Budget 2020 was announced on 8 October 2019. This was Minister Donohoe’s third Budget speech and, as has been the trend in recent years, many of the measures announced were leaked to the media well in advance. It is the last budget that the coalition Government has agreed to support under the Confidence and Supply Agreement. No “across the board” tax cuts were announced given the looming “Brexit cloud”.
The Minister acknowledged that Brexit uncertainty hampered preparation for Budget 2020. His budget speech was littered with references to a possible no-deal Brexit and that it was designed to make Ireland “Brexit ready” (no-deal or otherwise). Time will tell if the Minister has in fact delivered a budget that is “Brexit proof”.
The Government’s commitment to Ireland’s “competitive” 12.5% corporation tax rate was acknowledged and the Minister reiterated that this position will not be changing.
Given the tight budgetary parameters thrown up by a potential “no deal” Brexit, there was little in the way of tax cuts and initiatives in Budget 2020. The focus was on keeping the Irish economy on the correct fiscal path and allocating funds where most required in the event of a no-deal Brexit. Other than Brexit, the focus of many of the Minister’s proposals was the chronic under-supply of housing in the Irish market. The measures announced will be funded from increases in the stamp duty rate applying on the transfer of non-residential property, excise duty on cigarettes/tobacco products and in carbon tax.
The introduction of anti-avoidance measures affecting IREFs and REITs from midnight on 8 October 2019 will have surprised many.
Full details of the budgetary measures will be set out in the Finance Bill, expected to be published on 17 October 2019.