90,000 earners taken out of tax net, tax breaks reviewed

Minister for Finance Brian Cowen has moved to take more than 90,000 earners out of the tax net by increasing the standard rate band by €2,600.

As he distributed the €2.5bn exchequer surplus in today's Budget, Mr Cowen also increased paid maternity leave by eight weeks to 26 weeks by 2007 and doubled unpaid leave to 16 weeks.

He increased tax credits for the widowed, visually impaired and dependant relatives.

The minister also capped tax incentive schemes to those on incomes over €250,000 per year.

He said: “This measure will help eliminate the phenomenon of tax-free millionaires.” This cap will also apply to the artists’ exemption scheme.

The tax free status of the bloodstock industry will also end in mid 2008, he said.

Mr Cowen also increased excise relief on the biofuel industry to encourage alternative energy sources. He also proposed to close off loopholes relating to capital gains tax.