Budget day has arrived – and with all the leaks most of the Budget seems to be already known. Here is a round up of the latest predictions of what is going to be announced . These are based on “leaks” as well as older information that has been known for months. We will keep you updated about the Budget announcements as they happen today.
The 2013 Budget – will be announced later today and it will be aiming to get back at least €3.5 billion in a combination of cuts to spending and in increased taxation.
About €1.25 Billion in extra taxes and charges are expected in 2013 – we are expecting increases to the following :-
Carbon tax – which will affect gas, petrol diesel .
Excise duty on tobacco and possibly on alcohol too.
VRT – which will increase the cost of new cars. A 15 per cent rise is expected on average.
Motor tax – further restrucuring is expected (that means increases!). An average figure of 15% has been mentioned.
PRSI– may be extended to apply Employee PRSI to rental, interest and dividend income of PAYE workers . The PRSI exemption may be lowered or abolished – which will mean people earning ubder €18k will start paying PRSI.
USC – increase for over 70’s – from 4% to 7% with income over €60,000.
Property Tax – full details of the new residential property tax will be released on Budget Day – but we already know some of the details . The average property tax could be in the region of €350 . More about the Property Tax Here. The latest rumour is a higher rate of property tax on homes valued at over €1 million.
Tax relief on pension contributions might be cut . The 40% rate may be cut to at least 30% or even 20%. Another option suggested is to cap at €60,000 the amount of annual tax relief available for pension contributions.
Other possible tax changes include increases to DIRT , Capital Gains Tax and a new “Fat Tax” on fatty/sugary foodstuff. Increased taxes on betting.
Spending reductions of about €2.25 Billion are expected mainly in the areas of welfare entitlement reforms and some capital projects .
Child Benefit cuts of some form are expected – a €10 a month cut has been mentioned – probably with balancing increases on means tested benefits so that poorer families are not affected. The option of taxing it is not possible beacause the computer systems currently can’t cope.
VAT is reported to be dropped on construction related items from 13.5% to 9%
Private schools may see their financial support cut.
Medical card holders could see the 50 cent prescription charge rising to €1
Hospital A&E charge of €100 could be going up again.
The income level in the means test for the over-70s medical card could be reduced – which will mean some of them losing their card. It is being reported that the income limit will drop from €36,000 to €30,00 for a single person and from €72,000 to €60,000 for a couple .
Changes to eligibility rules for the Jobseekers Benefit – with the time period being cut from 12 months to 9 months . After that it will be means tested .
There was a mention of the free telephone allowance for pensioners being halved .
There is always the possibility of cuts to public sector wages , public sector pensions .
Privatisation of state assests is also on the cards – with the receipts being used to reduce debt. ESB have already been told to prepare to sell of €400 million of assests. More sell offs may be announced in the Budget.