The Government will unveil a "pro-investment" Budget this afternoon with limited benefits for middle income workers.
It has set parameters for a planned package of €9.4 billion in Budget 2026, including €7.9bn in additional public spending and €1.5bn envelope for tax measures.
Minister for Finance Paschal Donohoe has said there will be no changes to personal taxes, adding that indexation would have taken up the majority of overall the tax package.
It is expected, however, that the Government will move to cut VAT for food-led hospitality from 13.5% to 9%, after a long-running campaign for a sector which has sought to highlight a rising cost of business.
Businesses say the proposal, which will exclude accommodation and is expected to kick in in July rather than January, is necessary to protect jobs.
The Government is also expected to announce a VAT cut for new-build apartments in an effort to drive delivery of housing and is expected to cost €250m.
There will be a €10 increase in the State Pension and social welfare rates.
Working families will get access to fuel allowance and the Child Support Payment for under 12s will increase by €8 and by €16 children aged over 12.
There will be 860 additional special education teachers and 1,700 new special needs assistants.
The Basic Income for artists of €325 per week which has operated on a pilot basis will become a permanent scheme.
For businesses there will be an increase in the tax credit for Research and Development.
There will also be more funding for Tourism Ireland to market direct flights to Ireland.
Fáilte Ireland will get an expanded remit for food business following the State body's move to the Department of Enterprise.
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Continuing the renters tax credit at its current level of €1,000 for an individual and €2,000 for a jointly assessed couple will cost €350m.
Rolling over the reduced cost of 9% VAT for gas and electricity customers is expected to be €254m.
Mortgage interest relief, which has benefitted more than 60,000 householders, will be extended for another year before being gradually phased out in 2027.
The minimum wage is also expected to increase from 1 January.
It follows a recommendation by the Low Pay Commission, which is made up of representatives of employers and trade unions, to hike the minimum wage by 65 cent to €14.15 for workers over 20 years.
This is expected to result in an adjustment to the Universal Social Charge and employers' PRSI to ensure workers on the minimum wage do not fall into higher rates of tax.
There will be a rise in the carbon tax and the main tax bands will be left unchanged.
A permanent reduction to college fees of €500 has been signed off.
However, the Opposition has criticised this as it is leaving fees €500 higher than existing levels.
The Government has promised to abolish the means test for the carer's allowance over the lifetime of the Coalition. It will increase in the income disregard for the payment to allow more people to qualify for it.
With no energy credits this year, it is expected that eligibility for the fuel allowance will be expanded.
Additional reporting PA
