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'DIRT' tax on savings interest to rise to 41 per cent

The measure means those saving money will have to hand €41 back to the state for every €100 in interest they accrue.

Image: tax via Shutterstock

FINANCE MINISTER MICHAEL Noonan has confirmed an increase in the rate of annual DIRT tax applied to savings interest, from 33 per cent to 41 per cent.

It means those saving money will have to hand €41 back to the state for every €100 in interest they accrue.

Aimed at convincing people to spend money rather than sit on large sums, the move has been criticised by accountants Grant Thornton — which says is may encourage people to try and evade the payment:

“The DIRT tax on savings has now gone from 20 per cent to 41 per cent in a short period of time,” partner with the firm Peter Vale said.

“Whilst the move may encourage people to stop hoarding cash and invest in more productive assets, it also increases the likelihood of greater non compliance in terms of returning details of interest income to Revenue.”

Read: As it happens: The Budget 2014 Liveblog >

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