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Government Looking At Tax Changes To Help With Cost Of Living

The Government is considering bringing in a lower-middle-income tax bracket, to offset the rising co...
Ben Finnegan
Ben Finnegan

2:18 PM - 24 Mar 2022



Government Looking At Tax Chan...

News

Government Looking At Tax Changes To Help With Cost Of Living

Ben Finnegan
Ben Finnegan

2:18 PM - 24 Mar 2022



The Government is considering bringing in a lower-middle-income tax bracket, to offset the rising cost of living.

While the move has been welcomed by many, the St Vincent de Paul has called on ministers to do more for those living below the poverty line.

If introduced, this change in policy would see people on a salary of more than €36,800 taxed at 30%, instead of the current rate of 40%.

Chief Economist with KBC Austin Hughes says the current jump in bands puts people off seeking a pay rise:

"People go from having 20% of their income to 40% of their income to the taxman.

"They tend to think twice about whether it's worthwhile to do extra work."

But the head of Economics at the University of Limerick Stephen Kinsella says the measure only helps half the working population:

"There are about 2.3 million people working in the country, and only about 1 million people pay income tax.

"So changing an income tax band doesn't really help if you work a couple of hours in a supermarket."

The St Vincent de Paul wants to see the government prioritising lower-income workers who they say are most affected by the rising cost of living.

Head of Policy Tricia Keilithy says numbers seeking help are growing:

"We are having contact from people who've never had to rely on SVP before, or maybe had to rely on SVP in the last financial crash and now are requiring our help again."

As well as the tax changes, the Tánaiste Leo Varadkar also signaled towards pay increases and higher social welfare payments in the next budget - to help with rising inflation.



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Cost Of Living Economy Income Inflation Pay Rise Salary Tax

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