The recent decision by the Irish Government to scrap the ‘Bereavement Grant’ has less than impressed those involved in the Funeral business in Ireland.
The 850 Euro grant was previously paid to families of the recently deceased to assist with funeral expenses. In an attempt to deflect from criticism of the grant’s abolition Ruairi Quinn, the Irish Education Minister, suggested that there is ‘insufficient competition’ in the funeral business in Ireland. Clearly he thinks that the cost of funerals is being inflated by the bereavement grant and thus has no problem disposing of it.
It is estimated that the cost of a Funeral in Ireland is about 5000 euro (just under 7000 US$). Welfare Minister Joan Burton pointed out that there is still a generous allowance in the event of the pensioner’s death:
“If one partner of a pensioner couple dies, their spouse continues to get the social welfare payment of the deceased spouse for six months. That is worth roughly 1,200 to 1,400 Euro.”
Apart from the Bereavement Grant the Telephone Allowance for Pensioners has also been scrapped while Welfare for those aged under 26 years has been reduced. The Fine Gael and Labour Party Government made much of the fact that they have not increased the rates of taxation in their most recent annual budgets. Nevertheless their tenure in office has seen a whole host of new ‘stealth’ taxes introduced in tandem with some pretty savage cuts to services.
These latest cutbacks are just one of a number of measures in the recent annual Budgets that have attempted to roll back some of the largesse offered to Irish citizens during the Celtic Tiger years.
Times are very different now.
With the country effectively bankrupt the last five years has seen some very severe so-called ‘austerity’ measures implemented by successive Irish Governments. It would be expected then that a people who enjoy their reputation as being ‘The Fighting Irish’ would hit back and hard.
Opposition from the Irish population has been relatively minimal. No Greek or French style riots. No imprisoning of Bankers and Government officials as happened in Iceland. The Irish have taken the economic downturn pretty much in their stride.
by Michael Green
The Irish tax system is under the microscope after US Senator Carl Levin called the country a ‘tax haven’ and this despite the fact that the US government does not officially class Ireland as one.
The Senator is clearly unhappy with the fact that Apple Inc, the computer technology company, is reported to only pay as little as 2% tax on its profits by registering its business in Ireland. By doing this the profits can be funnelled through Ireland and then on to an actual tax haven country, thus avoiding a big tax bill in the US.
It is clearly not unreasonable for the US Senate to be unhappy with this situation. Huge companies such as Google and Apple have for many years now avoided paying large amounts of tax in their homeland by the use of these schemes.
The Irish government are furious and have repeatedly denied that any special deal was provided for Apple. The standard rate of corporation tax in Ireland remains at 12.5%. Most of the foreign multinational companies based in Ireland are American and employ about 150,000 people in the country. The IDA (Industrial Development Authority) of Ireland intends to write to Senator Levin about his comments.
Barry O’Leary of the IDA:
Irish officials will definitely be clarifying and making sure he (Senator Levin) is up-to-date on exactly what happens in Ireland ……the description he used (tax haven), I dont think anybody else would.
His annoyance with the US Senator was echoed by Government Minister Pat Rabbitte:
If there were monies channelled through Ireland (by US multi-nationals) then that is a function of what is allowed by the American tax system.
It has been suggested that the US authorities could easily close off this tax arrangement by changing their own tax law. Putting the ball back in the US Senator’s court is unlikely to reduce the pressure that the Irish Government is under and not just from the US. Fellow EU countries, especially France and Germany, are also unhappy with Ireland’s 12.5% tax rate for corporations and have made several attempts over the last few years to have the rate upped.
A new tax on the private use of tap water is to be introduced in Ireland in 2014. This is despite the fact that most Irish homes will not have an actual water meter installed until 2016 at the earliest. A flat-rate fee will be introduced initially and will be based on the size of a property as well as the number of occupants.
Irish businesses already pay for their water usage but private homes do not, the funding for which comes from general taxation revenue. The new plans to install a water meter in every house in the country have, like the property tax, been greeted with dismay by a population that is already groaning under the weight of a huge and increasing tax burden. It is expected that average annual usage per home would cost approximately 400 euro (approx US$530), with heavier users paying more.
It is broadly accepted that there is a case for charging for water usage. Estimates put the wastage of usable water at over 50% from the country’s creaking and in many cases Victorian water pipes network. Owners of rural houses usually have to sink their own well or else join a water scheme while urban houses do not have any such expense so there is a real urban/rural divide on the issue.
On the other hand Taxpayers can reasonably argue that they already pay for water in their income and sales taxes and are entitled to ask just why they are being told to pay again.
Edited by Michael Green
The Irish government looks set to follow the lead of several other countries and introduce a tax on sugary soft drinks such as lemonade and cola. It is expected that the tax will be a 10% hike in excise duty which would add about 20 cents to the cost of a 250 cents bottle of soda. The government is torn between wanting to reduce the intake of fattening foods and drinks in the general population while also not wanting to damage employment and add to household bills.
Efforts in Ireland to decrease the consumption of certain products by taxing them have had only limited success. Over the decades there have successive small increases in the price of cigarettes and alcohol. The tax hikes on cigarettes have very much outpaced those on alcohol and certainly do have an effect on consumption, especially when combined with the ban on smoking in the workplace and the current societal disapproval of tobacco. The overall momentum against smoking allowed successive governments to tax cigarettes heavily.
The same cannot be said about alcohol consumption. The policy of continually raising the tax on alcohol in small amounts has not had any great effect on consumption. Critics of the policy advocate for a single very large increase in tax on alcohol, perhaps even to increase the price by 50% or 100%, in order to have any kind of real shock impact. The revenue raised from this tax could be used for health education programs and even to fund hospital emergency departments that are inundated with alcohol-related patients every weekend.
The need for action in the food and drinks sector is now obvious. 60% of the Irish adult Irish population and nearly 25% of all 7-year-olds are classified as being either overweight or obese. By any measure this is a shocking statistic and is a recipe for a diabetes epidemic in the years to come, along with a whole other raft of health problems.
The introduction of a sugar tax on certain flattening products is likely a good idea, but unless it is of a sufficient amount then it seems certain that its impact will be minimal.