consists of senior officials from various departments and political advisors.
https://www.breakingnews.ie/ireland/tax-strategy-papers-30-rate-could-save-middle-earners-e1000-a-year-1348147.html A 30% tax rate saves middle-income earners €1,000 a year