DUBLIN: The Government has been advised it may have to increase property tax by 600 per cent or raise the price of petrol, diesel and alcohol if it scraps the Universal Social Charge.
The documents drawn up by the Department of Finance and released under the Freedom of Information Act warn against the removal of the levy, claiming it will narrow the tax base and would be a regressive move. A briefing note prepared in February for an incoming government outlines four different options to replace the revenue lost by the immediate abolition of the charge.
The first is to increase the local property tax sixfold, increase commercial property stamp duty by 1.75 per cent, increase stamp duty to 3 per cent, raise capital gains tax to 38 per cent and increase capital acquisitions tax from 33 per cent to 43 per cent.
The second option is to increase the price of petrol and diesel by 18 cent per litre, increase excise duty on a pint of beer by €1.50, increase excise duty on spirits by €1 per half-glass, reintroduce the 13.5 per cent VAT rate for the tourism sector, and increase all other forms of VAT including raising the 23 per cent rate to 25 per cent and increasing the VAT rate on children’s shoes to 5 per cent.
The third option is to increase the 20 per cent income tax rate to 25 per cent and the 40 per cent income tax rate to 45 per cent.
