Wednesday, August 26, 2009

Irish PM Hints At Moves Beyond Property Tax

Source : The Business Times, August 25, 2009

(DUBLIN) A tax on Irish property is not a done deal as part of efforts to squeeze the burgeoning budget deficit, Prime Minister Brian Cowen said in an interview.

'I'm not wedded to property tax,' Mr Cowen told the Sunday Independent: 'But I don't want that to be suggested that we are not prepared to take the decisions that need to be made if that is what is deemed necessary. We have very low taxes on property in this country, if any.'

Ireland's Commission on Taxation has finished a government-sponsored report on possible changes to the system of taxation starting next year and local media have reported that it has recommended introducing a property tax based on each home's value to replace a stamp duty tied to property sales.

Ireland is targeting 1.75 billion euros (S$3.6 billion) in additional tax revenues and 2.25 billion euros in spending cuts next year on top of existing measures unveiled as part of a five-year austerity plan to get its deficit, proportionately the worst on the euro zone, under control.

Mr Cowen, whose popularity levels are at record lows amid dissatisfaction over his handling of the economy, faces a slew of tests in the autumn, including a second referendum on the European Union's reform treaty, the creation of a 'bad bank' to deal with the financial crisis and another tough budget.

'There are a lot of difficult political decisions coming down the line,' he said in a rare interview.

Mr Cowen's Fianna Fail party suffered a rout in local and European elections and two parliamentary deputies recently jumped ship in protest over hospital cuts but the 49-year-old said he was confident he had the support of his colleagues.

'The party knows there is a job of work to be done by government. People are going to have their say in terms of what the position should be,' Mr Cowen said.

'But at the end of the day, we have to close the gap between what taxes are coming in and what is being spent. If we don't do that, we put the whole future at risk.' - Reuters

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