'There will not be any increase in income tax'

Taoiseach Enda Kenny has said that there will be no hike in income tax in the next Budget.

Repeating his past commitment, the Taoiseach refused to confirm whether calls from a senior Government minister to cut the tax would be considered, saying Cabinet had not yet discussed the budget.

“Let me say that it is part of our Programme for Government that there will not be any increase in income tax,” Mr Kenny said.

“We believe this is fundamental in the context of the creation of jobs and not to put obstacles in the way of jobs being created.”

Finance Minister Michael Noonan said today that officials had begun sending the first document outlining the parameters of the budget to different Government departments.

He joined Jobs Minister Richard Bruton in insisting there should be no increase in income tax, but unlike his Cabinet colleague, he stopped short of calling for the rates to be reduced.

The Government will announce spending cuts and tax adjustments to the tune of €3.1bn for the 2014 budget on October 15.

The joint memo on the strategy and principles of the budget from Mr Noonan and Public Expenditure Minister Brendan Howlin marks the start of four months of discussions among Government departments.

“Matters for the budget will be discussed by Cabinet in due course,” Mr Kenny added.

“We have the principles and strategies set out and assessed by the Government on the production of the memo by the two ministers.”

However, he said he does not expect any details will be entered into at this stage.

Mr Kenny was speaking following talks in Government Buildings with Japanese Prime Minister Shinzo Abe, who visited Dublin following the G8 Summit in Co Fermanagh.

He said the Government had committed in its Programme for Government not to increase income tax rates and to boost job creation.

Earlier, Mr Bruton said easing the tax burden was necessary for economic recovery.

The jobs minister warned that relatively high income tax on average earners does damage to inward investment and causes people to question whether they would be better off out of work and on benefits.

The Government announced tax hikes and spending cuts of €3.5bn last December for budget 2013.

It is expected to make further savings of €2bn for 2015.