The one big bang measure in the Budget is going to be the reduction in the Universal Social Charge, writes Business Editor David Murphy.

It will affect the largest number of people and it will eat up the bulk of Minister for Finance Michael Noonan’s tax giveaway.

Expect cuts to each of the rates of USC and increases to the point at which people pay the levy.

The smart money suggests that the 7% rate of USC, which is currently applied to income between €17,577 and €70,044, will be reduced by at least 1.5%.

There are also likely to be changes to the lower USC rates of 1.5%, which is currently applied to the first €12,012, and 3.5% which is currently levied on income between €12,013 and €17,576.

The Government is also keen to reduce the marginal rate of tax.

At present the highest rate of tax for the self-employed is 55% (on salaries over €100,000) and it is 52% for PAYE workers on salaries over €70,044.

Bringing that below 50% won’t be completed in one Budget - but the process will begin today.  

Another issue is the anomaly that self-employed and PAYE workers earning the same amounts pay different rates of tax.

Apart from being unfair, there is a concern that this is acting as a disincentive for people to start their own firms.

Again, we can expect the Government to begin to tackle this discrepancy in the Budget.

There will also be a lot of measures to help entrepreneurs.

During the height of the financial crisis Capital Gains Tax, which is paid on the sale of an asset such as a business, soared from 20% to 33%.

According to the employers’ group Ibec, that has made it unattractive to grow businesses in Ireland.

It would seem unlikely that the Government will bring down the headline rate - instead we can expect a special 10% cut in Capital Gains Tax for entrepreneurs in the Budget.

The Government is also certain to take steps to tackle the aftershock of the construction collapse. House building still remains at relatively low levels.

NAMA will be given a role to build 20,000 starter homes as part of a €4bn plan to build on its own land. The project will be funded from its own resources.

And it will develop new homes in Dublin and other urban areas.

The Government is also due to give its response to the recommendation of the Low Pay Commission to increase the minimum wage to €9.15 per hour.

It is expected to announce hiking the Minimum Wage from its existing rate of €8.65 to the new higher level.

The Budget will also contain the introduction of a tax relief for companies engaged in research and development called the Knowledge Development Box.

While that is likely to benefit multinationals there will also be measures in the Budget as part of the OECD’s project to ensure such companies are not exploiting tax loopholes.

The first step is likely to be that the Revenue Commissioners will share information with other tax authorities on large multinationals.

@davidmurphyRTE