Ireland’s economic recovery is unlikely to hit the headlines, but the Irish Government is not letting that stop it from pushing forward with plans to slash corporate tax rates and increase capital gains tax relief.
In a speech in Dublin on Tuesday, Minister for Finance Paschal Donohoe told the National Council for Public Expenditure and Reform (NCPE) that the government is making “significant progress” in reducing the burden of corporate taxes on Ireland’s economy.
It has also pledged to double the capital gains allowance to 20 per cent by 2020, which will see the top rate of 50 per cent drop from the current level of 45 per cent.
Donohye also pledged that the Irish government will continue to make progress on a long-term investment plan.
“We have committed to making significant progress on the long-haul investment plan,” he said.
“The long-running plan to raise private investment and create jobs will be in the works and will continue as part of the Government’s long-range economic strategy.
“Ireland will continue its long-held approach of promoting a low corporate tax rate, but also will take steps to make it easier to bring companies back into the public sector. “
Our long-standing commitment to promoting public investment in the private sector and to a sustainable growth economy is now in the process of being implemented,” he added.
The current structure, however, is not working for Ireland. “
This is not a new idea, but it is an important step in a long process of reforming our tax system.
The current structure, however, is not working for Ireland.
The Irish government is also working to ensure that our businesses remain competitive and competitive in the global economy.”
While a recession is not yet inevitable, the country’s economy is likely to take a hit.
Unemployment is currently at 6.3 per cent, with inflation rising to 5 per cent and a growth forecast of just 0.7 per cent this year.
There are fears that the slump will spread to other parts of the economy, as inflation has risen to 5.3 percent, while unemployment has risen from 4.3 to 6.5 per cent in recent months.
“Inflation is a big issue, but I think we need to recognise that inflation is not the only issue facing the economy right now,” Mr Donohoy said.
Ireland is one of the European Union’s poorest countries, with average incomes in 2015 being around €20,000, below the EU average of €40,000.
In order to keep its economy from going into a recession, the government has also been investing heavily in infrastructure.
The National Development and Reform Commission has promised to spend €500 million in the coming year on the development of new roads and bridges, as well as upgrading the national electric grid.
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