Department of Finance claims tax cut will cost State €2.3bn per year

Department of Finance claims tax cut will cost State €2.3bn per year

The government's tax cut plans would cost would cost €2.3bn a year when they're fully introduced, the Department of Finance says.

A single worker pays the higher rate of income tax of 40% on any income they have beyond €35,300 a year.

Taoiseach Leo Varadkar told delegates at the last Fine Gael Ard Fheis he wants to raise this threshold.

Under the plan, a single worker would pay tax at the 20% rate on income of up to €50,000 - and €100,000 .

Finance Minster Paschal Donohoe says the change would have to happen gradually over the next five budgets -- and the economy has to keep growing for that time.

He says the current thresholds for the higher rate of tax are too low:

"You begin to pay the higher rate of income tax on approximately €35,000 if you're a single income earner and just over €70,000 if you're a family.

"I do not believe that that is a high rate of income in Ireland, it is very much the average wage in our economy," the Minister added.

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