Income tax not to increase in next budget, says Donohoe

September comprises ‘final piece of the jigsaw’ before a call made about tax collection

Minister for Finance Paschal Donohoe has said there will be no hike in income tax in the forthcoming budget.

Speaking in Dublin on Thursday, Mr Donohoe said “the final piece of the jigsaw” is the September tax returns and he will be in a better position to make an assessment of the country’s finances then.

“But for Budget 2021 in particular, this budget coming up, I’m not planning to go to Government with plans to increase income tax.”

Mr Donohoe said tax receipts have held up well over the pandemic.


“The tax receipts across June, July and August particularly in relation to income tax did show that the combination of having a very broad number of jobs in our country, and a personal tax code that has remained very broad and very fair in that period, has meant that our personal tax receipts are holding up quite well,” Mr Donohoe said.


“In terms of what that says about our economy, it does indicate to me that momentum is building within our economy,” he added.

“This is why decisions in relation to the medium-term plan for public health are so important. But in terms of the impact it’s going to have for Budget 2021 September is always a very significant month in terms of tax receipts and it’s the final piece of the jigsaw before we make a call about what our tax collection is going to be for the year and then the impact it is going to have on the following years budget.”

Mr Donohoe went on to say that “even at this point I will have to see another month’s worth of tax collection to form a view on whether the trend that we are seeing at the moment is one that is sustainable across the year and will carry into next year.”

He said there will be, in a number of years, a deficit that will be the result of “how we’ve had to increase spending as a result of new public health measures. There is no finance minister in the world who can indicate now what that deficit is going to be because that depends on what happens with the pandemic.”

Jennifer Bray

Jennifer Bray

Jennifer Bray is a Political Correspondent with The Irish Times