Belfast Telegraph

Budget threat to multibillion loan

Ireland's multibillion loan from the International Monetary Fund and Europe is in danger unless the Budget is put into law this week, Finance Minister Brian Lenihan has claimed.

After agreeing a fast-tracked timetable to enact the Finance Bill, the minority Government signed off on several changes to the legislation, including personal tax.

Mr Lenihan claimed the many controversial reforms were needed as part of the 85 billion euro IMF-EU rescue package.

"Any uncertainty, or worse failure, to have it (the Bill) enacted would have been damaging to Ireland internationally and could have jeopardised the arrangement we have reached with the EU and the IMF," the minister said.

"This Finance Bill is being brought forward in an unprecedented set of political circumstances."

Several amendments were made to the Bill at a Cabinet meeting.

The biggest change will see the self-employed paying more tax as a higher rate of the new Universal Social Charge is applied.

Mr Lenihan said the 7% charge on business owners earning more than 100,000 euro will jump to 10%. He claimed it is being imposed to ensure medical card-holders pay a cheaper rate.

Mr Lenihan said: "The Universal Social Charge represents a very substantial change to our tax system. It is based on the principle that everybody must pay according to their means."

The new rate means people earning up to 10,036 euro will be hit with a 2% charge, rising to 4% for those earning more.

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