Michael McGrath: No decision made on future of universal social charge

Finance Minister Michael McGrath said his party would also lay out a tax package before the next election.  File Picture: PA 

No decision has been made on future changes to the universal social charge (USC), the Finance Minister has said.

Abolishing the tax had been a Fine Gael election promise in 2016, but was never fulfilled. 

Reports in recent days have suggested that Taoiseach Simon Harris could pursue the abolition of the austerity-era tax as part of a five-year Fine Gael tax plan, which he has tasked Public Expenditure Minister Paschal Donohoe and Junior Minister Neale Richmond with working on. 

Mr Harris said earlier this week that his priorities for a tax plan in October's Budget were reducing USC for middle and low-income earners and improving the rate at which people enter the higher rate of tax.

At Government Buildings, Michael McGrath said that it was not surprising to see political parties outlining their priorities for Budget 2025.

"Every political party is going to have a set of tax proposals in the lead-up to the general election. But that is still some time away. My focus in my role as Minister of Finance is preparing Budget 2025.

"This morning, I met my tax team in the department to go through all the different areas and the different priorities that I have, that I will be bringing to government over the months ahead in terms of what we can do in Budget 2025. 

"On the USC specifically, in the last Budget, we had the first rate cut in USC for five years, and we significantly expanded the lower rate band as well.

"But how much we can do in the budget 2025 is to be discussed and to be negotiated. 

"The emphasis will be on the expenditure and investment in public services ... but there will be a tax package but it's all to be negotiated and agreed."

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Mr McGrath said that his party would also be laying out a tax package before the next election. 

However, Mr Richmond said at the same event that Fine Gael has "nothing written down" as yet.

"Fine Gael will set out an election manifesto, just like the Greens, just like Fianna Fáil and everything will be contained in that. Let's not get ahead of ourselves with announcements," Mr Richmond said.