The annual Tax Strategy Group papers scoping out tax possibilities for the upcoming Budget 2020, which has been confirmed for Tuesday 8 October, were released last month. While the papers list out issues to be considered in the budgetary process, they are recommendations to inform the lawmakers rather than actual decisions. Most noteworthy is a paper suggesting increasing the minimum self-employed contribution for PRSI from €500 to €3,500 per annum over the next three years. Other recommendations include:

• Increasing the standard rate band for income tax from €35,300 to €50,000 would cost €2.3 billion if implemented in a single year. In 2018, the Minister for Finance committed to raising the standard rate band to this level over 5 years;
• increasing the earned income tax credit for self-employed to €1,650 in Budget 2020 or splitting the increase over two years;
• phased increase of the PRSI contribution rate by employees by 0.25-0.5 percent per annum over 5 to 10 years;
• raising the threshold for the higher 4.5 percent rate of USC to ease the tax burden on middle-income earners;
• not merging PRSI and USC given the complexity and possible loss of Revenue to the State.

The group also suggested that additional carbon tax revenues should be ring-fenced for the purposes of enhancing the current grant scheme for household energy efficiency improvements and to fund sustainable transport infrastructure. Income tax credits could also be made available to those who retrofit their homes for energy efficiency. Also where parties fail to attend a Case Management Conference before a hearing in front of the Tax Appeals Commission, the group recommend the appeal should be considered to be withdrawn. No recommendations were made in terms of tax reliefs for SMEs but reference was made to the public consultation process that has just completed.