IMF wants 'suitably high level' of property tax
The International Monetary Fund (IMF) has stated that the rate of the new property tax should be twice what the Government is currently suggesting.
In its latest report on Ireland's bailout, the IMF said that 0.5% is a suitable figure for the tax - double the 0.25% figure put forward over the weekend.
"The planned introduction of a value-based property tax in 2013 will provide a progressive and stable source of revenue, said the report. "A suitably high level for this tax - where staff favored around the 0.5% mark - would help maximize these benefits. "
It has also put pressure on the Government to reduce social welfare payments and is urging them to introduce means-testing for child benefit.
The IMF stated that scaling back benefits, including unemployment payments, medical cards, subsidised college fees and the household benefits package could generate significant savings for the Government.
"Relative to other OECD economies, Ireland has a combination of high personal and
indirect tax rates and relatively narrow tax bases," the report stated.
"This provides considerable room to raise revenues without increasing the already elevated marginal tax rates, and while also avoiding higher effective rates on lower income workers that could undermine work incentives.
"For example, special income tax reliefs—which currently benefit only those mployees earning above the high entry point for income tax - could be better targeted to low-income taxpayers, and options to broaden the PRSI base could be examined.
"There is also scope to expand the well-designed carbon tax to all fuel types, and to redesign vehicle taxes in a way that can provide significantly higher revenues, while fully preserving incentives for environmental conservation."
