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We’ll need EU-IMF permission to freeze income tax rates – Kenny

The Taoiseach warns that Ireland has committed to raise income taxes – and only an amended bailout deal can get us out of it.

Enda Kenny says the EU-IMF deal will need to be amended if his government is to avoid increasing income tax.
Enda Kenny says the EU-IMF deal will need to be amended if his government is to avoid increasing income tax.
Image: Eamonn Farrell/Photocall Ireland

IRISH WORKERS may still avoid an increase in income tax in December’s Budget – but only if the government is able to renegotiate Ireland’s funding deal with the EU and IMF.

Speaking at the end of Fine Gael’s think-in yesterday, Enda Kenny said that while his government was committed to ensuring that income tax was not increased during its term of office, its hands were currently tied by the previous bailout agreement.

“The previous government… signed off on a situation where it agreed there would be €250m extra in income tax taken from the taxpayer for each of the next three years,” the Irish Examiner quotes Kenny as having told reporters. ”We now have to renegotiate that with the IMF-EU.”

The comments came after the Taoiseach yesterday said that “everything is on the table” for December’s Budget, and that the government was prepared to be “radical” in proposals for spending reforms.

Kenny failed, however, to equivocally rule out the prospect of tax increases – though he and Tánaiste Eamon Gilmore had affirmed, 100 days into their term of office, that income tax rates would not be increased nor social welfare payments cut.

The finance minister Michael Noonan, later speaking to reporters, said December’s Budget would be two-thirds as severe as last year’s – indicating that the potential adjustment could be towards the higher end of the €3.6bn to €4bn window outlined by Kenny.

Read: Taoiseach: “Everything is on the table” in December’s Budget

More: Front-loaded budget ‘could push economy to breaking point’

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Gavan Reilly

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