Will government cut USC charges? Public set for major income boosts as Government look to slash controversial tax
In anticipation of Budget 2024, it has come to light that the governing coalition comprising Fine Gael and Fianna Fáil is poised to enact substantial reductions in one of Ireland’s most contentious taxes, offering a significant financial respite to the nation’s citizens.
The tax under scrutiny is the widely criticised Universal Social Charge (USC), initially introduced in 2011 as a means for the government to bolster its finances in the wake of the economic downturn.
Furthermore, as reported by the Business Post, the Universal Social Charge (USC) is poised to undergo its most substantial reduction to date, coupled with an elevation of the income threshold for the higher tax bracket. Preliminary estimates suggest that these measures will result in an estimated fiscal relief of approximately €11 billion.
In addition to this, Tánaiste Micheal Martin confirmed over the weekend that these proposed adjustments to the tax regime are presently “under active consideration” in advance of the forthcoming Budget Day on October 10th.
The reduction of the Universal Social Charge (USC) has garnered strong support from Fianna Fáil ministers, who argue that it would provide greater advantages than the proposed €1,000 tax reductions targeted at middle-income earners.
Concurrently, Fine Gael’s tax policy emphasis has been centred on elevating the standard income tax threshold to exceed €40,000, resulting in a reduction of individuals subject to the highest tax rate.
The Coalition Government has already affirmed its commitment to delivering a comprehensive relief package valued at €6.4 billion in Budget 2024. This package encompasses a €5.25 billion augmentation in government expenditures along with additional tax cuts exceeding €1 billion.
Nonetheless, there appears to be a degree of apprehension among ministers regarding the viability of additional concessions in light of the substantial deficit confronting the Health Service Executive (HSE), which is anticipated to require an estimated €2 billion in funding.
Furthermore, the forthcoming Budget 2024 is expected to encompass several other fiscal measures, including an extension of the free school books initiative, heightened expenditures to facilitate the recruitment of an additional 1,000 new Garda recruits, and the provision of a one-time €200 energy credit.
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