It was apprehended that the Ireland budget 2008 would be a difficult one because the government had to restructure policies as per the prevailing economic conditions around the globe. Capital spending was one point, which was emphasized.
The business sector was also looking forward to the budget to follow the course of budgetary as well as taxation policies. The Ireland Budget 2008 was announced as “vigorous and determined” in the words of the Finance Minister of Ireland Brian Cowen. Ranging from borrowing to public spending, a wide range of aspects were addressed in the budget of 2008.
According to the Finance Minister, Ireland ought to have budget surpluses especially in an economy like Ireland, which was doing quite well. He expressed concern that owing to volatility in global housing markets, few uncertainties may be encountered on the way.
Taxation Policy in Ireland Budget 2008:
It was anticipated that “top rate of tax” would decline to 40% from 41%. This however, did not happen.
Tax credit for employee increased to 1,830.
Tax credit pertaining to home caretaker increased to 900, an increase by 130.
Thresholds pertaining to health levy to 500 per week from 480 per week. Annually, this increase would be 26,000 from 24,960.
It is being reckoned that the prevailing rate of growth of gross domestic product i.e. 4.75% would drop by 3%(real terms). Employment opportunities would also go down from 72,000 jobs to 24,000 jobs.
The Ireland budget 2008 laid more stress on public spending and the Minister urged that the public spending ought to come down to a single digit. To this effect, the National Development Plan or NDP comprised of expenses related to water services, transport and roadways. The amount assigned for these were 471 million, 2.7 billion and about 1.7 billion respectively. The budget alloted as much as 2.5 billion for funding various housing projects.
The Budget also observed an increased emphasis on education. The amount assigned for the developmental programs related to the same was 594 million.
It was declared in the budget that individuals who were paying 1million or less than that were not required to make payment of stamp duty for the first 125,000. Thereafter, a 7% would be levied on the remaining amount.
There has been an increase in fund allocation towards the Early Childcare Supplement, under which children less than 6 years of age are entitled to the benefits. These benefits are likely to increase to 1,000 from 100. People were taken by surprise when it was declared that credit card duties were brought down to 30 from 40. Duty pertaining to debit cards as well as ATM cards were made 5 instead of the existing 10.