Dáil Éireann Debate, Wednesday - 3 December 2014
44. Deputy Michael Healy-Rae asked the Minister for Finance his plans to cease the universal social charge which was introduced as a temporary measure to assist the country regain control of its finances; and if he will make a statement on the matter. [46494/14]
View answerThe Universal Social Charge (USC) was introduced in Budget 2011 to replace the Income Levy and the Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit. It is a more sustainable charge than those it replaced. It is applied at a low rate on a wide base. I should point out that it was never intended that the USC would be a temporary measure and thus I have no plans to cease it. The USC was designed and incorporated in to the Irish taxation system as part of its permanent structure and the revenues collected play a vital part in meeting the many expenditure demands placed on the Exchequer.
However, as a result of the changes introduced in the recent Budget, all those who currently pay income tax and or USC will see a reduction in their tax bill next year. As a direct result of the extension of the exemption threshold from €10,036 to €12,012, an additional 80,000 low income earners will be removed from the charge entirely. This means that 28% of all income earners will not pay any Universal Social Charge at all.
