Paul Lawless (Mayo, Aontú)
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32. To ask the Minister for Finance if, in light of the skill shortage in the construction, hospitality, education and healthcare sectors, his Department will consider introducing a tax credit for overtime. [17168/25]

Paul Lawless (Mayo, Aontú)
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46. To ask the Minister for Finance if in light of the skills shortage in the construction sector, hospitality sector, education sector and healthcare sector, he will consider introducing a tax credit for overtime. [21003/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 32 and 46 together.

It is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation.

Ireland has a progressive income tax system which is structured such that the more income you earn, the more tax you pay. As a person’s income increases, they move up through the various rates and bands and, as a result, while the levels of take-home pay increase overall, the amount of tax they pay also increases.

However, to ease the burden facing average and middle-income earners, over successive Budgets the previous Government substantially increased the entry point to the higher rate of income tax for all earners by €8,700 or c. 25 per cent over the last four budgets. In addition, the main tax credits have also been increased by €350, or c. 21 per cent, over this period. Furthermore, in line with Government policy of ensuring full-time workers on the minimum wage remain outside the charge to the top rates of USC the ceiling of the 2 per cent USC rate band was increased by €6,898, or 34 per cent, from 2020 to 2025. Budgets 2024 and 2025 also cumulatively reduced the 4.5 per cent rate of USC to 3 per cent.

I have no current plans to introduce a tax credit for overtime. As the Deputy will be aware, tax credits and reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system more difficult. While I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones, as you will appreciate, I must be mindful of the public finances and the many demands on the Exchequer.