Time for next years budget, Finance Minister Paschal Donohoe will present the new budget for 2021

On Tuesday, Finance Minister Paschal Donohoe will present the new budget for 2021.

The government is now forecasting a deficit of 21 billion euros or 6% of national revenue this year.

During last year’s budget announcement, the finance minister said the country’s economic situation should be kept in mind due to the possibility of a non-deal breakthrough.

But the new budget comes after an year amidst pressure from the Covid epidemic.

The new budget will be tailored to the long-term economic situation of the country due to Covid restrictions and to provide support to those who have lost their jobs due to Covid.

In October, it was reported that Ireland had a deficit of about 4 9.4 billion by 2020, up from the end of September. Ireland, meanwhile, had a surplus of 38 million euros over the same period last year.

Donohoe said this time around there will be a very large deficit compared to the previous year.

What to expect from the budget?

The budget will include details of a recovery fund, mainly to deal with the current Covid impact.

In addition to Brexit and Covid, health, housing and climate change will also be important in the budget.

The government expects additional costs of up to 9 billion next year for Covid. Public Expenditure Minister Michael McGrath presented a memo on spending strategy in the Cabinet ahead of the budget last week.

His proposal was to spend about 900 million euros in addition to the current one billion euros to meet existing services in all sectors.

He added that this would increase capital expenditure by one billion euros in the next financial year. The budget will also decide on the utilization of the Rainy Day Fund, which can be used in emergencies.

Income tax

Minister Donohoe says there will be no increase in income tax in the 2021 budget.

The program for the government will not increase the Universal Social Charge (USC) either, but there may be some changes in the bands.

At the same time, the hospitality sector had demanded more concessions on VAT in connection with the epidemic.

Although the government has withdrawn from this in recent times, perhaps the delegates have put considerable pressure on the budget to get it approved.

Social welfare

In the wake of the Covid epidemic, the government has made unprecedented spending on health and social welfare. There may be other big announcements for the Covid defense in Tuesday’s budget.

Covid may also announce additional support in the budget for those working in the worst-affected areas.

The government is also under pressure to help many people in the areas of hospitality, tourism, entertainment and the arts.

Brexit

The Budget may also announce further assistance to the worst-affected areas of the No Deal Brexit.

There will also be more announcements about stimulus loans and grant schemes.