Seán Haughey
Ceist:103. Deputy Seán Haughey asked the Minister for Finance his plans for a substantial income tax package in budget 2025; and if he will make a statement on the matter. [22682/24]
Amharc ar fhreagraTuesday, 21 May 2024
Ceisteanna (103)
Freagraí scríofa
The Programme for Government (PfG), “Our Shared Future” contains a number of specific commitments relating to income tax. These include the commitment that, “from Budget 2022 onwards, in the event that incomes are again rising as the economy recovers, credits and bands will be index linked to earnings. This will be done to prevent an increase in the real burden of income tax, to prevent more low income workers being taken into the tax net because of no changes to the tax system and to ensure there is no increase in the number of people having to pay higher income tax and USC rates.” In addition, the PfG states that “the Earned Income Tax Credit will be equalised with the employee tax credit”. It also includes a commitment to increase the Home Carer Tax Credit to support stay-at-home parents and those with caring responsibilities.
Significant progress has been made in achieving these commitments. For example, over the last three Budgets the Government increased the Standard Rate Cut-Off Point for single persons by 19 per cent from €35,300 to €42,000, with commensurate increases for persons who are married/in civil partnerships. In addition, the main tax credits - personal tax credits, employee tax credit and earned income credit - were increased by around 13.6 per cent or €225 each from €1,650 to €1,875. The Home Carer Tax Credit was increased by €100 from €1,700 to €1,800 (a 5.9 per cent increase) in Budget 2024. It is also worth noting that the earned income tax credit was equalised with the employee tax credit in 2021.
As Ireland’s fiscal position is heavily reliant on volatile ‘windfall’ corporation tax receipts, it is important that a balanced and sustainable fiscal policy continues to be pursued. Government will set out the fiscal parameters for Budget 2025 in the Summer Economic Statement in the coming months. These parameters, and the commitments outlined in the PfG, will inform my decisions in regard to the make-up of the Budget 2025 income tax package.