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Tax cuts on cards if economy continues to grow

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Tax cuts on cards if economy continues to grow

TAOISEACH Enda Kenny has indicated that cuts in income tax are on the cards if the economy continues to grow.

He stressed that “flexibility” in the tax system is an option that is open to Finance Minister Michael Noonan.

But the Irish Congress of Trade Unions (ICTU) continues to insist that wage increases would be preferable to tax cuts.

Several government ministers have mentioned the possibility of income tax cuts in the next Budget, and now the Taoiseach has added his weight to the debate.

Mr Kenny said easing the tax burden remains a government priority, but it is dependent on the strength of the economy, and how this will impact on the next two Budgets.

He also said the Government will announce its strategy to revitalise the construction sector later this week. He pointed out there are 100,000 people skilled in this sector who need to get back to work.

Communications Minister Pat Rabbitte also said the Government needs to recognise that people expect some form of respite following years of tax rises and spending cuts.

He said: “Six years into this recession, people are saying ‘we’ve had enough’.”

He suggested the coalition parties needed “to get a grip” and focus on core issues.

He also said the perilous economic conditions which the Coalition inherited when it took office are no longer there.

The time is right for the Government to examine ways of easing the financial burden on households, he added.

Meanwhile Jobs Minister Richard Bruton said yesterday that it would be “far better” if workers were to benefit from a tax cut rather than a hike in their pay packets.

Mr Bruton said: “There is no doubt in my mind that we need to try and avoid increases in our headline costs. Many businesses are still struggling trying to stay competitive.”

But a spokesperson for the Irish Congress of Trade Unions said tax cuts would not benefit everyone fairly.

“Tax cuts tend to benefit wealthier people disproportionately,” he said.

Mr Bruton also played down claims from his cabinet colleague Mr Rabbitte, who had warned that the government will “not see 2016″ should the current “drift” continue.

“I think the government faces challenges all the time. But the core issue for us is the jobs challenge,” he said.

Irish Independent

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This article was written by smithandpearson