The Coalition could reduce the Universal Social Charge from 4% to 3% on incomes between €25,760 and €70,044 in Budget 2025.
It is believed Minister for Finance Jack Chambers tabled the proposal, following a meeting with the coalition leaders, who held discussions for more than two-and-a-half hours.
Reducing the USC was a priority for Fianna Fáil to target low and middle income earners in the budget’s income tax package.
It follows on from the reduction of 0.5% which was made last year by then finance minister Michael McGrath.
A one percentage point reduction would be the largest taken by this Government, and form part of a tax package which also involves changes to credits and bands.
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The coalition leaders, along with Mr Chambers and Minister for Public Expenditure and Reform Paschal Donohoe, are expected to hold several more budget meetings over the weekend.
A Government source said progress was made at tonight’s meeting, but some of the biggest budgetary items have not even been discussed yet.
