Leo Varadkar ‘not hung up on 30% income tax rate’

The Taoiseach has said he is “not hung up” on the introduction of a 30% tax band to help squeezed middle earners.

Leo Varadkar said he is “determined” to make policy changes to ensure people can earn up to 50,000 euro a year without having to pay the highest rate of income tax.

He added that whether that comes about by increasing the standard rate cut-off point or by the introduction of a middle tax rate of 30% will have to be decided at Cabinet.

Mr Varadkar proposed the introduction of a new middle rate tax band last March as a way of helping middle income earners.

He asked then finance minister Paschal Donohoe to examine the pros and cons of a new rate.

Asked whether a 30% rate will be introduced now he has become Taoiseach again, Mr Varadkar said it is “really important” that the Government helps working people with the cost of living, with a combination of pay rises and income tax reductions.

“I believe that work should pay,” Mr Varadkar said. “And I think that in Ireland people have to pay the highest rate of income tax on very modest incomes.

“We’re getting to (a standard rate cut-off point of) 40,000 euro next year. I’d like to move that up.

“The policy objective that I have set is that we should get to the point where people can earn up to 50,000 euro a year without having to pay the highest rate of income tax.

“It might take a few budgets to get there. But I’m determined that we should, whether we do it by increasing the standard rate cut-off point or by a middle tax rate.

“I’m not hung up on that and I never have been. But that’s something obviously we’ll have to discuss at Government level between now and the next Budget.

“But certainly, if the public finances allow it, I would like to see us continue on that road, so that you will be able to earn more without having to pay the highest rate of income tax.

“We’ve moved a long way in the last couple of years on that. And I want that to continue.”