Budget 2003 will cause controversy not for what the Minister for Finance announced but what he didn't. By leaving tax bands and allowances unchanged and increasing indirect taxes, Mr McCreevy has effectively raised taxes by stealth.
The basic rate of VAT has been increased by 1 per cent to 13.5 per cent and the old reliables have also been targeted. Cigarettes will rise by 50 cents for a packet of 20, spirits will rise by 20 cents, alcopops by 35 cents and diesel by 3 cents per litre.
This measure is estimated to yield €187 million in 2003 and €224.5 million in a full year.
Child benefit payments will only rise in line with the rate of inflation, a fall in real terms.
Mortgage interest relief for first time buyers has been increased to €4,000 for a single person and €8,000 for a couple but when this is cancelled out by adjusted for the 1 per cent rise in VAT on new houses this will offer little comfort to house buyers who lost the first time buyers' grant.
Consumers will be hit by an increase a charge in credit cards which will increase from €19 to €40. A joint ATM/Laser card will now cost €20 per annum. Stamp duty on cheques will rise to 15 cents each.
The financial sector will be forced to pay a tax levied on deposit interest for three years to 2005 capped at €100 million per annum.
Corporation tax will be reduced from 16 per cent to 12.5 per cent from January 1st 2003 as announced in 1999, at a cost of €305 million.
Social welfare payments have been index linked with little real increase for pensioners and the unemployed.
As expected the payment date of Capital Gains Tax has been brought forward. In relation to CGT due on or before September 30th in a tax year, a preliminary payment will be required to be made by October 31st in that tax year. As respects CGT due for disposals made in the period October 1st to December 31st in that tax year, payment will be required to be made by January 31st in the following tax year.