More new taxes on the cards, warns Lenihan
'It seems this Government believes it will be the first administration in the history of the world to work its way out of a depression and recession by taxing and more taxing'
CONSUMERS are facing a raft of further new taxes next year as the Government attempts to raise another €1.75bn in revenue.
These include the taxation of child benefit, a carbon tax to punish environmental polluters and a property tax.
Finance Minister Brian Lenihan clearly signalled yesterday that all of these options would be considered to raise €1.75bn in extra tax next year and €1.5bn in extra tax in 2011.
And he even said that further "adjustments" might be required over the next five years, if the economy did not recover.
"The scale and nature of these measures will depend to a great extent on the strength of the economic cycle. If growth is better than forecast, less will need to be done at that stage," he said.
The confirmation by Mr Lenihan that child benefit will be means-tested or taxed in the Budget for next year will disappoint children's groups such as Barnardos.
The group has warned that the €2.5bn scheme, which pays €166 per child, per month, is one of the few supports available to families.
The possibility of introducing a property tax will also cause concern to householders.
The Central Bank, which is backing such a move, has estimated that a €1,000 annual tax on the 1.7 million dwellings in the state would yield €1.7bn per year.
And new environmental taxes, which could apply to companies with heavy emissions, airline flights or car journeys, are also on the agenda.
Levy
Green Party leader John Gormley said there would certainly be a carbon levy in the next Budget.
"It has to be well thought out. The minister himself has said there are a number of options being pursued by the Commission on Taxation," he said.
But the Government's approach attracted criticism from the opposition, who warned that the prospect of even more tax increases could shatter consumer confidence and reduce spending even further.
Fine Gael finance spokesman Richard Bruton said Mr Lenihan was hauling in tax but failing to ease the struggle encountered by people in ordinary businesses who were "trying to hang on to their jobs".
"It seems this Government believes it will be the first administration in the history of the world to work its way out of a depression and recession by taxing and more taxing," he said.
But Mr Lenihan said the Government had taken care to ensure the tax increases were fair, equitable and highly progressive.
"I would point out that notwithstanding all the increases made today, Ireland will continue to have one of the lowest tax wedges within the OECD," he said.
- Michael Brennan Political Correspondent
