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Budget 2024: Expect nothing new; relief measures will be limited

Dublin: Finance Minister Michael McGrath TD unveils fiscal plans today.

Ireland’s financial roadmap for the upcoming year is set to be unveiled today at 1 p.m. by Finance Minister Michael McGrath, TD. The minister has underlined his commitment to alleviating the tax burden, with potential revisions to the Universal Social Charge (USC) and income tax on the agenda. Additionally, expectations are that the standard rate income tax band will be broadened to shield middle-income earners from higher tax rates.

Anticipated changes also extend to the Universal Social Charge, with an official announcement expected regarding the elimination of the 3% USC surcharge for the self-employed.

In a positive development for businesses, the government is poised to reinforce and enhance the Special Assignee Relief Programme (SARP).

While deliberations about increasing PRSI rates are underway, it is assured that relief measures will be introduced to address the mounting cost of living concerns.

Furthermore, the government’s focus on the housing sector will persist, with prospective measures in the pipeline for homeowners, renters, first-time home buyers, and mortgage holders. Nevertheless, with a modest €1.1 billion allocated for tax cuts, the government is tempering expectations, signalling a cautious approach.

Recent reports indicate that significant changes to income tax rates may not be on the horizon. There has been considerable discourse about the potential introduction of a third income tax rate, which is also featured in the government’s consultation paper on the personal tax system review.

Moreover, the government is contemplating augmenting tax credits. In the previous budget, personal tax credits, employee tax credits, income tax credits, and the home care tax credit were each raised by €75, with a €100 increase for the home care tax credit. It is estimated that increasing each credit by €50 this year would amount to a cost of €242 million.

Looking ahead to 2024, there are discussions around securing a higher minimum wage for workers and extending energy bill credits.

The Housing Minister has expressed intentions to explore “efficient and effective” measures to retain landlords in the Irish property market. For renters, the €500 rent credit introduced last year is expected to remain relatively unchanged.

In a departure from some other countries, the Irish budget process lacks a secretive element. The government’s discussions over the past month have been openly shared via the media. Consequently, today’s official announcement may not hold many surprises.

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