Revealed: The €1.8 billion tax cuts will be considered by the government in the 2023 budget negotiations

Tax cuts that would cost €1.8 billion are being considered by the government as part of budget negotiations, Independent.ie can reveal.

Ministers are considering raising standard earnings rates by €2,500, which would cost the state €657m a year.

Public Expenditure Secretary Michael McGrath outlined the possible options for party colleagues at the Fianna Fáil think-in in Mullingar over the past few days.

These numbers are the first clues to the true cost of the tax cuts being considered by government ministers.

Increasing the USC tapes by 2 pcs by €1,500 is expected to cost €129 million and reducing the 4.5 pcs by 1 pc 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 could also be reduced by 100 euros from 1,700 euros to 1,800 euros, which would cost 226 million euros.

These tax cuts alone would cost over 1.8 billion euros.

However, it is noteworthy that no cost calculations were provided for a 30 percent tax rate, which was much discussed by Fine Gael leader and Tánaiste Leo Varadkar.

He has promised tax cuts that would help the squeezed middle the most.

Mr Varadkar has said his proposal for a new median income tax rate of 30 per cent is still “on the table” and that nothing has been decided in the run-up to the budget later this month.

“It’s still an option that I’ve considered,” he 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 would not be easy and would 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.

Mr Varadkar was speaking at the announcement of an 80 cent increase in the national minimum wage to €11.30 from January 1 next year.

The Tánaiste said the increase would amount to an additional €31 per week, €120 per month or over €1,600 per year for those earning the minimum wage. The increases would be greater than any increase in welfare rates in the budget.

He said it was the largest single increase in the minimum wage since it was invented, which could benefit 250,000 people or more.

Mr Varadkar also said a new sick pay bill will come into force next year, giving almost all workers in the state the right to sick pay of up to €110 a day.

Meanwhile, ministers are also considering extending three fiscal measures that expire at the end of the year and would cost just over €830 million.

This would include extending the excise tax cut on petrol and diesel by six months, extending the 9 percent VAT rate on electricity and gas by six months, and extending the 9 percent VAT rate to the full year.

Further excise tax cuts would cost the state €355 million, and cuts in electricity and gas would cost €50 million.

Expanding the 9 percent VAT hospitality rate, which Finance Minister Paschal Donohoe was reportedly upset about because of high hotel room prices, would cost an additional €427 million.

The possible fiscal measures give a hint of some of the measures on the table as crunch meetings take place at government buildings in the coming weeks.

The total cost of the possible tax package amounts to 2.6 billion euros.

Mr McGrath told journalists in Mullingar that many decisions are being made late in the process as ministers have promised to help those hardest hit by the rising cost of living.

https://www.independent.ie/business/budget/revealed-the-tax-cuts-of-18bn-being-considered-by-the-government-under-budget-2023-negotiations-41988715.html Revealed: The €1.8 billion tax cuts will be considered by the government in the 2023 budget negotiations

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button