€2,800 tax break for householders urged by FG

THE Exchequer’s extra €1 billion tax bonanza must be used to give householders a €2,800 tax break next year, Fine Gael said yesterday.

And the extra money should also be used to give first-time buyers a real tax break by eliminating the stamp duty they have to pay on second-hand homes, said Fine Gael enterprise, trade and employment spokesman Phil Hogan.

Every household will pay an extra €2,800 in tax this year because of the Government’s failure to index link tax credits and tax bands to inflation in the last Budget, said Mr Hogan.

“But householders have not got a bang for their buck because there is little or no evidence of any improvement in public services,” he added.

The latest Exchequer returns for the year to July show income tax has increased by 24% to €5.6 billion and stamp duty is up to €1 billion.

The economy appears to have recovered from the Government’s reckless spending spree before the last general election when it raided State coffers in a bid to buy the election, said Mr Hogan.

But the latest healthy tax-take cannot be used by the Government to build up a war chest for the next general election. “The Government must ensure that the money is used to give a better delivery of public services,” he added.

And the Government must also give workers significant financial compensation in the next Budget for its failure to index tax bands and for imposing 27 stealth taxes at the last general election, he said.

The failure to index tax bands has landed each household with an extra €1,600 tax bill so far this year and this will escalate to €2,800 by the end of the year.

And non-indexation of tax bands and stealth taxes have pushed the total take up to €2.15bn.

But a Department of Finance spokesman said no decision can be made on Fine Gael’s demand until the December Budget.

“The Budget Strategy Group set up by the minister will consider it when framing the 2005 Budget,” the department spokesman added.