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5h ago

Irish Government Finalises €10 Billion Budget With VAT Cuts as Tax Bands Frozen

The plan shifts relief toward sector supports, a move critics say favors businesses over workers.

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Paschal Donohoe and Jack Chambers, right, are putting the final touches on the budget

Overview

  • Paschal Donohoe confirmed income tax bands will stay unchanged for 2026, increasing fiscal drag as wages rise.
  • Government sources say the tax package will prioritize cutting VAT for hospitality to 9% and reducing VAT on new apartment sales.
  • The lower 9% VAT rate on gas and electricity will be extended, according to coalition figures involved in the talks.
  • Paschal Donohoe and Jack Chambers are completing a package worth about €10 billion in new spending and tax measures for Tuesday’s announcement.
  • A minimum wage increase is expected following the Low Pay Commission’s recommendation, while sources indicate the renter’s tax credit may remain at €1,000.