Donohoe announces €1.5bn in tax cuts for Budget 2026 but says figures are based on ‘a no-tariff scenario'
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The Journal
31 minutes ago
- The Journal
Weight-based tax for cars and SUVs considered to offset cost of switching to EVs
A WEIGHT-BASED TAX could be on the cards for SUVs and large cars according to briefings for the government ahead of the Budget. The Tax Strategy Group, an expert advisory panel at the Department of Finance, has said that a new levy would be a way of offsetting the losses from the existing tax bases due to people switching to electric vehicles. It has previously been reported that the electrification of the fleet is costing €1.5 billion per year in lost motor tax, VAT, and petrol and diesel excise receipts. In its annual reports ahead of Budget 2026, which is expected to be announced in October, the tax experts said that as the composition of the vehicle fleet in Ireland changes and the Irish transport network electrifies, 'existing tax bases will be eroded' and a way to plug the hole needs to be found. The tax group cited data from the International Council on Clean Transportation which said the average weight of passenger vehicles in Ireland increased by approximately 28% between 2001 and 2022. Advertisement It said this weight upsurge was 'concerning for several reasons' as the heavier vehicles require greater energy and resource consumption and because there there are claims that a heavier vehicle fleet 'creates further challenges in terms of traffic congestion, road infrastructure degradation, air pollution, road space and road safety'. 'The growth in EV sales will inevitably see a reduction in motor tax, fuel excise and VRT receipts in the years ahead,' the officials siad. 'To maintain Exchequer receipts, tax structures must be amended over time in line with the changing vehicle composition.' It also explored similar schemes in other EU member states such as France, which has introduced the scheme as an additional charge, on top of motor tax, with a cap of €50,000 and an exemption for EVs. France has introduced weight-based taxes for every petrol or diesel car that went over the permitted 1,800 kilogram allowance. This works out to €10 for every additional kilogram. According to the Tax Strategy Group, there is 'scope to replicate' the French tax, as it is designed to be 'minimally distortive while also incorporating desired' environmental objectives. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
Irish Times
2 hours ago
- Irish Times
Some could lose out in means-tested child benefit
The introduction of a second tier, means-tested child benefit payment would involve the replacement of some existing supports and could lead to some lower-income households losing out financially, the Tax Strategy Group (TSG) papers suggest. Marin Wall reports. Staying with the TSG papers, Cliff Taylor tells us that the income tax dilemma faced by the Government in framing October's budget is underlined in the key pre-budget papers, which say that indexing tax bands and credits for inflation would cost over €1 billion. And on the same subject Barry O'Halloran says that boosting betting tax in the budget would raise up to an extra €53 million a year for the State, according to Department of Finance officials, while Michael McAleer informs us that a 1 per cent increase in the higher rates of Vehicle Registration Tax (VRT) is one of the budget options outlined by the TSG papers. The European Union is pushing for any future tariffs on pharmaceutical products sold to the United States to be capped at a blanket 15 per cent rate, in ongoing trade negotiations with US President Donald Trump's administration. READ MORE Pharmaceutical products have emerged as one potential sticking point in intense EU-US negotiations to land a tariff agreement in the next eight days. Jack Power reports from Luxembourg. An Coimisiún Pleanála has given the green light for plans to demolish a Smyth's pub on Haddington Road and replace it with a bar and apartments despite locals' fears of a 'superpub' being developed. Gordon Deegan reports. How will the updated National Development Plan shape Ireland in years to come? Listen | 35:59 October's budget is quickly coming into focus, with the Government publishing a key pre-budget document, the Summer Economic Statement, this week. And Ministers face a string of key decisions about the shape of the package, which will have implications for voters' pockets. Voters have got used to giveaway budgets. But despite budget measures of €9.4 billion being signalled, the benefits to households could be significantly less. Here are the big calls facing the Cabinet from Cliff Taylor. In terms of pay, 2024 was a bumper year for the 21 long-standing bosses of the largest Irish publicly-quoted companies, driven by large bonuses paid by companies that exited the Dublin market and moved their primary listings to New York, writes Joe Brennan in Agenda. Figures compiled by The Irish Times show that their average pay package rose by 31 per cent to €4.36 million last year. The median chief executive compensation package, which gives a better picture of the pay landscape as it eliminates the distorting effects of outliers on the pay scales, rose by 16 per cent to €2.53 million. That's 56 times the median salary in Ireland, of about €45,000. We profile four of the eight finalists in the emerging category for this year's EY Entrepreneur of the Year awards. The finalists will vie to become EY Entrepreneur of the Year at a ceremony later this year. The four are: Alan Doyle of Aerlytix; Eddie Dillon of CreditLogic; Aidan O'Shea and Hilary O'Shea of Otonomee and Caitriona Ryan and Niki Ralph of The Institute of Dermatologists In our Friday column Brooke Masters looks at the issue of Donald Trump, Coca-Cola and cane sugar. Last Wednesday, the US president posted on Truth Social that Coca-Cola had agreed to change the domestic formula of its namesake drink to feature 'REAL Cane Sugar' rather than high-fructose corn syrup. The company patently was not ready. But six days later it finally confirmed it would launch a US cane sugar cola in the autumn. If you'd like to read more about the issues that affect your finances try signing up to On the Money , the weekly newsletter from our personal finance team, which will be issued every Friday to Irish Times subscribers.
Irish Times
3 hours ago
- Irish Times
Civil servant knew a year before Cabinet that Arts Council IT project might need to restart
The Government's chief information officer was aware, well over a year before the issue was raised at Cabinet, that the Arts Council 's botched information technology (IT) project may need to restart. The senior civil servant, who is based in the Department of Public Expenditure , ordered an external review of the IT grants system in early 2024 after learning it could take three more years to finish. That review found that the IT system was not viable, that the project could overrun and that the final system may not even be used by the council. Despite this, the review formed the basis of a 'rescue' plan, in which the council asked the Department of Culture for 'significant investment' to save the project. [ Three firms that shared €4.8m from Arts Council for abandoned IT project named Opens in new window ] In response, the council's parent department sanctioned the council to hire two more senior IT roles in an attempt to save the doomed project. By this point, the project was geared towards overhauling the grants management system for the arts sector and had already cost almost €6 million. READ MORE Government chief information officer Barry Lowry was involved in advising the council throughout the project in his capacity as the main adviser on public service information and communication technology. [ Government to appoint chief information officer Opens in new window ] Mr Lowry was approached by the council in December 2023, as the State agency became increasingly concerned about the then almost four-year-long project that had not produced a functioning IT system. Correspondence between Mr Lowry and the council in December 2023, released under Freedom of Information legislation, shows he was aware the project may need to begin again. 'What you certainly need at this stage is an accurate cost/time to fix or an honest assessment that you would be better starting again,' noted Mr Lowry. He added that 'if, and I hope this is not the case, you are in the start again space', his office had 'grant management solutions' used for the Department of Public Expenditure that should be shown to the council. Mr Lowry was also aware that the state of the project could result in the council taking legal action against at least one contractor. In a meeting with the council in January 2024, Mr Lowry asked to discuss the suggestion that the IT project 'could be delayed by a further three years'. By February, he had ordered Storm, a technology consultancy firm, to conduct a two-week review of the architecture of the council IT project. The Office of the Chief Government Information Officer paid for the review, which was scheduled to cost no more than €50,000. A document prepared by the council said any architectural review should consider if the project was compliant with 'design principles' and value for money. Following the Storm review, the council wrote to the Department of Culture explaining the report showed 'we are at an extremely critical juncture with the project, one which requires making significant investment in ... the short term ... in order to rescue the overall project'. These emails, which were released by the council to the Dáil's Public Accounts Committee , show the arts agency succeeded in getting sanction to hire two new directors of IT. A spokesman for the Department of Public Expenditure said it 'has been very clear on numerous occasions that the focus of the OGCIO [Office of the Chief Government Information Officer] was solely on the technical issues with the project and not on the budgetary implications, which was a matter for the Arts Council and its parent department'. The spokesman said the Storm review ordered by Mr Lowry 'did not examine the project costs or business case, which remained the responsibility of the parent department'. A Department of Public Expenditure spokesman said that the review ordered by Mr Lowry found that the system 'was not irretrievable but would have an associated cost in relation to necessary actions to ensure its capability. At no stage did this review examine the cost of the project, as it focused on technical fitness for purpose.' 'Ultimately, the Arts Council and its board decided to take an alternate approach and in line with DGOU [Digital Government Oversight Unit] processes, it remained proper and correct that the Arts Council took the matter forward through its parent department.'
