FG claims tax burden has risen over last four years

Fine Gael has claimed that the overall tax burden has increased significantly in the last four years.

Fine Gael has claimed that the overall tax burden has increased significantly in the last four years.

The party's finance spokesman, Richard Bruton, said yesterday the Government's claims to be a low-tax administration were "false", and the proportion of household income going on tax has risen from 31.6 per cent in 2002 to 38.4 per cent this year.

According to a document prepared by Mr Bruton, the overall tax burden in the economy had risen from 34 per cent to 37 per cent of GNP in the same period.

Theses figures include taxes not covered in the budget such as commercial rates, development levies, health levies and social insurance, which had increased by €3.6 billion or 51 per cent between 2002 and 2006.

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Mr Bruton said huge jumps in the amount of indirect or "stealth" taxes such as VAT and stamp duty had been the primary causes of the increase in the amount of tax being paid by Irish householders and employers.

The amount of revenue from stamp duty had more than trebled, while capital gains tax had risen by a factor of four.

"What these numbers tell us is that the current administration has grown increasingly dependent on consumer taxes, stealth taxes and property taxes."

Mr Bruton said the rise in stamp duty had been caused by the failure of stamp-duty threshold limits to keep pace with house-price inflation.

He said in 2002 a person buying an average-priced house in Dublin faced a €9,000 stamp duty bill, which had risen to €41,000 this year.

The Fine Gael paper, based on figures from the Department of Finance, local authorities, the Central Bank and the Central Statistics Office, said a 51 per cent increase in the amount of VAT collected by the Government had been driven not only by increased consumer spending but by two separate VAT rate rises.

"This stealthy tax increase impacts on all in society, and disproportionately impacts on those on lower incomes where expenditure on basic foodstuffs accounts for a greater proportion of disposable income," Mr Bruton said.

"Ahead of the publication of the Estimates, the claims by the current Government to be a low-tax regime should be scrutinised because their own figures do not support their contention."

Tax paid: by households as percentage of personal income*

2002 ... 2006

Income tax 11.0% ... 11.7%

Social Insurance 1.5 % ... 1.9%

Health levy 0.9% ... 1.2 %

VAT 10.8% ... 13.2%

Customs and Excise 5.2% ... 5.2 %

Motor Tax 0.6 % ... 0.7 %

Capital Taxes 1.6% ... 4.6 %

TOTAL 31.6% ... 38.4 %

... * Fine Gael figures