Setback to hopes for tax breaks

THE cost of increasing tax bands in December’s Budget to keep ahead ofinflation has been put in the region of €300 million, according to Department of Finance estimates.

But hopes for a cut in personal tax rates took a dent when the department said a 1% reduction in the standard and higher rates would cost over €600m in a full year.

Figures prepared by the department show the Exchequer would take a €190m hit if personal tax credits went up by €100, or 6%, in this year’s Budget. Tax credits were bumped up by €60, or 4%, last year.