Varadkar says taxation body's recommendations 'straight out of Sinn Féin manifesto'

Leo Varadkar said: 'I can categorically say that there are no plans to increase employers' PRSI in the forthcoming budget'. Picture: David Keane

The Tánaiste has criticised recommendations from the independent expert body on taxation, claiming they are "straight out of the Sinn Féin manifesto".

Responding to the Commission on Taxation and Welfare report, Leo Varadkar said "there is no way" that a number of the recommendations, including a hike in inheritance tax, will be introduced by the current Government.

"There are things that quite frankly, are straight out of the Sinn Féin manifesto," he said. 

"Increasing inheritance tax, for example, increasing taxes on people's savings. There's no way that's going to happen while Fine Gael is in Government.

"I can categorically say that there are no plans to increase employers' PRSI inthe forthcoming budget."

He added: "So you have a mixed bag of things that I agree with, [and] things that simply won't happen, certainly not under this Government.”

A spokesperson for the Tánaiste was later forced to clarify that Mr Varadkar does not believe the commission was infiltrated by Sinn Féin.

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The commission report has made 116 recommendations, including a second child benefit payment for lower-income families. This payment, which would be on top of the current universal payment, would help address child poverty.

A congestion charge and a tax on unhealthy processed foods have also been put forward.

The independent commission, chaired by Professor Niamh Moloney, also found that taxes on wealth and property are low and should be increased to broaden the tax base. This should include a significant increase in inheritance tax.

Prof Moloney said the report was delivering a "very, very difficult message" especially at a time when people are struggling with the cost of living but added: "The commission believes it will be necessary to increase the contribution of taxation as a share of national income in the future, and accordingly we have adopted a net revenue-raising approach in framing our recommendations."

Finance Minister Paschal Donohoe categorically ruled out the recommendation to lower the threshold above which people pay inheritance tax on families homes.

Paschal Donohoe indicated that a recommendation that special Vat rates across hospitality and other areas be increased could be adopted as early as this budget. Picture: Niall Carson/PA Wire

However, he did indicate that a recommendation that special Vat rates across hospitality and other areas be increased could be adopted as early as this budget.

The commission found the 9% Vat rate should be increased to the normal 13.5%. However, it also adds that the 13.5% should also be hiked as there is a relatively large share of goods and services attracting zero and reduced rates of Vat.

Mr Donohoe said he would "carefully consider" the commission's recommendation on the future of Vat; study its views on the reduced rate for the hospitality sector; and take it into account in the budget in two weeks time.