“Today’s Finance Bill is published against a backdrop of the worst economic forecasts since the 1950s with IBEC, Ulster Bank and Goodbody Stockbrokers all having forecast a 4% fall in economic activity for 2009 on top of at least a 2% fall this year.

“If the dire predictions about the Irish economy are even partially fulfilled we may well see this Bill superseded by a mini-budget sometime in the spring or summer of 2009.

“Governments around the world, from the UK, to China to the USA, are introducing fiscal stimulus packages to encourage spending and protect jobs.

“This Finance Bill has few if any identifiable measures which will support job creation or jump-start the economy.

“Instead, the income levy will see a big reduction in take-home pay, particularly for people on modest incomes. Anyone under 65 earning even €1 above the exemption threshold of €18, 304 will pay the levy on the whole of their gross income. The failure of the Minister to introduce any marginal relief will hit lower paid people particularly hard.

“By introducing a levy, the Minister has is seeking to deny that he is increasing income tax. The expected €1bn yield from the levy, which applies to gross income, would be equivalent to a 3% increase in the 41% tax rate (as per the Department of Finance’s ready reckoner).

“Budget 2009, with its many subsequent U-turns, has been one of the most shambolic” budgets produced by a Government in living memory.

Yesterday, the Government announced the introduction of tax credits in respect of medical insurance payments for the over 50s and a levy in respect of all medical insurance premiums. However, the Finance Bill is silent on this issue.

“I welcome very much section 13 of the Bill which should see an end to the so-called ‘Cinderella rule’ for non-resident tax exiles. Up to now, there was a blatant abuse, the ‘midnight rule’, whereby a non-resident tax exile could spend a day in the state provided they left by midnight in their jet or helicopter. The amendment of this rule follows a long campaign by the Labour Party to close down this abuse of the non-residency rules by a select coterie of tax exiles.

“The Bill contains significant measures to increase and broaden the tax reliefs on R&D expenditure, including to in relation to qualifying buildings. The Minister needs to set out the cost-benefit-analysis for these measures.

“The Minister has not limited in any way the property based tax-reliefs. In 2006, they cost €464m in tax foregone and enabled some of the wealthiest people in Ireland to massively reduce their tax bill. Section 18 widens the tax break for the construction of palliative care facilities by reducing the minimum number of beds from 20 beds to 8. Again, the Minister must explain his reasoning for this.

“In relation to the air travel tax, in section 50, “airline operators” are liable to pay the travel tax. It is not clear whether the Minister also intends to make private jets and helicopters liable for this tax, but he will presumably spell this out at committee stage.

“The Labour Party welcomes the proposal (section 91) to move to a special tax court, as previously recommended by the Law Reform Commission. The same section finally confirms that the Revenue Commissioners cannot recover tax from someone after their death unless an agreement had been previously been entered into”.v