To address the tax differential between the self-employed and those in the PAYE system, Finance Minister Michael Noonan said that he will increase the Earned Income Tax Credit by €400 to €950.
The minister said this will benefit over 147,000 self-employed individuals generating business activity across the country.
Mr Noonan said that employee participation in their company's ownership and profits has been shown to increase competitiveness and support employment and growth.
He also said he intends to to develop a new, SME-focussed, share-based incentive scheme, to be introduced in Budget 2018.
"Such an incentive will require the approval of the European Commission and my officials will commence engagement with the Commission to ensure that the incentive will comply with state aid rules in advance of the next Budget," the Minister stated.
Minister for Social Protection Leo Varadkar later said: "Budget 2017 includes a new deal for up to 380,000 self-employed people who pay PRSI at the S class.
"They will have new benefits extended to them, including treatment benefit such as free eye and dental tests for the first time, and access to the safety-net of State income supports if they have a serious illness or injury that prevents them from working without having to go through a means test. It's all part of the Government's policy of making work pay and encouraging self-employment and entrepreneurship."
The Minister also announced the allocation of an additional €5m to the Revenue Commissioners for the recruitment of 50 additional staff and additional investment in systems and equipment.
Mr Noonan said that he wants to restrict the opportunity for offshore defaulters to use the voluluntary disclosure regime with effect from next May.
A new strict liability criminal offence will be introduced in the Finance Bill to facilitate the prospection of serious cases of offshore evasion, he added.
Revenue is also starting a consultation process that is intended to lead to a fundamental redesign and modernisation of the PAYE system.
The review aims to help employees manage their tax affairs better, as well as reduce contact between employers and Revenue. It will also cut administration costs for both employers and Revenue, improve compliance and provide up to date information for policy makers, Mr Noonan stated.
The Institute of Certified Public Accountants in Ireland gave a broad welcome to the Budget measures, but expressed surprise that promised changes to the treatment of self-employment workers were not delivered upon.
“We have consistently called for an end to the tax discrimination against the self-employed which would encourage increased levels of entrepreneurialism," said David Fitzgerald. "The increase of €400 in the earned income tax credit for the self-employed, while a positive step, is below what had been signaled previously.
"It is important that the Government continues to demonstrate ongoing commitment to end this imbalance."