Civil Servants Present Tax Options To Donohoe

/ 17th September 2021 /

The government’s Tax Strategy Group has published a series of papers ahead of Budget 2022, setting out various options for changes in tax policy.

Higher stamp duty and increased carbon taxes are among the measures mooted for finance minister Paschal Donohoe (pictured) to consider.

Stamp duty could be charged at a higher rate to overseas buyers, says the Civil Service think tank, not with the aim of raising revenue but to free homes for domestic buyers and reduce the number of people buying holiday homes in Ireland.

TSG also suggests applying the higher tax rate on the full value of homes sold for over €1m. This would raise cash for government and also create a strong incentive for the buyer not to pay over the cut-off level — with potentially positive effects in calming house price inflation.

Vehicle Registration Tax could be increased for all but the greenest of vehicles, according to one paper, adding about €1,000 to the price of an average car.

The group says Ireland could more than double the weekly earnings threshold for workers to pay social insurance contributions. The weekly earnings threshold — the minimum someone must earn before accessing benefits under the social insurance system — might rise from €38 per week to €96.15 per week, or €5,000 per year, TSG suggests.

In other papers, TSG considers home or remote working incentives, the ‘Help to Buy’ housing scheme — now costing more than four times the original cost estimate — capital and savings taxes, VAT, excise taxes, and Brexit readiness, as well as changes to the social protection package.

The headline suggestion for the latter is a €5 per week increase in rates, with or without proportionate increases for ‘qualified adults’, and in the state pension, none of which have seen increases since 2019.

There’s also a paper on international and EU tax developments, and the whole package is available here.

The full list of papers is: