‘Limited room’ for tax cuts in next Budget says IFAC

The State's financial watchdog has warned there is "limited room" for tax cuts in next year's Budget.

‘Limited room’ for tax cuts in next Budget says IFAC

The State's financial watchdog has warned there is "limited room" for tax cuts in next year's Budget.

In its latest Advisory Note, the Fiscal Advisory Council has said discretionary cuts would put added pressure on spending targets.

However, IFAC has backed the Government to make some "departures" from the EU's expenditure guidelines - noting the current benchmark is too restrictive.

The coalition has talked up the possibility of income tax cuts in Budget 2016 for several months now because of the recovery's increasing pace - with growth now the fastest in the EU.

IFAC has said it supports the Government making a “limited departure” from European Commission spending rules next year.

It claimed that targets from Brussels for Ireland are "more constraining than required", however they warned that there will not be much scope for discretionary tax cuts.

IFAC warns “giveaway” tax Budgets would "tighten the expenditure benchmark" at a time when the State still faces medium-term pressures.

The warning comes as Finance Minister Michael Noonan seeks more leeway from Europe ahead of the planned Spring Economic Statement later this month.

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