Extending tax band ‘would not help low earners’

A ORGANISATION campaigning for a fairer society yesterday warned that widening the tax band for low income earners in the next Budget would achieve nothing.

The CORI Justice Commission said widening the 20% tax band would be of no benefit to anyone earning less than €28,000 a year, despite other interest groups lobbying the Government to take this option.

“Instead the Government should use the money available for tax reduction by giving low income earners more tax credits,” CORI Justice Commission director Fr Sean Healy said.

Fr Healy said CORI had carried out an analysis of the impact €700 million in tax concessions would have in the next Budget.

The conclusions reached were that the money could be spent on either:

Increasing the 20% tax band by €5,500, or

Increasing tax credits by €512 a year

Fr Healy said extending the 20% tax band by €5,500 to include people earning up to €33,500 would be of no benefit to anyone with an income at or below the top of the current band of €28,000. However, if the Government increased tax credits by €512 for low income earners they would be guaranteed this amount of money into their pockets, according to CORI. The second was the fairer option, Fr Healy said.

A Finance Department spokesperson said yesterday that no final decision would be made until the Budget was delivered in December.