Budget 2023 Ireland: €1,000 family boost in budget as tax and USC cuts on cards

The average worker could get almost €1,000 a year in tax cuts on their household if the government introduces a range of measures outlined this week.

Public Expenditure Secretary Michael McGrath has unveiled a potential €1.8 billion budget package that includes sweeping income tax and USC cuts and increases in tax credits.

If all measures were announced on budget day, a taxpayer with an annual income of 45,000 euros could save up to 959 euros per year.

Mr McGrath gave a presentation at the Fianna Fáil think-in earlier this week, setting out some of the key tax measures being considered by the government ahead of the September 27 budget.

He outlined how much a series of specific tax cuts would cost if agreed by the three coalition leaders.

Ministers are considering a €2,500 increase in standard income rates, a move that would cost the state €657 million a year.

A €1,500 2 percent increase in the USC band is expected to cost €129 million and a 1 piece decrease in the 4.5 percent band would cost €498 million.

Other tax cuts under consideration include increasing personal tax credits by €100 for single people and €200 for married people to €1,800 and €3,600 respectively.

This is expected to cost 295 million euros in a full year.

The PAYE loan can also be increased by 100 euros from 1,700 euros to 1,800 euros, which would cost 226 million euros.

These tax cuts alone would cost more than 1.8 billion euros. However, ministers have hinted that there will be a tax package of around €1 billion in the budget.

A government source urged caution about the whole package of possible proposals, saying it was likely that some measures would be included in the budget but not all.

Ministers have previously hinted that a €1 billion tax package will be introduced into the €6.7 billion budget alongside a raft of one-off measures to lower the cost of living.

Mr McGrath’s expenses were not provided for a 30 per cent tax rate discussed by Fine Gael leader and Tánaiste Leo Varadkar.

He has promised tax cuts that would help the “crushed middle” the most.

Mr Varadkar has said that his proposal for a new appropriation
The 30 percent income tax rate is still “on the table” and nothing has been decided in advance on the budget.

“It’s still an option I’ve been considering,” Mr Varadkar said.

“In that regard, there are a number of things that need to be considered, particularly if the Revenue Commissioners were to be able to enforce them.”

He said this will not be easy and will take time to come into effect, but insisted a tax cut would be announced later this month.

“The most important thing is that middle-income people will see a significant reduction in the income tax they pay,” he said.

High-level budget negotiations are underway within government and the first day of the Dáil’s resumption after the summer recess was marked by the cost of living crisis.

Sinn Féin Chairwoman Mary Lou McDonald said the €200 electricity payment earlier this year was “eaten up” before it was even paid out. She insisted it would be a flawed approach.

The party has instead proposed bringing energy prices down to pre-crisis levels by capping future price increases.

However, Taoiseach Micheál Martin asked Sinn Féin to provide detailed cost proposals.

The government has indicated that while it examines price caps similar to those announced last week by new British Prime Minister Liz Truss in the UK, it is more likely to use electricity credit.

“What you are proposing would amount to a blank check for energy companies,” Mr Martin told Sinn Féin’s chairman.

https://www.independent.ie/irish-news/politics/1000-boost-for-families-in-budget-as-tax-and-usc-cuts-on-cards-41990501.html Budget 2023 Ireland: €1,000 family boost in budget as tax and USC cuts on cards

Fry Electronics Team

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