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Budget 2026 will see €9.4bn package of tax reductions and spending

/ 22nd July 2025 /
Cormac Cahill

The Government has signalled plans for €1.5bn in tax reductions as part of Budget 2026, according to the recently published Summer Economic Statement.

A total spending increase of €7.9bn is proposed — representing a 7.3% rise on 2025 figures — bringing the overall Budget package to €9.4bn when tax and spending measures are combined.

The Statement notes that while these plans are based on current economic projections, there is a caveat: should global trade conditions deteriorate, the Government is prepared to adjust its fiscal approach and reduce the overall size of the Budget.

Of the €7.9bn increase in spending, €5.9bn will go toward current expenditure — largely to support essential public services and accommodate demographic growth — while €2bn is earmarked for capital projects.

This additional funding will be directed toward social welfare supports, healthcare investment, and the expansion of public service staffing levels.

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Overall public expenditure for 2026 is projected to reach €116.6bn, comprising €97.5bn in current spending and €19.1bn in capital investment.

While the national budget remains in surplus, the Statement cautions that this is primarily driven by a small number of large corporate taxpayers, highlighting the need for prudent fiscal management.

Budget 2026
package
A total spending increase of €7.9bn is proposed — representing a 7.3% rise on 2025 figures — bringing the overall Budget package to €9.4bn when tax and spending measures are combined. Photo: Leah Farrell/© RollingNews.ie

Looking ahead, the Government emphasises the economic challenges posed by an ageing population, the transition away from fossil fuels, and the digital transformation — all of which will have far-reaching effects on the Irish economy.

In response, the State plans to maintain a budget surplus where possible and continue contributing to both the Future Ireland Fund and the Infrastructure, Climate and Nature Fund to safeguard long-term stability and sustainability.

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