Government pledge to 'prioritise band widening over rate reductions' on tax

Low and middle-income earners are set to receive a de facto tax cut in the next budget through a raising of the threshold deciding when they pay higher rates to the State.

Finance Minister Paschal Donohoe confirmed the move yesterday during a speech in which he also confirmed plans to merge the universal social charge with PRSI — putting his party on a potential collision course with Fianna Fáil.

In a speech at the Kennedy summer school in New Ross, Co Wexford, he said he would not return to the “shock and awe” boom-era promises which saw the popular plans of today resulting in the damaging cuts of tomorrow.