One-off measures might be worth paying closer attention to as modest budget package leaves little room for major tax reform
With just €1.1 billion of the amount being set aside for tax cuts – down slightly in fact from the €1.13 billion set aside last year – there isn’t scope for any major changes on the tax front. “There is very, very little to play with here,” says O’Donoghue.
“I think it’ll be very much focused on ensuring that individuals aren’t impacted by fiscal drag, and pushed into a higher bracket just because of wage inflation,” says O’Donoghue. There will likely also be an increase in the minimum wage – a 12 per cent increase has been proposed by the Low Pay Commission but employers are lobbying hard against an increase of that scale. Any increase in minimum wage could trigger tweaks to PRSI/USC, so that workers get to keep the benefit of the increase.According to Revenue calculations, a one percentage point cut in the 4.
“More and more, it’s average people who can be caught by inheritance tax; it’s not just the super wealthy,” she says.The last time the parent-to-child threshold was changed was back in 2019, when it was increased from €320,000 to €335,000. The group B threshold, for close blood relatives, was last changed in 2016, as was the group C, so-called “stranger” threshold.
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