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Dublin: 2°C Saturday 27 November 2021

There's "no room" in the Irish economy for tax cuts - we should be investing instead

The conditions just aren’t right yet, the Nevin Institute has said.

Enda won't be too sure about this.
Enda won't be too sure about this.
Image: Eamonn Farrell/Photocall Ireland

AN ECONOMIC THINK-TANK has yet again warned against introducing any tax cuts in Budget 2015.

Instead, we should be focusing on the “real economy” with large-scale public investment.

Nevin Economic Research Institute believes that an adjustment of €800 million would balance the need for “fiscal prudence with the need to avoid doing harm to an emerging economic recovery”.

This advice mainly centres on the need to ensure that the State can still raise sufficient revenue from taxes.

“Given Ireland’s low revenue base there is no room for a reduction in the overall level of taxation,” NERI economist Dr Tom McDonnell said.

“Instead, there is a strong case for the Government to fund a large-scale programme of public investment focussed on areas such as social housing, education and high speed broadband infrastructure.

While the latest quarterly figures are positive, concerns remain around the high level of debt, weak credit conditions and unemployment.

There are reportedly plans afoot to reduce the top rate of income tax from 41% to 40%.

The Minister for Jobs has described this high rate that hits people at a very low rate of income as a “handicap” to investment in Ireland.

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Nicky Ryan

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