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Minister for Finance Michael Noonan Laura Hutton / Photocall Ireland

Budget Day (pt 2) – the main points from Michael Noonan's announcement

Here are the main points of the taxation measures announced by the Minister for Finance in the Dáil today.

TODAY MARKED THE second day of Budget 2012, as finance minister Michael Noonan announced measures to raise €1.6 billion in new tax and revenue incomes.

Yesterday, Minister for Public Expenditure and Reform, Brendan Howlin, announced the government’s plans to public spending by €2.2 billion, with a €1.4 billion cut in day-to-day State spending.

While Noonan had to raise €1.6 billion, his task was softened by a ‘carry-over’ of around €600m from existing measures – meaning his tasks were only to raise €1 billion, with some €670m coming from the long-expected VAT hike.

See events as they happened on our liveblog here >

In full: Michael Noonan’s Budget speech to the Dáil >

Here are the main details from Michael Noonan’s Budget 2012 speech:

  • 50 per cent employer PRSI pension relief abolished
  • Legislate tax betting and betting exchanges. Betting duty will apply to remote betting
  • Tax exemption for first 36 days of illness is ended
  • No excise increase on alcohol – will be subject to VAT increase
  • Cigarettes up 25 cent
  • Increase in Motor Tax from 1 January
  • Household charge of €100 – waiver for those on mortgage interest supplement, certain housing estates, and social housing.
  • Carbon Tax up from €15 per tonne to €20 per tonne. Increase of €0.01 on petrol from midnight, increase on other fuels (non-solid such as peat) from May next year.
  • Rental, investment and other income now liable for PRSI from 2013
  • DIRT is up 27 per cent to 30 per cent
  • VAT rates of 9 per cent for tourism and 13.5 per cent for home heating and other such amenities will remain in place
  • VAT increased from 21 per cent to 23 per cent with a promise of no additional VAT rises in lifetime of this government
  • €1 billion to be raised in indirect tax measures announced today. €600 million will be raised from existing measures
  • No increase in income tax, no increases in rates, no narrowing of bands.
  • Noonan to establish advisory group to advise on NAMA strategy for property disposals
  • Capital Gains Tax and Capital Acquisitions Tax will rise from 25 per cent to 30 per cent at midnight
  • Capital Acquisition Tax threshold falls from €332k to €250k
  • A property relief surcharge of 5 per cent will be imposed on investors with an annual gross income over €100,000
  • From January 1, exemption level on Universal Social Charge will rise from €4,004 to €10,036
  • First time buyers will get mortgage interest relief at 25 per cent in 2012
  • Increase mortgage interest relief to 30 per cent for first time buyers between 2004-08
  • Non-first time buyers will benefit from mortgage interest relief at 15 per cent
  • Capital Gains Tax incentive, property purchased between midnight tonight and 2013, gain will be relieved in full from CGT if kept for seven years.
  • Stamp Duty on commercial property to be cut from 6 per cent to 2 per cent, and will also apply to farmland from midnight tonight
  • Corporate tax exemption for start-up companies being extended by three years to 2014
  • There will be tax breaks for companies who invest in the s0-called BRIC (Brazil, Russia, India and China) countries.
  • Noonan announces foreign earnings deduction to assist exports, and assignee relief programme
  • Corporation tax will remain at 12.5 per cent and the government is committed to maintaining this. “There will be no change in Ireland’s 12.5 per cent in Ireland’s corporate tax rate,” Noonan told the Dáil.
  • Government predicts a 1.3 per cent growth in GDP next year and 2.5 per cent in GNP. Stronger growth expected in 2013.

The pre-budget leaks:

  • There will not be any change in income tax rates
  • The bands of the Universal Social Charge may be raised, in order to alleviate some of the charges on the worst-off
  • PRSI will be widened, meaning people will be liable for PRSI from rental income and other investments
  • There will be a 2 per cent rise in the top rate of VAT – bringing it from 21 per cent to 23 per cent, which is intended to raise €670 million
  • The seven bands of ‘traditional’ motor tax will be increased – RTÉ says the lower band, at €104, will go up to €160; the second band will rise from €156 to €225
  • DIRT will be increased from 27 per cent to 30 per cent (both sources) – the Herald describes this as a ‘tax on savings’
  • Carbon tax will be increased by €5 per tonne, putting around 2.5 cent on a litre of petrol and €15 on a tank of home heating oil
  • Capital gains tax will be increased from 25 per cent to 30 per cent
  • Capital acquisitions tax (the ‘inheritance tax’), currently levied at 25 per cent on all assets over €332,000, will have both its band lowered and its tax rate raised
  • There will be a new €100 household charge, to be paid by the owner (as opposed to the tenant or occupier) of a property; this is an interim charge in advance of a valuation-based property tax, or water charges, and will raise €160 million

Yesterday, Minister Howlin announced a number of cost-saving measures, including a standardising of child benefit payments; an increase in the student registration fee; a cut in the back to school allowance for the parents of children aged between 4 and 11; the closure of 31 garda stations; and jobseekers’ benefit being paid out for a five rather than six day working week.

Additional reporting by Hugh O’Connell and Aoife Barry

Read: In full: Brendan Howlin’s Budget 2012 announcement>

Read: Budget 2012 (pt 1): The main points of Brendan Howlin’s announcement>

Read: Liveblog: Government Ministers explain the cuts in more detail>

In full: TheJournal.ie‘s full coverage of Budget 2012

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90 Comments
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    Mute Lyn NicAodha
    Favourite Lyn NicAodha
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    Aug 27th 2013, 6:33 AM

    Pleased to say that I am almost 4 months free from cigs after 25 years. Took losing my brother in law to lung cancer in early May to give me the final urge to quit…… Will never touch one again!!!

    118
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    Mute tmwtbc
    Favourite tmwtbc
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    Aug 27th 2013, 8:04 AM

    Fair play, that’s a serious effort after 25 years. I’m the only non-smoker in my family but I’ve seen my sister and mother attempt to quit several times. My Dad says the smokes keep him sane!

    22
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    Mute Andrea Rock Massey
    Favourite Andrea Rock Massey
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    Aug 27th 2013, 8:16 AM

    My husband recently quit with the help of Cigg-e. Absolutely brilliant device and would highly recommended tutor anyone looking to quit.

    14
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    Mute Martin Ryan
    Favourite Martin Ryan
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    Aug 27th 2013, 6:19 AM

    I got liquid nicotine electronic device 6 weeks ago,wonderful invention i have no cravings,withdrawals,bad moods, etc can’t imagine that I will ever put another one of those horrible,tax laden filthy fags near my mouth again as long as I live yippee !!!

    93
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    Mute BadDrivingIreland
    Favourite BadDrivingIreland
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    Aug 27th 2013, 6:41 AM

    Which brand I’m getting off these filthy things, trouble is there is so many of these anti smoking devices and what’s safe. But I’m thinking they might tax these at a later stage.

    31
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    Mute Martin Ryan
    Favourite Martin Ryan
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    Aug 27th 2013, 7:22 AM

    @Baddrivingireland, it is called ” eGO-T” and the liquid is called “safevape” can be purchased at nextdoor off licences €50 including two batteries, two filters,and a bottle of liquid which will last you a month if you smoked 20 per day, hope his helps.

    28
    See 6 more replies ▾
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    Mute Andrea Rock Massey
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    Aug 27th 2013, 8:17 AM

    Cigg-e is also brilliant. My husband recently quit with that one and has never slipped..

    14
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    Mute Charlie Murphy
    Favourite Charlie Murphy
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    Aug 27th 2013, 9:05 AM

    We heard you the first time….there are so many of these devices about now and nobody has a clue what they’re inhaling..plenty..hope posters involved in the trade aren’t blatantly marketing on here

    4
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    Mute Andrea Rock Massey
    Favourite Andrea Rock Massey
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    Aug 27th 2013, 9:25 AM

    Nope,not involved in any way! I posted my original comment,further down someone asked for a brand name and I replied. Is that okay with you?

    12
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    Mute richardmccarthy
    Favourite richardmccarthy
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    Aug 27th 2013, 9:36 AM

    Weed free 6 years now, set a date and just stopped at 3pm 27 nov 2007, no pills,no batteries,nothing but fresh air,just like nature intended.

    9
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    Mute @Turflife
    Favourite @Turflife
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    Aug 27th 2013, 11:06 AM

    Which one did you use Martin?

    1
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    Mute @Turflife
    Favourite @Turflife
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    Aug 27th 2013, 11:07 AM

    Must try that! Thanks Martin!

    1
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    Mute Denzil
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    Aug 27th 2013, 6:05 AM

    Filthy habit

    78
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    Mute Adam Power
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    Aug 27th 2013, 6:50 AM

    Regardless of whether it’s working on not it’s keeping non-smokers like me safe.

    69
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    Mute Shaun the Sheep
    Favourite Shaun the Sheep
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    Aug 27th 2013, 7:09 AM

    Still shocked that nearly half of those who are unemployed smoke versus about a quarter of those working. Social welfare payments are too high.

    51
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    Mute Simply The Best
    Favourite Simply The Best
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    Aug 27th 2013, 7:18 AM

    Early & strong contender for irrelevant comment of the day… Well played

    32
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    Mute fergalreid
    Favourite fergalreid
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    Aug 27th 2013, 8:06 AM

    Seriously? The lower the income, the more likely the smoking. That’s a shock to nobody.

    25
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    Mute Darragh
    Favourite Darragh
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    Aug 27th 2013, 7:11 AM

    These electronic cigs work. In my workplace of over 1200 people only a handful still smoke real cigs. Not to government bash but they really should promote these heavily and regulate the quality of the eliquid to ensure they are safe in order to further encourage people to give up.

    35
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    Mute fergalreid
    Favourite fergalreid
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    Aug 27th 2013, 8:05 AM

    As opposed to banning them outright or restricting their sale to chemists. I completely agree. Regulation and sensible taxation would guarantee quality control and offset dwindling cigarette revenue to some extent while also lowering the cost of smoking-related healthcare costs over time.

    9
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    Mute fergalreid
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    Aug 27th 2013, 6:43 AM

    It shows that e-cigarettes are working.

    26
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    Mute Kevin Whyte
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    Aug 27th 2013, 7:45 AM

    If your family, friends or workmates stink of nicotine, tell them the smell is sickening.

    14
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    Mute Mick Wall
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    Aug 27th 2013, 8:24 AM

    Here’s a radical idea. If the government want people to quite smoking give out the electronic starter packs free to every smoker and then remove cigs from the market altogether. It’s often claimed that smokers cost the state more than the revenue received from cigs so there would be a saving overall.

    14
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    Mute Sheila
    Favourite Sheila
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    Aug 27th 2013, 8:38 AM

    I smoked for 14 years, and gave them up many years ago. I was against the pub ban, and thought it wouldn’t work (I was long given up by that time so was not affected), but it turns out most people like a smoke free environment. A heavy smoker friend doesn’t smoke in her proud new car! It is environmental. People I know who go to pubs less do so because of drink driving laws, nothing to do with smoke. Work places need to manage smoke breaks better.

    12
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    Mute Simply The Best
    Favourite Simply The Best
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    Aug 27th 2013, 7:02 AM

    Crack smoking is on the rise though

    11
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    Mute Little Jim
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    Aug 27th 2013, 7:53 AM

    It’s craic smoking round here.

    11
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    Mute Laurence McDonagh
    Favourite Laurence McDonagh
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    Aug 27th 2013, 12:21 PM

    I’m 21. And anyone that starts smokin at my age or younger now is simply stupid. There are no positives to it. Cancer. Hole in the wallet. Generally bad hygiene (eg bad breath) .

    8
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    Mute Patrick J. O'Rourke
    Favourite Patrick J. O'Rourke
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    Aug 27th 2013, 12:20 PM

    I’ve been on E-cigs for nearly a year now. It’s mad to think they are going to remove them from the shop shelves as an option to the lethal real thing and give them to Pharmacies to whack their ridiculous margin on. It won’t effect me or most users as we buy bits online rather than disposables, but the fact I don’t smoke any more was down the option on the shelf one day last year. My chest x-rays show the biggest benefit. If governments want to regulate or ban something they should do it to the poisonous stuff and save a lot of lives. I smell a lobby from the vested interests of the other nicotine replacement product companies at work in Europe. Anyway, you can’t uninvent the wheel. You could buy a lifetime’s supply of nicotine in a small bottle now. Nicotine itself is no more dangerous as a substance than caffeine. Smoking gets you 230+ dangerous toxins. If I wanted to I can make a vaping device from a phone battery, wire, cotton wool with nicotine refined from other wild plant leaves. They can’t regulate that but it would be getting back into poitin territory ironically. Good fun though as long as the local A&E isn’t closed.
    In our lifetimes aspartame will probably prove to be the biggest killer.

    3
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