Minister for Finance reiterates Government’s pledge to cut Income Tax

Minister for Finance Paschal Donohoe has reiterated the Government's pledge to cut income tax over the next five years.

In a speech given to the Fine Gael Ard Fheis last November, Taoiseach Leo Varadkar said the level at which people hit the higher rate of income tax will rise to €50,000 over the next five years if Fine Gael is in power.

Speaking in the Dáil this morning, Mr Donohoe said if the economy continues to grow and the resources are available, it is possible to reduce the standard rate cut off point every year.

The Minister said any cuts in the upcoming Budget depended on negotiations with Fianna Fáil.

He was responding to Sinn Féin's finance spokesperson Pearse Doherty, who said if the Government went ahead with this plan then resources would have to be taken from other areas.

Mr Doherty said it would mean that €2.5bn of tax would be foregone to the State at a time that there are huge pressures in public services, health, housing and the cost of childcare and insurance.

He said the money was not there to provide for services that we need at the moment.

Fianna Fáil's finance spokesperson Michael McGrath asked the minister about the Irish Fiscal Advisory Council report, which highlighted the volatile nature of corporation tax receipts.

He said there had been a massive increase in the number of receipts in recent years and he said there is now significant risk posed to the public finances and the wider economy from that dependence on corporation tax.

Mr McGrath asked the minister about his plans to manage that risk to the public finances and the wider economy.

Responding, Mr Donohoe said a shock to the corporate tax base cannot be ignored particularly in light of change and uncertainty internationally.

He said it was imperative to ensure that increases in public expenditure are sustainable.

The minister told the Dáil, the rainy day fund had been set up and efforts had been made to broaden the tax base.

Mr Donohoe said the Government was aiming to deliver a surplus of 0.2% of national income this year.

He said a process was being put in place in order to get a better "view" of the sustainability of corporation tax receipts.