Dáil Éireann Debate, Wednesday - 13 July 2022
128. Deputy Ged Nash asked the Minister for Finance the process that led to the increase in the amount under tax measures from the €0.5 billion in the Stability Programme Update to €1.05 billion in the Summer Economic Statement; and if he will make a statement on the matter. [38620/22]
Amharc ar fhreagraGovernment set out its medium-term budgetary strategy in the Summer Economic Statement last year. This incorporated assumed tax packages of €0.5 billion each year.
However, as the Deputy is aware, the economic environment has changed considerably since last year, with inflation now running at the highest level in decades. In recognition of this, Government set out an update to the budgetary strategy in this year's Summer Economic Statement. For next year, the tax package has been increased to €1.05 billion. This is a reflection of the need to adjust the fiscal parameters in light of the current inflationary environment.
While the specifics of tax policy measures to be introduced will be decided during the budgetary process, I have stated previously that a key objective of Budget 2023 will be to ensure that workers do not pay more income tax simply because they have moved into higher tax brackets as a result of inflation.
Finally, I would emphasise that this amendment to the budgetary strategy is a once-off change for 2023 only. After next year, my Department expects inflation to moderate over the medium-term. On this basis, for future years the strategy remains unchanged, with tax packages of €0.5 billion incorporated per annum.
