REACTION:THE INTRODUCTION of tax incentives aimed at luring senior multinational executives to Ireland has been defended by Minister for Finance Michael Noonan, who said they were designed to promote job creation.
The tax breaks for high earners and increased mortgage relief for struggling homeowners were among the provisions of the Finance Bill published yesterday.
Mr Noonan said the special assignee relief programme would reduce the cost to employers of bringing skilled individuals in their companies from abroad to take up positions in Ireland. Such individuals could be transferred to head up new divisions of the company or take charge of new product development that would create more jobs in Ireland.
The Minister added that the IDA had asked him to adopt the scheme, and it would be kept under review to see if it delivered on its job-creation objective.
The Minister said the Bill was fundamentally about fairness, and it followed up the announcement in the budget that mortgage interest relief would be increased to 30 per cent for first-time buyers who purchased their homes in the years 2004 to 2008.
Relief for first-time buyers this year has been increased to 25 per cent to encourage people into the housing market.
Opposition parties attacked the Bill, saying it was unfair to middle and low-income families.
Fianna Fáil finance spokesman Michael McGrath TD described it as the final chapter of a regressive and deeply unfair budget which had hit low and middle-income families the hardest.
He said that while there were welcome measures in the Bill, including the enhancements to the research and development tax credit regime, it lacked ambition and had a distinct lack of creative thinking.
“The increased mortgage interest relief will be welcomed by some mortgage holders who bought between 2004 and 2008, but does nothing to help people who bought their homes before or after this time and who may now be out of work and experiencing severe financial hardship.”
Mr McGrath said Fianna Fáil would examine the Bill in detail and engage constructively in the debate in the Oireachtas over the coming weeks.
“We will bring forward amendments which we believe can make the Bill fairer and have a more positive impact on the domestic economy,” said Mr McGrath.
Sinn Féin finance spokesman Pearse Doherty accused the Government of protecting the wealthy and punishing low and middle-income families.
“Fine Gael and Labour are repeating the mistakes of Fianna Fáil.
“They are introducing a Finance Bill that will heap more taxes on low and middle-income families while at the same time giving a tax break amounting to millions of euros to high earners.
“They are doing so without any guarantee that this new tax break will result in a single job being created.”
Mr Doherty criticised the special assignee relief programme, saying that over five years those who benefited would be able to earn up to €650,000 tax free.
“It is not spelt out, nor is it believable, how one high-earning individual could come to this State and create more jobs purely because of a larger tax-free incentive for themselves,” said Mr Doherty.
