Three-Quarters Of Irish Executives Expect Tax Take To Rise

by Jason Goringe, Tax-News.com, London

04 December 2002

A recent survey of Irish business executives conducted by Deloitte & Touche has revealed that nearly three-quarters of those polled expect indirect taxes to increase in today's budget.

Speaking on Monday, national tax partner, Pat Cullen suggested that it is unlikely that the standard rate of VAT will be increased, explaining that: 'a more likely scenario is that the Minister for Finance will increase duty on fuel, tobacco and drink. If this happens, it will have a knock-on effect for all businesses, with increases in fuel duties impacting on input costs and inflation in particular.'

According to Deloitte & Touche, some 37% of those questioned expect increased capital gains tax rates to be introduced, while 23% of business managers anticipate that the tax take from personal income taxes will rise next year:

'We would expect the overall take from personal taxes to increase in 2003,' Mr Cullen explained, adding: 'This is likely to arise through lower-than-inflation increases in tax credits, maintaining the current tax bands, and curtailing current tax incentives. It is unlikely the tax rates will change.'

However, just 9% of the 272 Irish business managers polled thought that business taxes would increase, despite increasing speculation in the run-up to Charlie McCreevy's budget that he intends to slow down the transition from the 16% rate of tax on trading income to the 12.5% rate.

'This is highly unlikely to occur because of commitments given to international businesses,' Mr Cullen explained on Monday, concluding that: 'Many will have located here because of the 10 per cent corporation tax rate in the past and the commitment to the 12.5 per cent rate has resulted in them staying. Any change in this could damage our reputation among business communities abroad.'

Recommended