There will be minimal changes to income tax in the 2022 budget, while the price of alcohol is unlikely to be hit despite ministers struggling to find other ways to raise money in a context of increasing pressure on public funds.
Expenditure Minister Michael McGrath and Finance Minister Paschal Donohoe this week began a series of bilateral meetings with other ministers, who present their wish lists ahead of Budget Day on October 12.
The 4.7 billion euros package will be finalized the following weekend but the room for maneuver is limited with only around 1 billion euros available for new spending that has not yet been incurred and 500 million euros available for new tax measures.
Almost half of a billion euros could be absorbed by increases and changes in social assistance, while there is pressure to use much of the remaining funds to fight the skyrocketing lists of people. waiting in all health services.
While no final decisions have been made on the price of cigarettes and alcohol, sources said the government is keenly aware of the pressure on pubs and restaurants during the pandemic, there is no therefore had no desire to add to it by increasing the cost of alcohol.
However, sources said it was becoming increasingly difficult to find a way to stay within the available envelope given the increasing pressures and demands on the treasury.
There have been discussions about what revenue-raising measures the government could introduce, but officials believe there are very few that could be introduced without creating political difficulties.
The government is also keen to focus on adopting the planned increase in carbon taxes.
The revenue from these increases will likely fund any increase in fuel allowance or any change in eligibility.
In terms of personal taxation, there will be little change as the focus will be on indexation brackets, a measure that will absorb a large part of the 500 million euros available.
Speaking in Washington DC on Tuesday, tánaist Leo Varadkar confirmed that most of the funds earmarked for tax measures will be used to offset the impact of inflation on people’s take-home pay.
Mr Varadkar said the budget would be used to promote remote working and this would involve updating the program which provides for workers to pay for utility costs.
“We believe this is going to be a big part of the future and can be particularly beneficial in terms of work-life balance and also have more people living and working in rural Ireland,” he said .