Taoiseach Enda Kenny has promised to reduce the top rate of income tax to under 50 per cent if the Government is returned to office after the next election.
Mr Kenny said the relatively high rate of personal taxation in the Republic was something that had to be addressed if the State was to remain internationally competitive.
His pledge to provide further relief to middle-income earners is one of the clearest indications yet that the Government is now firmly in pre-election mode.
As a result of the measures in Budget 2015, the marginal rate of tax, which includes PRSI and the Universal Social Charge, will be cut from 52 to 51 per cent from next year.
Speaking at a special Thanksgiving event in Dublin hosted by the American Chamber of Commerce, Mr Kenny said that Budget 2015 was the first year of a multi-year programme “to reduce job-damaging taxes on work”.
He said the top tax rate would be dropped to a maximum of 50 per cent in next October’s budget.
“And we will reduce the rate of income tax further in subsequent budgets if the people decide to re-elect this Government.”
The Taoiseach said the tax-reducing measures in the budget were specifically targeted at low- and middle-income workers “who pay high taxes at very modest income levels”.
“We understand that the high rate of personal taxation in Ireland is something that has to be addressed, and is being addressed, if we are to remain internationally competitive for highly skilled mobile investors and jobs.”
Mr Kenny added that he said “before the budget that the 52 per cent tax rate is anti-employment, anti-enterprise and anti-investment.”
He did not state how the tax reductions would be funded but noted that Ireland was now expected to come in as the fastest-growing economy in Europe this year.
He said the economic turnaround had helped “transform Ireland’s international image, our reputation, with market confidence well and truly restored.”
As a sign of the State’s renewed economic health, Mr Kenny said the State was able to raise €3.75 billion in a new 15-year benchmark bonds at a record low yield of 2.5 per cent earlier this month.
All these indicators were proof that the State’s economic recovery has gone “beyond just aspiration and hope,” he said.
