In a highly anticipated move, the government has confirmed a significant reduction package in taxes for the upcoming Budget 2025. Minister for Finance Jack Chambers announced that the budget, set to be unveiled in two weeks, will include a substantial income tax and USC reduction package, aiming to benefit workers and households across the country.
The €8.3 billion package is expected to encompass various measures aimed at providing relief to taxpayers. Energy credits, increases in child benefits, and bonus payments for social welfare recipients are all on the cards. Minister Chambers emphasized the government’s commitment to ensuring that the tax system rewards hard work, with the average worker projected to be €1,000 better off post-Budget.
Taoiseach Simon Harris echoed this sentiment, describing the upcoming budget as a “pro-business package” that will include changes to the tax system to promote innovation and investment. The government’s focus on bolstering the economy and supporting businesses is evident in its plans to implement cuts to USC and income tax rates, further alleviating the tax burden on individuals and households.
As part of a €1.4 billion tax package, the Budget will also feature adjustments to income tax and USC rates, providing much-needed relief to taxpayers. While the exact changes to USC rates are yet to be determined, last year’s Budget saw a reduction in the 4.5% rate to 4%, signaling a trend towards lower tax rates for workers.
Moreover, tax bands are expected to be raised once again, potentially benefiting individuals across different income brackets. Currently, a single person pays 20% tax on income up to €42,000 and 40% on earnings exceeding that threshold. Changes to the Rent Tax Credit, which reduces the amount of Income Tax owed by tenants, are also anticipated, with a potential increase from €750 to €1,000 in the upcoming Budget.
Amidst these tax changes, the government is also considering the impact on the hospitality sector, particularly in relation to the 13.5% VAT rate. Minister Chambers highlighted the challenges faced by businesses in the economy, emphasizing the need for sustainable policy measures that support the competitiveness of various sectors, including hospitality, retail, and small to medium enterprises.
Overall, the government’s commitment to providing tax relief and supporting businesses through Budget 2025 reflects its efforts to stimulate economic growth and ensure the prosperity of individuals and households. The upcoming budget is poised to deliver tangible benefits to taxpayers, with measures aimed at rewarding work, encouraging investment, and fostering innovation across the country.