The higher rate of income tax will decrease by 1% while the amount a person can earn before entering the higher tax bracket has also increased under Budget 2015 announced today by Minister for Finance Michael Noonan.
The income tax standard rate band will increase by €1,000 to €33,800 for a single person and changes will be introduced to the Universal Social Charge which will mean workers earning less than €12,000 will not have to pay it.
The higher rate of income tax will come down by 1% from 41% to 40% while the entry rate for the USC goes up from €10,000 to €12,000. The existing 2% USC rate will be brought down to 1.5% and the 4% rate will fall to 3.5%. A new 8% USC rate is being introduced for those earning over €70,000.
The Minister announced the ending of the 0.6% Pension Levy at the end of 2014. The additional 0.15% Pension Levy introduced for 2014 and 2015 will expire at the end of 2015.
From Midnight tonight the price of 20 cigarettes will increase by 40 cents, with a pro-rata increase on other tobacco products. This will bring the price of a box of the most popular brands to €10. There were no tax increases on alcohol, petrol, diesel, motor tax or Vehicle Registration Tax.
A wide variety of tax changes were also brought in for farmers “designed to encourage more productive use of agricultural land”.
The Tourism VAT rate of 9% remains in place and income tax relief on water charges are among the other headline announcements in the Budget.
Minister Noonan stated that the 12.5% corporate tax rate would not be altered but announced the abolition of the Double Irish scheme.
Fáilte Ireland and the Restaurants’ Association of Ireland were quick to welcome the continuation of the reduced rate of 9% VAT for the hospitality sector announced on Tuesday by Minister for Finance Michael Noonan.
North Clare Fine Gael Senator Martin Conway said the 9% VAT rate contributed to “a very positive year for tourism in Clare”.
“Local business owners in Co. Clare benefitted from the 9% VAT initiative which to date has supported and protected jobs in the sector, and has helped tourism and leisure businesses to lower their cost base to attract more customers. This extension of the lower rate will enable the industry to plan and to market for next year in the knowledge that County Clare will be able to offer lower-cost tourism options to tourists and local people who are frequenting our, pubs, hotels and restaurants.”