Finance Bill 2025 [Certified Money Bill]: Committee Stage Seanad Éireann — 2025-12-09 ============================================================ Simon Harris (FG), Wicklow I thank the Cathaoirleach for his good wishes. I very much look forward to working with Seanad Éireann in the time ahead. I thank Senator Murphy for the recommendation, which, as he outlined, seeks a report on removing USC from the first €40,000 a person earns. We all know that USC was designed and incorporated into the Irish taxation system in 2011 to replace two other charges, namely the health levy and the income levy. The primary purpose of USC is to widen the tax base and provide a steady income to the Exchequer to provide funding for public services. USC is a more sustainable charge than those it replaced, and it is applied at a lower rate on a wide base. It is important to acknowledge the significant contribution that USC makes in contributing to the many expenditure demands placed on the Exchequer. The USC yield last year was around €5.7 billion, with a yield of around €5.6 billion forecast for 2025. If USC were to be significantly altered, it would be necessary to consider how this yield could be generated from alternative sources. In regard to the Senator's recommendation, Revenue advises that it would be estimated to cost around €1.44 billion in the first year and €1.65 billion on a full-year basis. Not only would this measure be costly, it would also have the effect of further hollowing out the USC base by removing an additional 1.17 million taxpayer units from the charge. It is estimated that 29% of all taxpayer units will not be liable for USC in 2026. This proposal would significantly narrow the tax base, as it would mean that around 2.2 million or 63% of taxpayers would not be liable to pay the USC in 2026. Therefore, this would be a policy choice that would create a fiscal vulnerability and would weaken the original policy intention. We should say - indeed, we have published papers on this in recent days - that Ireland has one of the most progressive personal income tax systems. This plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI. Senators will recall that during the economic crisis, it reached a point where 45% of all income earners were exempt from any income tax and that was clearly, as we saw with the financial crash, unsustainable. It placed an unfair burden on those earners who were contributing to the income tax base and it exposed the vulnerability of the income tax system to economic shocks. I hear the Senator's points on this budget and the decisions that were made in relation to it. We will no doubt debate and have different views on some of them. The Government decided, in its first budget of five, to prioritise a variety of measures on the tax side. The first measure was to extend the renters' tax credit that was due to expire. Sometimes that gets forgotten. It was due to expire. That is worth a bit to quite a few people. It makes a big difference. We have extended that for a number of years. We also made the decision to deliver on a commitment that I know the Senator agrees with, which is the reduction of the VAT rate to 9% for the hospitality sector. I think that is really important. Too many people take full employment, the domestic economy, the hospitality sector and rural Ireland for granted. We also made the decision to reduce VAT on the construction of apartments. I am pleased today, in the context of the Society of Chartered Surveyors of Ireland's report, to see that this is already having objectively a big difference in terms of apartment construction. They estimate that in respect of six categories of apartments, only around two out of the six were viable before the Government made viability changes. They now believe five out of the six categories are viable. As a new Minister for Finance, I want to say that we are determined to deliver on our tax commitments in the programme for Government over the lifetime of this Government. --- Source: Houses of the Oireachtas. Licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). The Official Report is revised after first publication; the fetch timestamp below identifies the version quoted. Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/seanad/2025-12-09/debate/main Retrieved: 2026-08-14T04:54:26+00:00 Sitting date: 2025-12-09