Tax measures that may boost economic activity are welcome

THIS year’s budget has introduced a number of interesting measures to increase activity in the property, SME and farming sectors, while taking a policy decision not to increase income tax rates.

It remains to be seen whether the benefit of these measures will outweigh the negative impact of the increase of the VAT rate.

The Government’s solution for increasing tax revenue in this year’s budget was very straightforward, with a 2% increase in the VAT rate from 21% to 23% expected to generate additional tax revenue of €560 million while the €100 household charge is expected to generate tax revenue of €160m.