THE CABINET is expected to give the go-ahead today for a new temporary “household charge” of €100 per year.
Proposals for the new tax will be presented by Minister for the Environment Phil Hogan, with a decision expected today.
The charge will be levied on the estimated 1.8 million householders in the State, potentially raising €160 million in revenue in 2012. It is understood that a comparatively small cohort, between 100,000 and 200,000 low-income households, will be exempt from the tax.
Mr Hogan is also expected to present plans to ministerial colleagues on a proposed water metering scheme to be introduced later in 2012 or early in 2013.
The proposals form part of a busy agenda for the final Cabinet meeting before the summer break.
The Cabinet is also expected to discuss proposals from Minister for Enterprise and Jobs Richard Bruton to reform wage-setting mechanisms, which may involve reductions in pay and conditions for workers in catering, hospitality, cleaning and security.
Mr Bruton said he would bring a memorandum to Government to respond to a High Court decision earlier this month which ruled that the joint labour committee wage-setting mechanism was unconstitutional.
He has promised to provide temporary protection to the estimated 180,000 workers covered by the agreements, some of which date back to the 1940s.
It was not clear yesterday whether the Minister will bring his comprehensive proposals for reform to today’s meeting and whether a final decision will be made.
The household charge is the first step in two new taxes that will be introduced over the next two years as part of the agreement between the Government and the International Monetary Fund and European Union.
The household charge is an interim measure that is being introduced ahead of a property tax. The Government will not be in a position to introduce the full property levy until site valuations on all the households in the State have been carried out.
The State will begin charging for water once meters have been installed in every home. Mr Hogan has said he intends to set up a new State-owned water utility, Irish Water, in the autumn but it is unlikely that metering will be completed before the end of 2012.
The previous government had signalled it would introduce a flat household charge of €200. After the change of government, Mr Hogan considered a number of options including a €200 charge. The higher charge would have allowed the Government to offer exemptions to a greater number of households, including many on social welfare.
Speaking in the Dáil last week, Taoiseach Enda Kenny said the outcome of today’s meeting would give clarity on the nature and extent of charges the Government will introduce.
The flat-rate charge will be introduced for 2012 and will apply to those who own the property. The levy will provide a new revenue stream for local government, the first such tax on households to be levied since domestic rates were scrapped in 1977.
