[ad_1]
The government will not increase income taxes and universal social charge (USC) rates as it seeks to plug a 40 billion euro hole in public finances caused by Covid-19, said Taoiseach Micheál Martin.
As reported by the Irish Examiner, Mr Martin said that the Government was of the opinion that the income tax should not increase, adding that despite the large deficit, the government’s commitment program would be respected.
“We are saying that we are not doing [that]. We will honor that commitment, ”he said.
“That being said, we will borrow about € 40 billion between 2020 and 2021. The initial focus will be to reduce the deficit again in the post-Covid era.
“We have been able to borrow cheaply, very cheaply, thanks to the policies and approaches of the ECB. So that will be the first emphasis,” he said.
Martin said there were a lot of loans that had been exclusively Covid related and then there were loans that were not Covid related and obviously a lot would depend on post-Covid economic growth.
Economic recovery
“It has approximately € 12.5 billion in additional household savings this year than it would have had last year and that is quite significant.
“That could be released into the economy over time when people become less cautious and worry about the impact of Covid on their own personal lives. So economic growth could take care of some, there could be other areas of generation of income that cannot be ruled out. ” ” he said.
Public Expenditure Minister Michael McGrath told the Irish Examiner that achieving economic recovery would go a long way towards repairing public finances after Covid.
Even though our debt is increasing significantly as a result of the extensive Covid supports we are providing, the cost of servicing that debt is decreasing due to remarkably favorable loan terms.
“The results of the Tax and Welfare Commission will help guide and inform policymaking for years to come,” he said.
[ad_2]