BUDGET 2019 HAS probably been one of the country’s worst kept secrets.
Since August, even the dog in the street has known the key details due to crop up – mainly because the Taoiseach essentially outlined what was on the way.
Here at Fora, we’ll be keeping you up to date with all the key news as it’s announced today, while also providing more detailed analysis of some of the main areas of interest to Irish businesses.
A lot of the additional €3.4 billion worth of spending for 2019 has been committed, but there is about €800 million left over. So ahead of the main event later today, we have compiled some details of what is expected to crop up:
What’s in it for me?
- First of all, to set the scene, let’s clear up any confusion about the news on Friday that an unexpected surge in corporate tax revenues means there’s an extra €1 billion than expected this year. It’s good news, but it will likely be hoovered up to pay for yet another budgetary over-run by the Department of Health.
- We’ll kick off by looking at personal taxes. The entry point for the higher rate of tax increased to €34,550 last year and Taoiseach Leo Varadkar has hinted that he wants to look at band rates again this year.
- Fine Gael has pledged to cut the universal social charge (USC), which was trimmed back by 0.25% in last year’s budget to 4.75%. Another similar cut to bring the rate down to 4.5% is expected today.
- Last year an increase in commercial stamp duty was used to raise money and this year Finance Minister Paschal Donohoe seems to have his eyes set on the hospitality sector’s special VAT rate. The measure was introduced 2011 to help the likes of hotels through the recession, but with the sector raking in record profits, the rate is up for review. Tourism Minister Shane Ross asked for a tailored measure to target large hotels and avoid punishing small hotels, but it’s unclear if his request is feasible.
- Something still a bit up in the air is the carbon tax. Varadkar previously flagged he would it put up, but due to some push back Donohoe might do a double take. It has been priced at €20 per tonne since May 2014 and was expected to increase to €30. If the mooted increase goes ahead, the cost of petrol, diesel, heating fuel and solid fuel will rise.
- Like last year, housing is probably the biggest item on the agenda. This year, a granny flat grant of €15,000 is expected to incentivise older people to convert part of their homes into rental accommodation.
- The spike in residential blocks being sold to global property funds means the State could opt to increase stamp duty on the sale of these units as a way to boost State coffers.
- Another possibility is county councils will get new powers to build social housing, while it has been suggested the government may come up with another ‘help to buy’ type of scheme in order to help first-time buyers with saving for a deposit.
- And finally on housing, there might be an announcement on changes to property tax. It’s definitely on the horizon, but Donohoe may choose to announce it post-budget.
- Focusing at what might affect businesses, we’re nearly certain firms will be paying more into the National Training Fund next year, with the levy due to rise from 0.8% to 0.9%.
- But more importantly, entrepreneurs are more interested in capital gains tax relief. Startups have said for years that the current €1 million relief is considered way off the €10 million threshold in the UK. There has been little suggestion this will change any time soon.
- And while we’re talking about business owners, a €250 increase to the earned income credit to €1,400 is expected for the self-employed.
- Lastly, increases to cigarettes and alcohol are expected again, while a hike in the gambling tax is on the cards, which could double to 2%.
When is it and how can I find out more?
If you want to follow every step of Budget 2019, there are a number of ways you can keep up to date with the coverage.
Donohoe will start his speech at 1pm, in which he will outline the government’s budgetary policies.
For the second year running, Donohoe will solely deliver the budgetary policies in the Dáil tomorrow since the finance and public expenditure roles were merged. During previous budgets, Donohoe followed up his predecessor Michael Noonan’s speech to talk about the spending side of the equation.
From the moment Donohoe takes to the Dáil floor to address the house, you can follow our rolling coverage of the event. We will have live updates from Donohoe’s speech and analysis of how these new policies will shape Ireland’s business scene.
If you want to hang on his every word, you can tune in to hear Donohoe’s speech live from the floor of Leinster House on Oireachtas TV. State broadcaster RTÉ One will also be airing the speech as it happens.
And if you want to examine the new policies in detail, you can use the government’s tool that will have the full text of Donohoe’s speech. The site will also publish detailed information about all the new policies being introduced.