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Taxing Issue
Confirmed: USC will be cut
The cuts in the tax mean that people earning €35,000 a year will save €175.
THE UNIVERSAL SOCIAL Charge is to be cut, Finance Minister Michael Noonan has confirmed.
Noonan said that the cuts were being announced to “ease the burden” on many. It forms part of a €500 million tax cut for Irish workers.
Under the Budget plan, the lowest three rates of USC will be cut by half a percent each.
That will amount to a €335 million cut in USC across the board. Noonan said it was a further step towards abolishing the tax entirely.
Though relatively small, these changes will have a material impact on the disposable income of lower and middle-income earners – more importantly it signals this Government’s intent to phase out the USC over time as resources permit. The impact on different levels of income is reflected in the distributional tables published in the Budget book.
It will mean workers will pay .5% on the first €12,012, 2.5% on the next tranche of €6,760 and 5% on the next €51,376.
The tax will also not kick in until a person earns €18,782, up €104 from last year.
The cuts in the tax mean that people earning €35,000 a year will save €175, or €3.36 a week.
Noonan also announced that Dirt tax would be cut by 2% a year until 2020, bringing it down to 33%.
Read: Budget 2017: Here are the details of the new ‘help to buy’ scheme for first-time-buyers
