"Absolutely no intention" to increase property tax in Budget 2017 - Dept of Finance

It says an internal paper to scrap the USC is "not relevant in the present context"

 "Absolutely no intention" to increase property tax in Budget 2017 - Dept of Finance

Ministers Simon Coveney, Michael Noonan and Simon Harris with young Fine Gael and general election candidates at the launch of the income calculator for Universal Social Charge abolition | Image: Rollingnews.ie

The Department of Finance has played down internal papers which suggest income tax could face a 10% hike if Universal Social Charge (USC) is scrapped.

The claims come in an internal briefing paper, prepared by civil servants for the Finance Minister Michael Noonan.

The paper, written in February, outlines alternative taxes that might be needed to make up any shortfall in USC.

But the Department of Finance says the papers predate the Programme for Government, and are "not relevant in the present context" - because the charge is being phased out and not scrapped overnight.

It also says there is "absolutely" no intention to increase property tax in the forthcoming budget.

"The paper in question explores the phase out of the USC rather than how to abolish it overnight," the department adds.

"The Government never intended abolishing in USC in one go. The plan is to phase out the USC.

"This policy has been ongoing now for the last two budgets where we began this phasing out process."

A spokesman for the Department of Finance says: "While scope is limited in this year’s budget there will be a further move to curb USC especially for mid to low income earners.

"The Income Tax Reform Plan provides a number of options on how the USC can be phased out over a number of years. This will be discussed by the appropriate Oireachtas Committee before the announcement of the budget for 2017."

The briefing paper outlines ways to cover the shortfall from getting rid of the USC - including adding €1.50 to the price of a pint. 

Others include to bring corporation tax to almost 20% or hikes to VAT to make up the lost €4bn in revenue.

The documents were obtained by Sinn Féin's Pearse Doherty.