Budget 2025: Tax cuts, vape tax and free school books likely in budget as negotiations continue
The Irish Mirror understands that a tax on vaping products is “very likely” with final considerations now being given to how and when the charge will be introduced.
Bumper tax cuts that will see USC slashed and the entry rate for the higher rate of tax increase will be unveiled as part of the Government’s final budget.
The Irish Mirror understands that a tax on vaping products is “very likely” with final considerations now being given to how and when the charge will be introduced.
As Finance Minister Jack Chambers announced that the Government is expecting to record a whopper €25 billion surplus for 2024, he and Public Expenditure Minister Paschal Donohoe were still insisting on Friday night that the cost of living package will not be on the same scale as previous budgets.
READ MORE: Budget 2025: Entry rate for 40 per cent tax to increase by €2,000
READ MORE: Labour's alternative budget calls for energy credits, tax changes and relief on gym membership
Budget 2025 talks are set to continue into the weekend with large aspects of next Tuesday’s budget expected not to be complete until Monday evening.
The tax package that will be unveiled by Finance Minister Jack Chambers as part of Budget 2025 is practically decided, with work on tax credits to continue into the weekend.
The Irish Mirror understands that the Fianna Fáil TD has proposed to the coalition leaders that the rate at which people pay the 40 per cent rate of tax should be increased from €42,000 to €44,000.
It is also understood that he has proposed cutting the four per cent rate of Universal Social Charge (USC) by one per cent to three per cent on all earnings between €25,000 and €70,000.
This is a larger cut than expected, with many previously suggesting that it was likely that last year’s 0.5 per cent cut would be repeated.
A tax on vapes and e-cigarettes is now considered “very likely”, with work now underway on how the tax would be started and how quickly it can be implemented. The Irish Mirror understands that there is a desire to introduce the tax from January 1 2025.
At a press conference on Friday evening, Mr Chambers would not commit to the tax being introduced but stated it was his “intention to try and advance that” and there has been “intensive work ongoing” between the Department of Finance and Revenue.
Mr Chambers confirmed that Ireland will record estimated surpluses of €25 billion in 2024 and €12 billion in 2025.
The large surplus for this year is due to the fact that the European Court of Justice’s decision on the €14 billion Apple tax windfall must be recorded in 2024’s accounts. This is despite the money being delivered in “tranches” and just €8 billion delivered this year.
Mr Chambers said the “wider strategic direction” of what the Apple tax money will be spent on will be laid out on budget day.
The Finance Minister and Minister Donohoe said that the cost of living package is still being examined but acknowledged that it will not be as large as in previous years due to falling inflation.
Multiple sources told the Irish Mirror that a double Child Benefit payment at Christmas is considered very likely.
The cost of living package will also contain energy credits between €150 and €250, but the number of credits and their amount are still under consideration.
Green Party leader Roderic O’Gorman had called for a “baby boost” payment that would see parents receive €560 in the first month of their child’s life.
It is understood that this is still under negotiation but is growing more unlikely, with one Government source stating that Mr O’Gorman will have to “push for it” and it “might not happen”.
There is “good confidence” that Education Minister Norma Foley will secure free school books for senior secondary school students in 4th, 5th and 6th year. This would mean all school books for all children will be free.
The renters’ tax credit is expected to increase by €250 to €1,000.
The social welfare package is expected not to be agreed upon until late on Monday evening. Social Protection Minister Heather Humphreys has previously said that she did not believe the welfare rates of those who are long-term unemployed should rise at a time of full employment. Pay-related social benefit, which links a person’s welfare rate to their previous earnings, will come into force next year.
While Tánaiste Micheál Martin pushed back against this idea earlier this week, it is understood that this is still Ms Humphreys’ position.
It is understood that she would be willing to compromise, but that she does not believe the social welfare increase should be as large as the pension increase. It is expected she will seek a €15 increase for the pension. It is also understood, however, that a €12 increase in line with the last two years could be more likely.
It is also understood that funding will be allocated for the recruitment of hundreds of new Defence Forces recruits.
The Irish Mirror understands that Higher Education Minister Patrick O’Donovan will announce a 15 per cent uplift across the board on SUSI grants and all bands will get expanded.
The reckonable household income threshold for the 100 per cent student contribution grant with no maintenance payment will increase from €55,924 to €64,312.60.
It is understood that Justice Minister Helen McEntee has negotiated investment that will be targeted at tackling domestic, sexual and gender-based violence, expanding prison capacity, speeding up the processing of international protection cases.
It is expected these areas will all receive significant increases on Budget Day.
It is also understood Gardaí recruitment and public order equipment are being examined as part of the justice budget. There will be funding for between 800 and 1,000 new Gardaí and the Garda training allowance will rise to €354.
Join the Irish Mirror’s breaking news service on WhatsApp. Click this link to receive breaking news and the latest headlines direct to your phone. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don’t like our community, you can check out any time you like. If you’re curious, you can read our Privacy Notice.
Related
Share this page
Guest Posts by Easy Branches
