Urgent Update: Budget 2026 Unveiling in Weeks with Key Changes

URGENT UPDATE: Just weeks away from the unveiling of the Budget 2026, the government is setting the stage for significant financial changes. Scheduled for October 2023, expectations are tempered as officials warn of uncertain economic conditions, particularly with a looming 15% tariff from the US.

The proposed budget package amounts to €9.4 billion, consisting of €1.5 billion in tax cuts and €7.9 billion in spending, marking a 7.3% increase over the last year. Despite the challenging economic forecasts, Taoiseach Micheál Martin remains optimistic about the budget’s foundation, indicating that the numbers are likely to remain stable as the date approaches.

With the countdown on, several key measures are already making headlines. Notably, past one-off payments—like the energy credit and double child benefit—are off the table, as Finance Minister Paschal Donohoe emphasizes a shift toward more permanent solutions for financial aid.

Families can expect a proposed change to the child benefit system, with Martin confirming a second-tier structure is in the works. However, specific details remain under discussion. The government’s focus this year is on job creation and infrastructure development, rather than the significant income tax reductions seen last year.

The hospitality sector is also set for changes, as officials plan to revert the VAT rate for restaurants and cafes back to 9% from 13.5%. This move aims to ease the financial burden on this vital industry but will significantly impact the overall tax package.

Social welfare recipients should brace for a more modest increase, with expectations of a €10 hike in weekly payments, down from last year’s €12 boost. The government’s cautious approach indicates that this budget will not mirror the generosity of previous years.

Additionally, the Rent Tax Credit is anticipated to rise, with discussions hinting at a potential increase to €2,000 per person, as part of ongoing efforts to support tenants amid rising living costs. The government has committed to progressively uplifting this credit in line with evolving housing regulations.

In a move to address health concerns, Budget 2026 will also introduce a tax on e-cigarettes, doubling the price on refill cartridges to €5 and adding a €1 duty on disposable vapes. This initiative is part of a wider strategy to regulate smoking and vaping products.

As the government prepares for Budget Day, officials emphasize the importance of aligning fiscal policies with the realities of the current economic landscape. With public sentiments on the rise regarding the cost of living, the upcoming budget is expected to have a profound impact on families and businesses alike.

Stay tuned for more updates as we get closer to the budget announcement!