Introduction
The Minister for Finance delivered Budget 2010 on 9 December 2009. Anticipated as the most difficult Budget in the history of the State the emphasis in the Budget was on expenditure cuts. The Budget makes provision for a cut in public spending in the order of €4bn in 2010 with a further €2bn "pencilled in" for 2011. The impact of the expenditure cuts will be worst felt by public sector employees and social welfare recipients.
With the emphasis in the Budget on expenditure cuts, the Budget is light on tax changes. The Minister has not sought to raise income taxes in the Budget which is to be welcomed. Indeed, he has acknowledged that "we have reached the limit" in terms of tax rate increases although he has flagged the reform of our income tax system in 2011. As expected, the Minister has made further restrictions on the use of tax incentives by high earners and he also announced the introduction of a domicile levy for wealthy Irish citizens living abroad. The Minister has also flagged future tax changes, potentially to be introduced in the Finance Bill.