PRESS RELEASE13/04/2005 Opposition typically negative on minimum wage increase
Opposition claims about tax liability in relation to the minimum wage are a typically negative response to a positive development, says Deputy Government Chief Whip and Cork North-Central TD, Billy Kelleher. ‘It is this Fianna Fáil-led government that introduced the minimum wage and oversaw its many increases. The increase to €7.65 an hour in May means that Ireland will have the second highest minimum wage in the European Union. ‘The reality is that any tax liability that may arise as a result of this increase will be very, very modest. Last December, the threshold for income tax was raised to €274 weekly or over €14,200 a year - almost double the British threshold of €7,200. ‘The number of earners exempt from income tax has grown steadily to about a third of all earners in 2005 - compared to about a quarter in 1997. The last time more earners were taken into the tax net was when Fine Gael and Labour held office. ‘The threshold at which income tax is paid has risen from less than €98 a week in 1997 to €273 today. Every budget since 1997 has taken more lower paid workers out of the tax net. I have no doubt that our future budgets will continue this policy,’ said Deputy Kelleher. He went on to point out that when the statutory minimum wage came into effect in 2000, less than 64% of the annualised figure of €11,330, or £8,923, was exempt from taxation. In Budget 2002, 90% of the minimum wage became exempt from tax and, in Budgets 2003 and 2004, this position was maintained even though the minimum wage increased in October 2002 and February 2004. ENDS
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