Ireland's Lenihan Vows No Tax Hikes

by Amanda Banks, Tax-News.com, London

21 September 2009

Speaking on Irish radio station Today FM on September 17, Irish Finance Minister Brian Lenihan, discussing the forthcoming December budget, firmly underscored that there will be no immediate increase in the tax burden in 2010.

Despite receiving an exhaustive report from the Commission on Taxation earlier this month containing an outline for the comprehensive reform of the Irish tax system, Lenihan emphasized that it would not mean an instant hike in taxes. "There aren't going to be higher taxes in the next budget, I don't know how often I have to say this – you can watch my lips at this stage,” he said in the interview.

While confirming that a carbon tax would be implemented, as previously disclosed, Lenihan underscored that there would not be any further movements on the tax front, stating, “I am not aware of any other [new tax hikes],” disclosing that the government would instead opt for retrenchment measures to save the EUR4bn required.

Meanwhile, Prime Minister Brian Cowen, speaking to Irish parliament, underscored that Ireland’s path to recovery will in the short-term revolve around three priorities, and that a comprehensive reform of the tax system would, for now, take a backseat. Cowen outlined that, in order for Ireland to recover, the government would need to successfully implement the NAMA initiative, pass the Lisbon treaty, and allocate significant cuts to spending.

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