The Minister for Finance, Paschal Donohue, said the Government was looking at the impact on budget plans, of the recent trade agreement between the United States and the European Union.
Budget 2026 comes against the backdrop of 15% tariffs on goods exported to the US with threats of even bigger hikes on pharmaceuticals.
The minister said there was now at least “clarity and certainty” with regard to where Ireland stands, even if these changes in the rules of global trade were not wanted.
Both he and the minister for Public Expenditure and Reform will be engaging with Government and party leaders on the matter.
“Where we stand at the moment in the budgetary process is myself and Minister Jack Chambers have just now completed two days of extensive meetings with stakeholders and representative bodies across the country,” Minister Donohue said.
“We have heard from them their views regarding our future and choices the budget should make.
“This budget will be primarily about how we invest in our country’s future and the decisions that we need to make to support the retention and the creation of jobs when we see so much change taking place around us, and we will be advancing those plans now in the weeks ahead,” he added.
On the question of whether he intends to include a reduction in the hospitality VAT rate from 13.5% to 9% in October’s budget, Minister O’Donohue said the change was a commitment made in the Programme for Government.
He would not be drawn on whether the promised cut will appear in Budget 2026 but it’s likely that the measure will be delayed until next summer.
“So there’s a Programme for Government commitment in relation to this that reflects the contribution that hospitality does make to the length and breadth of Ireland,” he said.
“We have, however, a tax package of 1.5 billion euro. That tax package will not increase in size.
“I believe that is the appropriate level for the economic developments that we are seeing at the moment and for the income growth that we are seeing in Ireland.
“What we will now do is look at the choices that we need to make inside those figures to bring forward an overall balanced budget, and that is what myself and Minister Chambers will be doing at this time,” he added.
