One of the most anticipated Budgets of recent times was presented by Minister Noonan this week. Although, many of the measures announced had been expected, there were a few surprises.
PwC Kilkenny, in conjunction with the Kilkenny Chamber of Commerce, held its annual Budget Briefing in the Kilkenny Ormonde Hotel on Wednesday December 7 last.
Ronan Furlong, Tax Partner, PwC South East, spoke of the changes to taxation introduced on Tuesday. The main issues discussed were:
No change to corporation tax rate of 12.5 per cent. This reinforced commitment to the 12.5 per cent rate is a positive measure for corporate entities operating in Ireland, both indigenous and foreign. There were also some welcome pro- business measures to encourage investment into Ireland and R&D.
We can breathe a sigh of relief that from a tax point of view, our pay packets in January 2012 will be the same as our pay packets in December 2011 as income tax rates, bands and credits have remained unchanged. From January 1, 2012, individuals with total income of lower than €10,036 (previously €4,004 ) will be exempt from the Universal Social Charge (“USC” ).
Our pockets will be hit however, by the 2 per cent increase in the standard rate of VAT from 21 per cent to 23 per cent, effective from January 1, 2012. This increase is a revenue generating move by the Government, but there is doubt that this increase will have the desired effect. In addition, there was a significant cut to the employer redundancy rebate.
The household charge of €100 per household will be effective from January 1, 2012. This charge will be replaced by a charge on property values from 2014 onwards.
Motor tax rates for all vehicles will increase from January 1, 2012. CGT and CAT rates of tax were increased to 30 per cent.
Overall there were some positive pro business initiatives; however the increase in indirect taxation will place a further strain on hard pressed consumers.
Jane Devlin, PwC
