Irish Finance Minister Says No Direct Tax Increases

by Jason Gorringe, Tax-News.com, London

12 March 2002

Irish Finance Minister, Charlie McCreevy has pledged that the Government will not raise direct taxes if re-elected.

Speaking at the weekend, Mr McCreevy stated that: 'We must avoid going back on our achievements and I would pledge on behalf of Fianna Fail that we will not increase direct tax rates if the Irish people re-elect us to Government.'

However, the Finance Minister warned that although economic growth over the next few years is likely to remain strong by international standards, it will be subdued compared to the performance of recent years, making the possibility of much more 'across the board' tax cuts a remote one.

Opposition critics have argued that the wording of Mr McCreevy's pledge leaves the door open for indirect tax increases, such as VAT hikes, if the Fianna Fail/Progressive Democrats coalition is re-elected. They have also accused the Government of advancing the country's wealthiest citizens at the expense of everyone else.

The Irish Finance Minister hit back at his accusers, pointing to the fact that of the E4.8 billion in tax reductions which taken place over the past five years: '43% of those tax reductions have gone to increasing the basic tax allowances...[and] another 22% went into taking over 370,000 taxpayers off the top rate of tax. Then, over 16% went to reduce the standard rate of tax paid by all taxpayers.'

He revealed that just 11% of the tax reductions in the previous five budgets exclusively benefitted the top band of taxpayers.

Recommended