Irish budget: Finance minister unveils tax 'giveaways'

2 months ago 14

By Shane Harrison
BBC News Dublin Correspondent

Paschal DonohoeImage source, PA Media

Image caption,

Paschal Donohoe says the Republic of Ireland has a large budget surplus

The Irish finance minister has unveiled one of the biggest giveaway budgets in the country's history.

Paschal Donohoe told the Dáil (Irish parliament) that he was in a position to do so because the country had a large budget surplus.

Most of that comes from a huge increased tax-take from corporations, particularly a small number of American tech companies.

Some of that income is to go towards a "rainy day" national reserve fund.

Mr Donohoe announced an income tax package to the value of more than €1.1bn (£963m).

Unlike the UK, Ireland is not borrowing to fund tax cuts.

Image source, PA Media

Image caption,

People will now start paying the higher 40% rate of tax on income over €40,000

The minister said his budget was focused on helping families and businesses facing the cost-of-living crisis arising from after effects of the Covid-19 pandemic and the Russian invasion of Ukraine.

People will now start paying the higher 40% rate of tax on income over €40,000 (£35,731).

Tax credits will be given to home owners for fuel and tax on petrol and diesel at the pump will remain unchanged.

A packet of 20 cigarettes will go up by 50 cents (45p).

Mr Donohoe also announced that VAT on newspapers would be reduced from 9% to 0%.

He said there were many risks to the country's finances but he concluded: "We can and should be confident about our future."

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