Finance Minister Paschal Donohoe has confirmed he is no longer seeking to abolish the Universal Social Charge (USC), as Fine Gael had vowed to do in the 2016 general election.
Mr Donohoe has said it is his intention to merge the USC with PRSI, as promised by Taoiseach Leo Varadkar.
Mr Donohoe said: “We have a new Minister for Finance and a new Taoiseach. We are entitled to make our assessments of the landing points for important policy areas such as this.”
Under questioning from Pearse Doherty of Sinn Féin, Mr Donohoe said the current system of personal taxation, with three separate charges through income tax, USC and PRSI, is overly complex.
“My long-term view of the USC is to see its integration into the existing PRSI code,” he said. “My focus on reducing the income tax burden for those on low and middle incomes should be the guiding principle.”
Mr Doherty attacked Fine Gael’s previous position of wanting to abolish the USC, which would have cost €4bn of our tax base a year. Mr Donohoe said: “I am very clear on what the long-term endpoint will be for the USC. We believe the landing point is where we integrate the PRSI code into the USC code.”
He said it will be handled in a way consistent with the Programme for Government and consistent with the supply and confidence agreement with Fianna Fáil.
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