The Government is set to double the gambling tax as part of next Tuesday’s budget, according to Government sources.
The proposal will raise an estimated €50m per year, and some of that money will be directed into addiction services to treat gambling addicts.
Finance Minister Paschal Donohoe is set to include the measure as part of his €3.4bn giveaway budget — the gambling tax will represent a significant victory for the Independent Alliance.
As part of its budget negotiations, the alliance last month called for the gambling tax to be doubled and for a property tax waiver to be introduced for elderly people on fixed incomes.
The alliance — comprising Shane Ross, Finian McGrath, Kevin Boxer Moran, and John Halligan — argued for the gambling tax to rise from 1% to 2%, which would generate €50m.
The doubling of the gambling tax is the only tangible win for the alliance in its talks with Mr Donohoe.
Its proposal for a so-called granny grant to those grandparents or other relations who mind children in the home was rejected by Mr Donohoe and Fine Gael as “unworkable”.
Divisions have emerged between the alliance and Mr Donohoe over the proposed increase in the 9% Vat rate for the hospitality sector.
The alliance is deeply opposed to Mr Donohoe’s plan to introduce a two percentage point increase to the lower Vat rate, saying it will unfairly punish small hotels, guesthouses, and restaurants.
The alliance had sought for a levy to be introduced on bigger hotels in Dublin and Cork, but Mr Donohoe said it is not possible to isolate them.
He also needs to raise €526m from the Vat increase and hitting the larger hotels would only raise about €150m, Government sources have said.
It has also emerged that the expected overrun at the Department of Health will not be €1bn as suggested by some media reports.
Senior Government sources said the expected overrun will be closer to €600m — the projected end-of-year bailout will be for that amount.
It is likely Health will receive an additional €200m for 2019 to pay for new measures including the provision of abortion services and expanding mental health services, as demanded by Fianna Fail.
In relation to the Local Property Tax, divisions have emerged within Government over demands by Transport Minister Shane Ross to introduce exemptions for the elderly.
“What about the disabled, the poor, and the sick? If we start exempting, there will be nobody left paying it except the poor buggers in the middle,” said one minister.