Scope for tax increases in budget, says economist

SCOPE does exist for further tax increases in next month’s budget, according to economist Jim Power, but the Government must focus on slashing public spending in its plan for next year.

In a pre-budget economic outlook, Mr Power — chief economist at financial services firm, Friends First — yesterday backed the carbon tax introduction and increases in indirect taxes on items like motor fuel, alcohol and tobacco, which could, he said, raise a combined €450 million for the Exchequer.

“Most people would probably accept tax increases if they knew the revenue would be used effectively. Unfortunately, the Government has wasted the tax revenue over the last 10 years,” he said.