Brian Cowen (Laois-Offaly, Fianna Fail)

——PRSI and health levy measures is estimated to be €432 million in 2008 and approximately €585 million in a full year. Following the budget the total number of earners who are outside the tax net in 2008 will be more than 878,000.

The increases in credits and bands mean that about four out of every five income earners will continue to pay tax at no more than the standard rate of income tax and that about two out of every five income earners remain outside the tax net, as outlined in the summary of budget measures.

HELPING BUSINESSES — TAX

MEASURES

The capacity of the economy to grow and develop largely rests on the ability of the business sector, both large and small, to prosper. It is the wealth creator and generator of employment in this country.

I am pleased to announce the following further tax measures aimed at the business sector.

Renewal of Section 481 Film Relief

I am renewing section 481 film relief until 2012 on the current basis. Any adjustments to the relief will depend on the outcome of a study of the relief that I have had commissioned. Any such changes will be announced in the Finance Bill.

Small and Medium Employers

In term of supporting small and medium enterprises I will introduce the following measures: the small company tax liability threshold for the payment of preliminary tax on the simpler prior-year basis is to be increased from €150,000 to €200,000; the tax liability threshold for new start-up companies at or below which they do not have to pay preliminary tax in their first accounting period will be increased from €150,000 to €200,000; the small business VAT registration thresholds will be further increased from €35,000 per annum for services and €70,000 per annum for goods to €37,500 and €75,000, respectively, from 1 May 2008 — this measure will take about 2,700 businesses out of the VAT system. These measures will support business and enterprise and will cost €16.5 million in 2008 and €27 million in a full year.

Details of certain technical but important VAT simplification measures are set out in the summary of budget measures.

Payment Cards

Modern commercial financial and retail transactions should increasingly be electronically based for reasons of efficiency and security. This will benefit not just businesses but also the ordinary person in the street. The Government is willing to make its contribution to the delivery of this desirable policy objective. In this regard, I propose to reduce the stamp duty charge on financial cards as follows: a 25% cut in the duty on credit cards, reducing the charge from €40 to €30; a 50% cut in the duty on combined cards, reducing the charge from €20 to €10; and a 50% cut in the duty on ATM and debit cards, reducing the charge from €10 to €5. This change will be part-financed by an increase in the duty on cheques from 15 cent to 30 cent per cheque.

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