While the December 7th date for Budget 2011 is still some way off, speculation is already escalating in regard to the tax changes that we might expect to see. A rough figure of €3bn in savings has already been mentioned in the public forum and of this amount €2bn is expected to come from cuts in public sector spending and changes to the way income is taxed. Minister of Finance, Brian Lenihan, has already indicated that there is little scope in increasing income tax rates and so he may decide to cast the net wider and bring more people into the existing income tax net.
It has also been suggested that a new Universal Social Contribution may be introduced to replace the existing, and often complex, PRSI, Health Levy and Income Levy charges. Other potential targets include a reduction in tax relief for pension contributions and also the possible introduction of domestic water charges and a domestic property tax.
The €200 Non Principal Private Residence charge introduced in 2009 has proven that a potential domestic property tax could be a successful and relatively easy way for the Government to raise funds. With current estimates suggesting that over €400m worth of tax credits go unclaimed each year it's vital, now more than ever, to ensure that you are claiming everything that you are entitled to!