11th October 2023
The INTO acknowledges that a number of measures announced in Budget 2024 will benefit workers and households across the country.
Direct taxation
INTO members stand to gain from the following measures:
- Income tax standard rate band to be increased by €2,000 to €42,000 with proportionate increases for single person child carers, married couples and civil partners.
- The Personal Tax Credit, Employee Tax Credit and Earned Income Credit will all be increased from €1,775 to €1,875.
- Increases in various tax credits including the Home Carer Tax Credit (increased from €1,700 to €1,800), Single Person Child Carer Tax Credit (increased from €1,650 to €1,750) and Incapacitated Child Tax Credit (increased from €3,300 to €3,500).
- Rent Tax Credit increased from €500 to €750 per year. The credit will also be extended to parents paying rent on behalf of student children in certain tenancies backdated to the 2022 tax year and retained for current and future years.
- Various amendments to the USC including an increase in the 2% USC rate band from €22,920 to €25,760, reduction in the 4.5% USC rate band to 4% and reduced USC rates for medical card holders extended until the end of 2025.
- Mortgage interest relief of up to €1,250 introduced for the 2023 tax year in respect of increased interest paid on a primary dwelling mortgage relative to 2022 interest paid.
There will also be a 0.1% increase in all rates of PRSI from October 2024.
Other measures
- €450 energy credit, to be paid in 3 instalments of €150;
- Temporary 9% VAT rate currently applicable to supplies of gas and electricity extended for an additional 12 months;
- VRT relief for battery electric vehicles is being extended to the end of 2025;
- Fuel excise increases which were due to come into effect on 31 October 2023 to be deferred until 2024;
- Cost of childcare cut by 25% on average;
- The National Childcare Scheme (NCS) subsidy is increasing from €1.40 per hour to €2.14 per hour from next September, which is an increase of 74c.
Reacting to government’s taxation package INTO Deputy General Secretary Deirdre O’Connor said:
The INTO supports the key finding of the 2022 report of the Commission on Taxation and Welfare – that government revenue as a share of national income must rise if Ireland is to meet the challenges of demographic and climate change in the years ahead. Tax cuts that primarily benefit the better off risk fuelling further inflation, narrow the tax base, and run counter to the absolute need for government revenue as a share of national income to increase so that all of the needs of citizens are catered for.
Crucially, we believe that some of the tax cuts proposed by government will make it even more difficult to meet pre-existing and future challenges and will be pro-cyclical and inflationary. In the context of government’s abject failure to address structural problems in primary education in Budget 2024, the INTO believes that a number of regressive tax measures introduced in the budget will make it even harder to address major challenges in primary and special education in the years ahead.
Cutting income taxes rather than tackling the acute shortage of public servants including teachers is akin to cutting the oxygen supply to the education system. We are short well over 1,000 primary teachers every single day. Our most vulnerable pupils are losing out and our members are left carrying the can. We have provided creative solutions to the Department of Education, which are designed to increase the attractiveness of substitute teaching, teaching in rent pressure areas, special education posts, working on supply panels and indeed teaching in Ireland overall. While they have taken some of our recommendations on board, it appears that most suggestions that would lead to increasing costs for government are off the table. The price of everything seems to matter a lot more than the value. This misguided mentality is going to have to change.