Hint at property and service taxes

'BORD SNIP':UCD ECONOMIST Colm McCarthy has said the Government may have to raise rates of tax in future while revenue-raising measures such as water charges may have to be examined.

He also suggested that large-scale capital projects such as Metro North in Dublin could be deferred.

Speaking on RTÉ yesterday, Mr McCarthy, who last year headed the committee reviewing Government spending, known as “An Bord Snip Nua”, said that the Government would have to look at further expenditure cuts and revenue-raising measures.

He said that while rates of tax may have to be raised, there were also possibilities for the Government to expand the base of its revenue.

“We are unusual by European standards in the things on which there is no tax at all.

“We do not pay for water in urban Ireland anyway and we do not pay any kind of residential property taxes.”

Mr McCarthy forecast that the Government would fight very hard to avoid any European interference on corporation tax rates.

“That has been the bulwark of industrial policy since the 1950s,” he said.

He said there were quite a few proposals in the “Bord Snip” report that could be revisited and he suspected that a number could be looked at again by the Government in the months ahead.

“It is also possible that the Government may also want to have a fresh look at the public capital programme. There are still projects in the public capital programme that date back to the National Development Plan that was prepared in 2005 when we all thought Ireland was going to be a rich country forever.

“Some of them are still lurking in the public capital programme. Maybe it is time with projects like Metro North to ask whether they should not be deferred,” he said.