Ireland's Smart Budget: Cutting Taxes to Attract Investment

Ireland unveiled its latest budget on Tuesday, aiming to trim business taxes and boost foreign investment by leveraging its robust public finances. With a thriving corporate tax boom, Dublin has the latitude to simultaneously cut taxes and increase spending, but ministers call for fiscal discipline for future budgets.

The budget outlines a 6.2% hike in day-to-day spending by 2026 and plans to strengthen public services, with a focus on countering U.S. trade policy exposure. The government has resisted across-the-board tax indexation, opting instead for VAT and tax reductions for businesses like food services and apartment construction.

Highlighting a key strategic move, the tax credit for research and development has been increased to 35% from 30%, aligning with foreign multinational representatives' calls. The government aims to attract new investment projects, while a tax cut on investment funds to 38% from 41% seeks to simplify the retail investment framework next year.

(With inputs from agencies.)