The Director of Public Policy and Tax at the Institute of Chartered Accountants has said he expects tax changes in Budget 2019 to benefit workers by as little as €5 a week.

Brian Keegan told RTÉ's Morning Ireland that he expected Finance Minister Paschal Donohoe to be cautious and introduce a 'rainy day fund' and limited changes to the tax system.

Mr Keegan said that people will be looking for "no harm to be done to them rather than a huge amount of benefit" from next month's budget. 

Mr Keegan said all the signals from the Finance Minister are that he will seek to achieve a balanced budget and not borrow for additional benefits.  

USC and income tax cuts should be seen as part of one overall package and cuts will be minimal, he added.

As the country reaches full employment, the ability to increase taxes further becomes more difficult, Mr Keegan added. 

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However, recommendations made by Central Bank Governor Philip Lane should carry significant weight for the Government in deciding Budget 2019, Mr Keegan said.

Professor Lane had urged the Government to run a surplus in Budget 2019 in order to prepare for the next economic downturn. 

He also said the Government needs to look at increasing the VAT rate on the hospitality sector, but Mr Keegan said the disruption that is expected in the services trade as a result of Brexit would make it difficult to justify a change in the VAT rate from 9% to 11% for the hospitality sector.

Mr Keegan also said he did not think the recovery in tax revenues leaves the capacity to fund a SSIA-type savings scheme as Professor Lane had also proposed.

Pointing out that the last SSIA scheme cost €2.5bn over the lifetime of the scheme, he said it is very hard to see how Paschal Donohoe would find that kind of money to fund a similar savings scheme at the moment. 

Mr Keegan suggested that excess receipts from corporation tax would likely be used to fund a €500m Rainy Day Fund. 

He said Minister Donohoe has been very cognisant of commitments to the Partnership for Government and the confidence and supply agreement and the Rainy Day Fund is a component of that.

He said Brexit will challenge the capacity to export goods to the UK and no matter how good the deal is, there is "inevitably" going to be some weakening in our tax revenues.