Ireland’s government has delivered a bonanza budget for 2025, handing voters several giveaways, thanks to flush coffers boosted by forecast record corporation tax receipts and Apple Inc back taxes.
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(Bloomberg) — Ireland’s government has delivered a bonanza budget for 2025, handing voters several giveaways, thanks to flush coffers boosted by forecast record corporation tax receipts and Apple Inc back taxes.
The tax and spending €10.5 billion ($11.7 billion) allocated includes measures such as double child benefit payments before Christmas, welfare and pension payment increases, energy credits and an increased rent tax credit. The package also includes a €2.2 billion cost-of-living bundle, as well as incentives for scaling Irish businesses.
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Its a budget on an unprecedented scale, and one that will be the envy of other European countries facing deficits, that is only possible thanks to the anticipated almost €38 billion ($42.3 billion) corporate tax intake from the out-sized number of multinationals based in Ireland, including Apple Inc. and Pfizer Inc. Without that boon, the small-island economy would be experiencing a deficit like its European neighbors.
Those receipts were boosted by a recent one-off €14 billion ($15.6 billion) windfall from Apple, of which €8 billion will be received by the exchequer before the end of the year.
That additional cash has been allocated to investing in crumbling infrastructure, such as housing, the energy grid and water system, Finance Minister Jack Chambers clarified Tuesday, saying the exact details will be brought to government for approval in the first quarter of next year. Those are issues that lobbyists for the multinationals based there have long called for, as they impact Ireland’s attractiveness as a foreign direct investment hub.
An AIB Group Plc share sale will also contribute to those infrastructure upgrades, including €1 billion for Irish Water to allow works on capital projects and providing connections for new housing, a further €1.25 billion going to the Land Development Agency and €750 million for the electricity grid.
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The extent of the measures adds to speculation that a general election, which must be held by March 2025, could come sooner rather than later. Prime Minister Simon Harris, just six months in the job, will be counting on the budget to help him build on recent solid poll numbers for his Fine Gael party and cement his lead over main opposition party Sinn Fein, which until recently had been ahead.
Irish central bank chief Gabriel Makhlouf had warned against such giveaways in a pre-budget letter in June, advising the government to stay within its own 5% annual overall spending increase rule.
Other measures included:
- Stamp duty of 15% on bulk buying homes, up from 10%
- Stamp duty of 6% on homes worth more than €1.5 million
- An extension to the help-to-buy scheme to assist first-time buyers
- A new relief for expenses incurred on a first listing on an Irish or European stock exchange, as well as a Stamp Duty exemption subject to State Aid considerations
- Increasing relief available under the Start-Up Relief for Entrepreneurs scheme from €700,000 to €980,000
The levy on banks, meanwhile, has been extended for another year, with a target yield of €200 million, Chambers said while delivering the budget, adding “it remains appropriate that the sector continues to make a contribution to the Irish economy following the support they received during the financial crisis.”
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