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Let's bring in tax cuts worth €400 million, says business group

The ‘fear factor’ that that has long gripped consumers is now easing, says IBEC. The business group says the time is right to bring in a raft of tax cuts.

FIGURES SHOWING RISING employment, strong consumer sentiment and recovering retail sales all point to a “solid” recovery in Ireland’s domestic economy, according to business group IBEC, which has published its Consumer Monitor for 2014 this morning.

The Monitor, which looks at economic performance across a number of categories, details how a strong export sector has now led to a broader-based recovery.

The ‘fear factor’ that has long gripped consumers is now easing, according to IBEC.

Chief Economist with the lobby group Fergal O’Brien says this means the Government should bring in a raft of tax-cuts in the upcoming Budget.

“Positive economic trends mean income tax can now be reduced. This money will go back into the economy and ultimately support growth and job creation.

There is scope for €300 million worth of income tax reductions, a €100 million reduction in consumer taxes and the abolition of the pension levy.

Reducing tax “could lead to a 4 per cent rise in disposable income” next year, according to O’Brien.

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After reaching a seven-year high in April, consumer sentiment in Ireland fell sharply in March before attaining a new high in July, according to the IBEC monitor.

Read: There are just 66 days until the next Budget so let’s talk about how much we should cut

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Daragh Brophy

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