Donohoe promises not to increase income tax in next Budget
FINANCE Minister Paschal Donohoe has promised there will be no hike in income tax in October’s Budget.
Mr Donohoe also said personal tax receipts are ‘holding up quite well’.
He added that this month’s tax returns will be the final ‘piece in the jigsaw’ before the Government decides on next year’s budget. Mr Donohoe said, however, that he has no plans to go to government to increase income tax.
‘The tax receipts across June, July and August, particularly in relation to income tax, did show that the combination of having a very broad number of jobs in our country, and a personal tax code that has remained very broad and very fair in that period, has meant that our personal tax receipts are holding up quite well,’ the minister said.
‘In terms of what that says about our economy, it does indicate to me that momentum is building within our economy. This is why decisions in relation to the medium-term plan for public health are so important.’
However, he said that ‘in terms of the impact it’s going to have for Budget 2021, September is always a very significant month in terms of tax receipts, and it’s the final piece of the jigsaw before we make a call about what our tax collection is going to be for the year, and then the impact it is going to have on the following year’s budget’.
‘So, even at this point I will have to see another month’s worth of tax collection to form a view on whether the trend that we are seeing at the moment is one that is sustainable across the year and will carry into next year,’ he said.
The minister – speaking at the launch of the new Stay and Spend scheme, aimed at helping boost sales in the hospitality sector, which has been impacted by the Covid-19 pandemic – said there will, in a number of years, be a deficit that will be the result of ‘how we’ve had to increase spending as a result of new public health measures’.
But he added: ‘There’s no finance minister in the world that can indicate now what that deficit is or will be, because that’s going to depend on what happens when it comes to Covid, and it’s going to depend on how successful the policy measures are, as well as on the agility of the Irish economy.
‘But for budget 2021, in particular, that’s coming up. I’m not planning to go to Government with plans for increasing income tax.’
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Deficit ‘will depend on Covid’