The government is hoping to move income tax credits and rate bands in October’s budget for 2023 to improve take home pay and move in line with wage growth within the economy.
Responding to the increase in the cost of living, Finance Minister Paschal Donohoe stated “we simply want to ensure that as much of that increase in overall wages as possible feeds back into the purse and wallet as opposed to it being absorbed into unintentionally higher levels of taxation. That is what we are looking to do”. A personal taxation strategy is being adopted by the Government to ensure earners get a pay rise this year and this rise ends up in their pocket and not absorbed by higher levels of tax.
The previous day the Tánaiste Leo Varadkar mentioned introducing a third 30% rate of income tax to help middle income earners, leaving the higher rate of 40% for higher earners.
With the budget just 4 months away, it appears the cost of living crisis is top of the agenda. Increasing state supports and reducing costs of service, for example, childcare, appears to be the main focus for Budget 2023 this October. It is also understood that it will include a pension and welfare package along with aiming to reduce college fees and hospital charges.
Please note this article is for information purposes and does not constitute advice. Details correct at time of publishing.