THE GOVERNMENT has not taken any decision as to when it will abolish the employee ceiling for Pay-Related Social Insurance (PRSI) contributions and introduce a single 30 per cent rate for tax relief on private pension provision.
Both of these proposals are contained in the renewed Programme for Government agreed between Fianna Fáil and the Green Party last weekend. Further proposals for a site valuation tax on residential property and water charges are expected to take a number of years to implement.
A spokesman for the Green Party said: “We have agreed political commitments with our Government partners. We will now continue budgetary discussions to provide the means to deliver on these commitments.”
A Department of Finance spokesman said: “All tax changes are considered as part of the budgetary process.”
The spokesman pointed out that: “The removal of the PRSI ceiling is not a new tax. It is a change to an existing tax to redistribute the burden of taxation.”
He also pointed out that: “The renewed Programme for Government states that the Government will ‘abolish the employee PRSI ceiling in parallel with the reduction of the temporary income levy in order to remove the inequity whereby higher-paid employees pay proportionately less of their income for social insurance than low-paid employees’.”
Since the changes in PRSI rules and the rate of tax relief on pension provision are not new taxes, simply changes in existing rules, they could be implemented by the Minister for Finance overnight.
However, Government sources insisted no decision had been made as to whether they would be part of the forthcoming budget on December 9th.
Fine Gael finance spokesman Richard Bruton said: “At a time when the Government is telling us that the strategy has to be to find €4 billion in expenditure cuts and avoid any increases in tax, you have a programme for government that proposes new tax increases and extra spending.”
However, the Department of Finance spokesman said: “The Minister stated in an interview with Matt Cooper on 17th September last that in the next budget there would, ‘be no new taxes except a carbon tax’, which was agreed as part of the initial programme for government.
“The Minister left open the option of possible changes to redistribute taxes so as to make them fairer and more efficient.”
Fine Gael environment spokesman Phil Hogan claimed the renewed programme contained “a litany of hidden charges for the public”.
“The Fianna Fáil and Green Ministers have attempted to paint the failed document as revolutionary yet, if that is the case, why have the entire contingent of Fianna Fáil backbenchers been struck mute?
“The Programme for Government represents an increase in the power of the dead hand of the State with increased public expenditure, higher taxes and a host of new charges that will be imposed on householders in the years ahead.”
