THE CONFERENCE of Religious in Ireland (Cori) has said the Government’s economic analysis is “extraordinarily pessimistic” and it has proposed that the overall economic recovery programme should run over a seven-year rather than a five-year period as planned. At a briefing on the economy given by Minister for Finance Brian Lenihan yesterday, Cori urged the Government to broaden the tax base and raise the tax take.
It said that among the proposals that should be considered by the Government is the introduction of a carbon tax, a residential property tax and allowing all tax breaks to be claimed only at the standard rate.
Speaking at the meeting, Cori director Fr Seán Healy said it was crucial that the Government’s response to the current economic situation – which it described as extremely difficult – should not exacerbate the problems faced by the country.
He questioned the basis for the Government’s conclusions that cuts of € 16.5 billion were needed over five years.
Fr Healy said this € 16.5 billion was based on the tax take not rising beyond 30.3 per cent of Gross Domestic Product (GDP) by 2013.
“This is interesting given the fact that total tax take in 2007 was 32.5 per cent of GDP. I don’t think there would be any objection to the total tax take returning to 32.5 per cent of GDP by 2011.
“This would mean that Government revenue would increase by more than € 4 billion a year in the final three years of a five-year scenario outlined by the Government,” he said.
Fr Healy said that if Ireland’s tax take were to rise to the EU average of 37.4 per cent of GDP, most of the required adjustments would be achieved.
He accepted there was a need for the country to be more competitive and that the public service needed to improve its delivery.
He said efficiencies were required and the Government needed to get better value for money.
Cori had been advocating a widening of the tax base for some time, he added.
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(Source: IT)