DUBLIN (Reuters) - Ireland’s finance minister said that he would cut income tax for middle-income earners as soon as he can, in a hint at what his policy may look like once the bailed-out country’s austerity drive comes to an end.
Ireland, which hopes to exit its EU/IMF bailout later this year, has had to introduce round after round of spending cuts and tax rises since its financial crisis hit in 2008 and faces at least two more austerity budgets between now and 2015.
Finance Minister Michael Noonan has resisted further hiking income tax since entering office two years ago, instead raising much needed revenue through measures like an unpopular property tax, and said he remained firmly wedded to that position.
“If I had the wherewithal, I’d be reducing income taxes,” Noonan told national broadcaster RTE in an interview on Thursday.
“I want to keep from increasing income taxes and when I get any opportunity, I’ll reduce them, especially for people in those middle incomes that you refer to.”
Noonan was speaking specifically about workers who earn 32,800 euros (28,558 pounds) a year - less than the Irish average industrial wage of 43,100 - who are still subject to the top rate of income tax in the country of 41 percent.
With Ireland’s budget deficit still among the highest in Europe and one billion euros in revenue needed from new taxation measures over the course of his next two budgets, Noonan reiterated that there would be no let up in the near term.
“We’re committed whatever the electoral consequences are to sort out this bankrupt state so that’s it’s a solvent, decent place,” he said.
Ireland next parliamentary elections are due, at the latest, in early 2016.
Reporting by Padraic Halpin; Editing by Michael Roddy