There will definitely be a new income tax bracket and the top rate of 44% will apply to incomes higher than €40,000. There will be a cost in terms of revenue for this, as some incomes will pay less tax.

The government is prepared to accept more than €1 billion in revenue loss as a result of this adjustment. After all, this is what every “lightening of the tax burden” does. Hopefully, though, it pays off in more ways than one.

The extent of financing this tax cut will be revealed when the draft 2026 budget is submitted to Parliament on October 6. But it is not expected to stand in the way of a new record tax haul.

Together with that haul, the percentage of indirect taxes on total revenue will increase, since inflation and expected higher consumption will boost VAT revenue.