Wednesday, October 15, 2008

Ireland's tax rates: guest blogger

Yesterday, October 14th, Irish Finance Minister Brian Lenihan presented his first budget, in which he increased VAT, reduced tax relief on medical expenses, put 8 cent on a litre of petrol, imposed new taxes on flights and car-parking, introduced new property taxes and brought in a brand-new 1% levy on all income, payable even by those earning minimum wage or less.

In the midst of all of this fiscal rectitude, you might think that the legendarily low 12.5% Irish Corporation Tax rate might inch up a tiny little bit, mightn't you?

In fact, Mr Lenihan had this to say on the subject.

"The 12.5% rate of Corporation Tax is an important element in our taxation system. It has been a cornerstone of our industrial development in the last decade. I want to emphasise that this rate of tax is not for changing upwards and it will continue to be a central part of Ireland's economic brand."

So next year, I suppose we can look forward to more taxes that apply to the old, the very young, those on low-income, while the Tax-that-is-not-for-changing-upwards will in all probability move downwards.

Dr. Sheila Killian, Kemmy Business School, University of Limerick, Ireland


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