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22nd Jun 2023

Abolishment of USC tax discussed at the Dáil ahead of this year’s budget

Fiona Frawley

USC tax ireland

The Budget is expected to be announced in October.

Finance Minister Michael McGrath has promised that there will be tax cuts for all workers in Ireland in Budget 2024.

Expected to take place on 10 October of this year, the Fianna Fáil politician made the comments in the Dáil on Thursday (22 June) while being quizzed by People Before Profit’s Richard Boyd Barrett.

The latter brought up a recent opinion poll showing that the majority of people want the “hated” Universal Social Charge (USC) to be abolished. Barrett highlighted that the tax on income was brought in by the Government in 2011 during the economic crisis and was supposed to be a “temporary emergency austerity tax”, adding:

“Despite the emergency being over, record budget surpluses, workers are still being hit with the USC.

“Will you listen to public opinion and abolish this hated charge for those at least earning under €100,000 to give working people a break?”

In response, McGrath said that USC was incorporated into the Irish taxation system to replace the Health and Income Levies.

“Its primary purpose was to widen the tax base and to provide a steady income to the Exchequer to provide funding for public services,” he added.

“It is a more sustainable charge than those it replaced and is applied at a low rate on a wide base, which ensures that it is a stable and sustainable source of revenue for the state.

“It’s also important to note that the USC yield is around €5 billion, projected in fact to be €5.2 billion in the current year.

“If the USC were to be abolished, it would be necessary to generate this yield from alternative sources.”

tax cuts

Richard Boyd Barrett speaking in the Dáil

Following these comments, Barrett accused McGrath of “rewriting history”, reasserting: “[USC] wasn’t put forward at the time on the basis of broadening tax bases or anything like it.

“It was put forward as an emergency tax in response to a crisis created by banks and developers.

“While ordinary workers have lost out because of the USC, net household wealth in this country has dramatically increased. There’s a group of people in this country who are winning from the current crisis.

“Why don’t we pay for the abolishment of the USC by opposing higher taxes on the very very wealthy?”

McGrath then said Barrett had asked about eliminating a tax that brings in €5 billion “without setting out and explaining” what it could be replaced with.

“You might argue, you’ll do that in your pre-Budget submission and of course, I look forward to seeing it,” he added.

It was here that McGrath made the tax cut pledge, stating: “We will honour the commitment we’ve made in the programme for the Government.

“We will be reducing the burden of income tax on all workers, low and middle-income workers, all workers in the country in the Budget.”

He also told Barrett: “That will be done. I look forward to seeing your pre-Budget submission.

“Hopefully, you will support income tax reductions this year.”

This article originally appeared on 

Header image via Getty 


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