Cowen targets tax loopholes
MULTI-MILLION euro tax loopholes will be abolished in tomorrow’s emergency Budget, the Taoiseach confirmed last night.
Brian Cowen also reiterated that income taxes must be increased and spending levels would be cut as part of a long-term plan to correct the public finances.
Speaking in a special webcast on his Fianna Fail party’s website, the Taoiseach also said the Government had to make “some big strategic decisions” regarding the banking sector to free up credit for small firms and win back international investor confidence.
He said: “We have to raise revenues to make up for some of the lost revenues.
“We have to cut expenditure and we also have to eliminate tax reliefs that have been available in the past. But this will be done over a number of years.”
Mr Cowen earlier clashed with opposition leader Enda Kenny, who told his weekend ard fheis that he could fix the public finances within three years with no hikes in current income tax bands.
But the Taoiseach said the Government had to redesign the taxation system to meet the requirements of the economy.
“In other words, there are parts of our tax system which could not return the levels of revenue that we saw in the past,” he said during an EU-US summit in Prague.
“Even with growth in the future, the deterioration in our public finances means we have to take strong action, including on the revenue side.
“Any suggestions to the contrary are a cod.”
On Saturday, Mr Kenny told delegates at his ard fheis in Dublin:
“I will return the public finances to health by 2012 – without increasing the standard and current top rates of income tax.”
Last week, Fine Gael announced a pre-Budget document calling for a temporary “solidarity tax” of 2pc on incomes above €100,000 and 4pc on salaries over €250,000.
In his webcast, Mr Cowen said people would be asked to take the strain in coming months and years and to make more sacrifices to get the economy back on track.
Nobody would be immune from the challenges, he added. “We will come through this and when we look back we will be proud of the collective effort we made,” he said.
