Monday 23 July 2018

Be more active in using taxes to tackle land hoarding - IMF

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Gavin McLoughlin

Gavin McLoughlin

The International Monetary Fund (IMF) has encouraged the Government to be more active in using taxes to tackle land hoarding.

The international rescue fund also said the Government should do more to improve housing affordability.

The recommendations are found in the IMF's yearly report on Ireland, in which its executive directors also said the country should guard against the return of boom-and-bust dynamics in the economy.

The directors "encouraged the authorities to boost efforts to expand the housing supply and improve affordability", the IMF said. The directors also "considered taxation could be used more actively to reduce land and property hoarding, and that measures to improve housing affordability should be well targeted".

They said there was a need to accelerate repair of bank balance sheets, while also seeking to sell off the remaining taxpayer stakes in the banks as market conditions allow.

"While the outlook remains positive, lingering crisis legacies, rising housing prices, and external downside risks - mainly from resurgent global protectionism, adverse effects from Brexit, and ongoing changes in the international tax landscape - pose challenges," the IMF said.

It projected the economy would grow by around 5pc this year, mainly driven by domestic demand, with growth likely to moderate to 3pc in the medium term. It also welcomed the planned introduction of a so-called 'rainy-day fund' to guard against a downturn.

The Government plans to divert some corporation tax receipts into this fund in order to protect against the potential loss of those revenues in future.

Speaking yesterday at the conclusion of the National Economic Dialogue, Finance Minister Paschal Donohoe said that he was "absolutely determined to ensure that our national finances offer the greatest security possible to our country if we see conditions begin to shift".

"I will deliver that. It will happen in Budget 2019," he added.

Irish Independent

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