Ireland's coalition government detailed 1.6 billion euros (857 million pounds) worth of tax increases on Tuesday in the second part of what it hopes will be the toughest budget of its five-year term of office.
Following are highlights from Minister for Finance Michael Noonan's speech to parliament.
AIR TRAVEL TAX
The Government was disappointed earlier this year when Aer Lingus
I am establishing an Advisory Group to advise me on NAMA's strategy and its capacity to deliver on that strategy through property disposal and the ongoing management of assets.
In light of the revenue and expenditure figures for November and the other information that has come to hand, my Department now estimates the General Government Deficit for this year will be 10.1 per cent of GDP. This is less than the 10.6 per cent required by the EU/IMF Programme.
No matter what happens in the wider euro zone, Ireland needs to restore sustainability to its public finances. If the euro zone crisis recedes, we are amongst the best placed to grow quickly, as evidenced by the EU Commission's growth forecasts. If the euro zone crisis persists, it is equally important for the state to reduce our dependence on borrowing.
The Programme for Government states that there will be no increase in income tax. There will be no increase in income tax.
We have reviewed the impact of the Universal Social Charge and I am pleased to announce that today I am proposing changes to the USC that will help the low paid, part-time and seasonal workers in labour-intensive areas like the hospitality sector and in farming. From 1 January 2012, the exemption level will be raised from 4,004 euros to 10,036 euros.
PROPERTY MARKET MEASURES
The Stamp Duty rate for commercial property transfers will be reduced from the current top rate of 6 per cent to a flat rate of 2 per cent on all amounts from midnight tonight in respect of all non-residential property, including farmland as well as commercial and industrial buildings. The current stamp duty arrangements for residential property will continue to apply.
I am fully aware of the difficulties that upward only rent reviews are causing for some businesses. It has not proved possible to develop a targeted scheme to tackle this issue that would not be vulnerable to legal challenge or require compensation to be paid to landlords.
The National Asset Management Agency (NAMA) advise me that it has a policy guidance for dealing with tenants' difficulties arising from upward only rent reviews which they have agreed to publish today. The NAMA policy guidance provides an opportunity for NAMA to approve rent reductions where it can be shown that rents are in excess of the current market levels and viability is threatened.
The Government is committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. Therefore, I am going to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period.
STATE OF IRELAND'S ECONOMY
All serious international commentators now believe that Ireland's longer-term position is sustainable and that with prudent management over the next four years we will get over our difficulties.
As a small country with an open economy, the crisis in the euro zone has a profound effect on our economic prospects. We are committed to playing a full part in resolving this crisis, so that the benefit of the common currency will continue for Ireland.
In spite of uncertainty, a gradual recovery has begun to take hold. Next year, the Department of Finance is forecasting an increase of 1.3 percent in the volume of GDP with around a 2.5 per cent increase in nominal GDP.
All forecasters agree that growth will be significantly stronger in 2013 and subsequent years. This growth is driven by the exporting sector, both international and indigenous.
CORPORATION TAX/EXPORT GROWTH MEASURES
Today, I want to say to our friends in the multinational sector who continue to invest so strongly in Ireland and Europe, there will be no change in Ireland's 12.5 per cent Corporate Tax Rate. The Government have successfully protected this rate even under international pressure and given our fiscal state.
I am introducing a Foreign Earnings Deduction to further support our export drive by aiding companies seeking to expand into emerging markets. This targeted deduction will apply where an individual spends 60 days a year developing markets for Ireland in Brazil, Russia, India, China and South Africa - the so called BRICS countries.
(Reporting by Padraic Halpin; editing by Stephen Nisbet)