Dáil Éireann Debate, Tuesday - 17 February 2026
453. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding any research carried out into the cost to the Exchequer of reducing the higher rate of income tax; and if he will make a statement on the matter. [11679/26]
Amharc ar fhreagra454. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding any research carried out into the cost to the Exchequer of amending the income tax brackets that would increase the income threshold before hitting the higher income tax rate; and if he will make a statement on the matter. [11680/26]
Amharc ar fhreagraI propose to take Questions Nos. 453 and 454 together.
The Deputy may wish to note that Revenue produces, on a bi-annual basis, a Pre- and Post-Budget Ready Reckoner. The latest Post-Budget 2026 Ready Reckoner is available on the Revenue Statistics webpage at:
www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.
The Ready Reckoner shows a wide range of detailed information, including the estimated cost to the Exchequer of widening the income tax standard rate bands and reducing the higher rate of income tax. For convenience the table below sets out the first year and full year cost for a sample of proposals referred to by the Deputy.
|
Measure |
First Year (€m) |
Full Year (€m) |
|
1% point decrease in the higher rate of income tax |
€482 |
€567 |
|
€1,000 increase in the income tax standard rate bands |
€232 |
€265 |
It should be noted that these figures are based on 2026 estimates from the Revenue tax forecasting model using latest actual data for the year 2023, adjusted as necessary for income, self-employment, and employment trends in the interim.
My Department publishes regular updates in relation to indexation of the income tax system. In recent years, information on the indexation of tax credits and standard rate bands has been included in the annual Income Tax – Tax Strategy Group paper. Most recently the Budget 2026 Income Tax – Tax Strategy Group paper sets out information relating to indexing the income tax system, including the estimated cost to the Exchequer. In addition, costs are also provided in relation to the adjustment of income tax rates and USC rates and thresholds. The costs used in these publications are based on Revenue Ready Reckoner publications. The Budget 2026 Income Tax - Tax Strategy Group paper is available at https://assets.gov.ie/static/documents/TSG_25-01_Income_Tax.pdf.
