What the Government’s €7 billion plan means for …. the Economy

The Stimulus is the next stage in Ireland’s response to the COVID-19 crisis and will help get Ireland’s businesses back on their feet and get as many people as possible back to work quickly.

What’s in the plan . . .for the economy

Taoiseach announces €5.2bn economic package, with VAT cut from 23pc to 21pc and help-to-buy scheme expanded
  • VAT will be cut from 23pc to 21pc
  • Stay and Spend initiative to see holidaymakers and diners spend up to €625 to claim back maximum €125 tax rebate
  • Help to Buy scheme for first time buyers to be increased from €20,000 to €30,000
  • Employment Wage Support Scheme will succeed the Temporary Wage Subsidy Scheme and run until April 2021

As flagged yesterday, spending on non-alcoholic beverages, food or accommodation of up to € 625 will be rewarded with a tax credit of €125. The Taoiseach said the level of spending to begin the tax payback would be just €25, and it will be administered via an app.

There will be €10 million provided in a restart fund for the tourism sector and a €10 million performance support scheme for the culture sector to assist in planning for events during Covid-19.

One of the major unflagged points is a new scheme that will allow firms that were previously profitable carry back trading losses early, leading to an immediate refund of some or all of their corporation tax.

A new income tax relief will also be introduced for the self-employed who were profitable in 2019 but are now facing Covid-related losses.

There will be a six month reduction in the standard rate of VAT, from 23 per cent to 21 per cent, effective from the beginning of September, at a cost of €440 million. This is a major effort to stimulate spending, and one of the most significant parts of the package.

There will be investments in Covid-specific life sciences products to the tune of €25 million, and €10 million is going to be made available through the first phase of a Green Enterprise fund.

Further information on the plan is outlined in the document below.

July Jobs Stimulus Plan Document 

Department of Business, Enterprise and Innovation Job Stimulus Package Details