Next Tuesday, Leo Varadkar and Finance Minister Paschal Donohue are set to announce their first Budget since taking over their respective roles as Taoiseach and Minister for Finance.
By all accounts, Budget negotiations are going right down to the wire and it is as yet unclear to the public exactly where spending will increase how much less tax we can expect to pay.
The Universal Social Charge, introduced in 2011 as an austerity measure, is not expected to be done away with. Instead, Fianna Fáil finance spokesman Michael McGrath has said he expects “There will be a further reduction in USC with an emphasis on low- and medium-income levels.”Tax cuts of any kind are expected to continue at a “gentle pace.”
There is also a major push within Fine Gael for Budget 2018 to increase the amount at which people start paying the higher rate of tax by €1000. If put into effect, this means that earners would be eligible to pay 40% on everything over €34,800 rather than €33,800.
Government figures have confirmed that a weekly €5 benefits increase for the elderly, lone parents and the disabled is on the table, though they have not ruled out the possibility that the increase will come to less than that.
Unsurprisingly, the trend of increase tax on tobacco and alcohol is set to continue — and this time will likely be joined by a sugar tax to be enforced from some point in 2018.
Also being considered is a “gambling tax” that would see the rate of duty paid on bookmakers’ annual sales shoot up from 1% to 2.5%, with the actual cost of the tax being passed on to the consumer. This is a move favoured by Horse Racing Ireland.
The government is playing its hand close to its chest on this year’s Budget, not least because negotiations are ongoing, but the theme so far certainly seems to be one of “modest improvement” rather than “grand change.”
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