Taoiseach says no plans for budget tax cuts

The Government does not plan to cut taxes in December's budget although an adjustment of income tax bands is possible, the Taoiseach…

The Government does not plan to cut taxes in December's budget although an adjustment of income tax bands is possible, the Taoiseach said.

Mr Ahern, on a tour of South East Asia, also raised the government's forecast for economic growth.

Better-than-expected revenue returns this year, largely contributed by a big jump in income tax receipts, are expected to give Finance Minister Mr Brian Cowen scope for loosening government purse strings in his December budget.

But he and others in government have cautioned this will not mean a budget in which taxes are slashed and spending hiked.

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Mr Ahern said in an interviewe he was happy with all tax levels, saying: "We've got to where we want to get them.

"The only issue now is the adjustment of the (income tax) bands and that's obviously an issue that the Minister will be looking at," Mr Ahern said in an interview.

Tax bands could be adjusted to reflect wage increases, reducing the tax burden on lower paid workers, economists said.

"As a minimum we would be looking for that in the budget and there should be scope to do it," said Mr Oliver Mangan, Chief Bond Economist at AIB Global Treasury in Dublin.

Asked about corporate and capital gains taxes, Ahern said: "We don't intend to change them now. They are low and very competitive so there will be no changes."