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The average price of a new car would increase by more than 1,000 euros with a proposed revision of VRT in the next budget.
The government’s prestigious think tank says buyers of new cars with “average” or “above average” emissions should pay more taxes, to propel people toward greener vehicles.
The radical tax reorganization, proposed in a special report by the Tax Strategy Group, takes a carrot and stick approach in which “the polluter pays.”
In the long term, households may have to start paying excise taxes on electricity for the first time.
That’s to offset the drop in state revenue from motor fuel taxes when people switch in bulk from diesel and gasoline to electric vehicles. This new tax is not recommended in the short term, but it marks a significant shift in focus.
Meanwhile, companies, which already pay special taxes on electricity, would face an increase in the rate they are charged.
Self-employed workers would also face four successive increases in the PRSI budget under the proposals of the high-level advisory body.
Their contributions to the social insurance fund would increase from 4% to 11.05% in increments between 2021 and 2024.
Separately, luxury home buyers and cuckoo funds could be hit by a stamp tax hike in October, depending on the policies being considered.
The Fiscal Strategy Group is chaired by the Finance Department and its membership is made up of senior officials and political advisers. Articles are prepared annually on various changes in fiscal policy and help form a menu of budget options.
Online editors
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