Tuesday, 25 October 2022
Finance Bill 2022: Second Stage
This is substantial legislation. I welcome the Finance Bill, of course, which is a detailed and substantial piece of legislation. I will not get to say much about it in my allotted three minutes.
I am sympathetic to the remarks made on various sides of the House about the benefit-in-kind scheme. I do not know if that has been properly thought through. I urge the Minister to look at it again while there is still an opportunity to do so.
I welcome the improvements in the employment incentive investment scheme and the entrepreneur's relief scheme, not because of any desire I might have to make the rich richer but because it is important that we strengthen the indigenous sector. Foreign direct investment has proved a tremendous boon to this country but in view of the uncertain world we now live in, it is very important to build up the indigenous sector, particularly SMEs, so that our tax yields can be future-proofed against whatever is coming down the track.
I welcome the Government's decision to extend the threshold for the higher rate of income tax to €40,000. People in other countries to whom I have spoken are amazed that we come into the highest tax rate at such an early stage. The Irish income tax system has rightly been described as the most progressive in the world. However, I wonder whether, wittingly or unwittingly, we make it a little less progressive through this decision. The difficulty if the threshold is raised from €36,800 to €40,000 is that working people who earn up to €36,800 do not get that particular benefit. I know that some misleading figures have been put around here because many of those people qualify for the working family payment, if they meet the various criteria. Some qualify for more than others. Nevertheless, I am a bit mystified as to why something could not have been done, for example, with USC, to at least narrow the advantage it has given to people who earn a multiple of others who earn less than €36,800 per annum. That should have been done.
I also welcome the extension of the TBESS to professionals. That was a good move. However, I am somewhat amazed it has not been extended to charities. Charities are facing increasing demand, decreasing contributions and increasing costs. Their reserves are depleted after the pandemic. The charity sector is very important. It does an enormous amount of work, particularly in the areas of mental health and disabilities. They assist people with housing, etc. They are also businesses, albeit not for profit. They are facing a perfect storm. Even at this late stage, the Government should look at the notion of extending this particular concession to charities. I do not know how much it would cost. Perhaps the Minister could examine that. I would appreciate it if he would respond specifically to that point when he is replying to this debate.