HOMEOWNERS have been hit by a new bin tax double-whammy as Finance Minister Brian Lenihan moved to squeeze more money out of the contentious charge.
Relief on the payment is being withdrawn as the service was made liable to VAT in a bid to suck an extra €20 million into the Exchequer each year.
VAT will also be imposed on parking and toll fees after a landmark European Court of Justice ruling set to hit the Irish motorist hard, and will also impact on council-run leisure and landfill facilities.
Labour finance spokesperson Joan Burton said the moves, outlined in the Finance Bill, which brings budget measures into law, made a mockery of the Government’s claim that it wanted to increase the tax burden on the well off.
“This will mean extra hardship for many families and households as the Minister proposes to charge VAT on a range of local authority services.
“Depending on the VAT rate charged for equivalent private services, these local authority services will now attract a VAT rate of 13.5% or 21%.
“The minister has sidestepped many of the reforms proposed by the Commission on Taxation in terms of restricting tax avoidance measures used by the super-rich to minimise their tax bills. For instance, he did nothing to curtail tax relief on investments in private hospitals or mega pension pots,” she said.
The Bill also imposes a €200,000 levy on tax exiles which is expected to hit some 6,000 people with assets of more than €5m in the country.
A €400m tax loophole was also closed-off after it was discovered companies were exploiting Ireland’s capital gains tax regime by using their own subsidiaries to hide profits.
The Bill will also implement a carbon tax on fossil fuels at the rate of €15 per tonne which is set to send kerosene prices up by 8% and those for natural gas by 6%. The tax, levied on petrol and car diesel from December 9, will come into effect on May 1 on kerosene, marked gas oil, liquid petroleum gas (LPG), fuel oil and natural gas.
The bin tax hike will affect about half the country from July, as private companies are already liable for VAT in the areas where they operate, while the tax relief element will be abolished in 2012.
The Bill boosted Ireland’s attractiveness for Islamic investors by enforcing the principles of Sharia law and extending the tax treatment applicable to conventional finance transactions to it.
The cut-off point for the top rate of mortgage interest relief was extended by six months into 2011. The mortgage interest relief will be abolished entirely in 2018.
The levy on life assurance premiums introduced last year is also being removed from pension products in order not to discourage investment in pensions.
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