AMENDMENTS:A PROPOSED 90 per cent bank bonus surcharge is unlikely to be introduced in the Finance Bill due to time constraints.
However, the maximum universal social charge rate for medical card holders will be capped at 4 per cent, while film relief will be extended to 2015, if the Government’s amendments to the Finance Bill are adopted.
As the debate on the Bill started in the Dáil, Minister for Finance Brian Lenihan said yesterday there were “immense legal difficulties associated with” introducing a surcharge on bank bonuses as part of the Finance Bill, which the Government is attempting to rush through this week. “It may be difficult to do it in the very limited timescale available,” he said.
The Government agreed “eight or nine” amendments at a Cabinet meeting yesterday, he confirmed. However at the time of going to print, the full details of these amendments had not yet been published. A Department of Finance spokesman could not confirm whether the bank bonus supertax has been shelved.
In December, Mr Lenihan pledged to introduce a 90 per cent tax rate on any future bonuses paid by a bank covered by the State guarantee, following the furore over AIB’s intentions to pay bonuses to its staff. However, this measure was absent from the Finance Bill when it was published last Friday.
Fine Gael deputy finance spokesman Damien English condemned what he described as Mr Lenihan’s “climbdown” on the bank bonus tax. He said it was deeply regrettable that the Minister would not stand over this commitment, adding that Fine Gael will examine the possibility of tabling an amendment to address this matter. In an attempt to make the new universal social charge system more equitable, the Government has proposed that the maximum rate that will apply to medical card holders should be reduced from 7 per cent to 4 per cent.
Previously, recipients of medical cards were exempt from the income and health levies, which have been replaced this year by the universal charge .
In his Finance Bill second stage debate yesterday, Mr Lenihan said the Government wanted to “ameliorate” the position of medical card holders who were adversely affected by the change, while maintaining the principle that everyone must make a contribution. It is understood the Government received a considerable amount of submissions on this issue.
To counterbalance this change, which will cost about €80 million, the rate paid by self-employed taxpayers on income over €100,000 will be increased from 7 per cent to 10 per cent. This will ensure that the contributions of self-employed individuals will be of the “same order of magnitude” as employees, he said, and will leave their top marginal tax rate unchanged from last year.
The adjustments to the universal social charge regime will be transitional, lasting for the lifetime of the National Recovery Plan.
Mr Lenihan also said the film relief scheme is to be extended until 2015 “because it has generated a lot of employment”.