PERSONAL FINANCE:THE GOVERNMENT has raised deposit income retention tax (Dirt) on ordinary deposits and certain other savings, halved the stamp duty on ATM-Laser cards and raised stamp duty on cheques.
Minister for Finance Brian Lenihan said the rate of Dirt would rise to 23 per cent from 20 per cent on ordinary deposit accounts and to 26 per cent from 23 per cent on certain other savings, such as investment bonds.
He said this would raise €85 million for the exchequer in 2009.
Stamp duty on ATM-Laser cards will fall to €5 from €10, while the stamp duty on ATM-only and Laser cards will fall to €2.50 a card where individuals hold separate cards for each function.
Mr Lenihan said that to fund these reductions, stamp duty on cheques would rise from 30 cents to 50 cents a cheque.
"This important step will further encourage the use of electronic payment methods," he said.
Mr Lenihan said the Government would set up "a high-level group" to prepare "a national payments implementation plan" over the next two years to move to electronic payments from a system that relies on cheques and cash.
The Minister said this had "the potential to yield significant competitive benefits".
Pat Farrell, chief executive of the Irish Banking Federation (IBF), which lobbied for changes to encourage a move towards electronic payments, said the economy could save €1 billion a year by reducing dependence on cheques and cash.
"It is a further progression to up the pace on the move towards electronic payments," Mr Farrell said of the budgetary changes.
Cheques represent more than 75 per cent of the value of all non-cash payments in the economy.
This compares to an average of less than 4 per cent across the European Union, according to the IBF. Irish consumers write about 130 million cheques a year.
