Changes to income tax bands and credits may be needed, says IMF

THE IMF has cast doubt on whether Ireland can emerge from the current crisis despite meeting all the targets of the austerity programme and said the income tax system may have to change further in the next three years.

The IMF has halved the growth forecast for next year to just 1% and called for greater EU support, including cutting the cost of borrowing with cheaper loans to replace expensive money pumped into the banks before the bailout.

It rowed back on the demand for the sale of state assets saying due to significant past privatisations, sales of those assets left could only contribute a few percent of GDP. Three months ago they suggested all €5 billion worth should be sold off.