Tax Increases Still A Possibility For Ireland In Next Budget

by Amanda Banks, Tax-News.com, London

06 October 2008

Speculation over the Irish government's intention to include tax increases in its 2009 budget has mounted this week after recent figures have revealed a financial deficit caused by flagging tax revenues.

According to the figures, the government is currently 11% behind targets set out in the last budget, with a loss of EUR3.6bn expected for this year.

Much of the deficit has been attributed to the current economic climate, with problems in the property market having a significant effect on the amount of stamp tax collected, and with VAT and capital gains tax also suffering as a consequence.

It is now expected that tax increases coupled with a reduction in public spending will feature heavily in the government's 2009 budget.

At a meeting to discuss the possible solutions which could be incorporated into the next budget over the weekend, the country's Department of Finance stated that currently "nothing is being ruled out", increasing the speculation that certain taxes (particularly income tax) will see a rise.

One other option being considered by the government is the charging of higher rates of registration fees for the country's third-level students.

However, concrete plans have yet to be announced, with the government keen to avoid treading on the toes of voters opposed to the idea of further tax increases in the new year.

Recommended