Higher rates of income tax, VAT and property tax may be needed to fund future government spending, the Economic and Social Research Institute (ESRI) has warned. In a new report, the think-tank said future spending pressures combined with potential declines in corporation and motor tax receipts were likely to result in higher taxes in the years ahead. While increasing tax should be avoided until the economy has recovered from the pandemic, it said increases in income tax, VAT or the local property tax could “raise significant sums of revenue”. An extra €275 million could also be raised by bringing recently-built properties into the scope of the local property tax (LPT) and using updated valuations for properties. “An aging population, commitments to future spending increases, and potential declines in both corporation and motor tax receipts made the need for significant future tax rises likely even before the pandemic,” ESRI economist Barra Roantree said.

Source: The Irish Times May 20, 2021 23:01 UTC