There could be bad news ahead for the Irish taxpayer as reports have revealed this morning that the Government has been advised by the Department of Finance to increase property tax by 600% if they plan to scrap the Universal Social Charge.
The news comes after the Department of Finance put together a number of proposals that would see tax raised on properties or petrol, diesel and alcohol in order to cover the shortfall if the USC was to be abolished.
In the detailed report the Government are being advised not remove of the levy, with the department claiming it will narrow the tax base and would be a regressive move.
It is understood that a briefing note was prepared in February, which outlines four different options to replace the revenue lost by the immediate abolishment of the charge.
The first option would see an increase on the local property tax sixfold, with an increase on commercial property stamp duty by 1.75%, increase stamp duty to 3%, raise capital gains tax to 38% and increase capital acquisitions tax from 33% to 43%.
The report also includes a number of other options including an increase on the price of petrol and diesel by 18% per litre, whilst an increase on excise duty on a pint of beer by €1.50, along with an increase on excise duty on spirits by €1 per half-glass, the government could also reintroduce the 13.5% VAT rate for the tourism sector, and increase all other forms of VAT including raising the 23% rate to 25% and increasing the VAT rate on children’s shoes to 5%.
Meanwhile a third option is also on the table that would see the Government increase the 20% income tax rate to 25% along with the 40% income tax rate to 45%.
The fourth and final option would see the Government change Ireland’s corporation tax rate from 12.5% to 19.75%.
Source: Irish Times