62. Deputy Joe Neville asked the Tánaiste and Minister for Finance if he plans to review the current tax bands in Budget 2027; and if he will make a statement on the matter. [48237/26]

The ‘Programme for Government 2025: Securing Ireland’s Future’, contains specific undertakings with regard to personal income taxation. It commits to “implementing progressive changes in taxation if the economy remains strong, including indexing credits and bands to prevent an increase in the real burden of Income Tax while in the event of an economic downturn and unexpected deterioration in the public finances we would postpone changes to Income Tax credits or bands, as we did in Budget 2021”.

As the Deputy will be aware, to ease the burden facing average and middle-income earners, over successive Budgets the previous Government substantially increased the entry point to the higher rate of income tax for all earners by €8,700 or c. 25 per cent. The main tax credits have also been increased by €350, or c. 21 per cent. In line with the Government policy of ensuring full-time workers on the minimum wage remain outside the charge to the top rates of USC the ceiling of the 2 per cent USC rate band was increased by €6,898, or 34 per cent, from 2020 to 2025. Budgets 2024 and 2025 also cumulatively reduced the 4.5 per cent rate of USC to 3 per cent.

Broadly, the income tax measures implemented over the period of the last Government are expected to be in line with wage growth.

Budget 2026 was the first of five Budgets to be delivered by this Government, and the Government remains committed and will stand by the Programme for Government commitment to make progressive changes to personal income tax, if the economy remains strong.

My Department publishes regular updates in relation to indexation of the income tax system. In recent years, information on the indexation of standard rate bands and tax credits has been included in the annual Income Tax – Tax Strategy Group paper. The forthcoming Budget 2027 Income Tax - Tax Strategy Group paper will also set out information relating to the adjustment of income tax standard rate band, including the estimated costs to the Exchequer. In addition, costs are also provided in relation to the changes to income tax standard rate bands, credits and rates and USC rates and thresholds. The costs used in these publications are based on Revenue Ready Reckoner publications.

Finally, as the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances.