Budget Submissions: doubling betting tax, leaving alcohol untouched, a possible reprieve for smokers, and closing an inheritance tax loophole

By | 28th January 2019

A selection of submissions for Finance Minister Paschal Donohoe ahead of Budget 2018:

Among the most interesting parts:

* The minister was told the “opportune time” had arrived to double betting tax amid ongoing pressure to increase tax on gambling.

Mr Donohoe doubled the rate from one to two percent in this year’s budget and was afterwards met with fierce opposition from the bookmaking industry.

His officials had warned that alternative proposals to tax punters directly or the profits of bookmakers would not be possible this year.

* Minister Donohoe also considered giving a reprieve to smokers in the Budget after seven consecutive years of excise duty increase.

Asked for his views on a tax rise for tobacco, the minister had written: “Not currently minded to implement a further increase.”

However, cigarettes did ultimately take another hit in Budget 2019 with a 50 cent rise in the price of a box of twenty cigarettes and similar rises for other tobacco products.

* For alcohol products, Minister Donohoe heeded the advice of officials who warned Brexit and cross-border shopping could counteract any tax increase.

“I am currently minded to make no changes,” said the minister. “Will review in final days before Budget.”

Officials said there was now a “significant price differential” between how much was paid for booze in Dublin and offers available north of the border in Newry.

* The Department of Finance were forced to play whack-a-mole with wealthy tax avoiders after a new scheme for dodging inheritance tax was uncovered.

Two years ago, the Department shut down a loophole where high-wealth individuals used an exemption to transfer properties tax-free to their children.

However, the Revenue Commissioners have now discovered that a new system was being used for inheriting valuable houses without having to pay any tax.

Those involved used what are known as ‘discretionary trusts’, a system usually set up to manage a person’s assets on behalf of their children.

You can read more in the documents themselves: