Ireland May Cut Taxes and Boost Spending

June 22, 2016 Taxation in Ireland

DUBLIN – Ireland’s improving financial position has given the government enough room to boost spending and to cut taxes.

On June 21st the Department of Finance of Ireland released its annual Summer Economic Statement, which outlines the broad fiscal and economic position of the country over the coming years.

In the statement it was shown that the budget deficit in Ireland has abated significantly over recent years, reaching a level of 2.8 percent of GDP in 2015, and, further, that in 2018 the government could see a budget surplus as early as 2018.

It is anticipated that the improved financial position will provide the government with an estimated “fiscal space” of EUR 1 billion in 2017.

Approximately 85 percent of the newly available funds are expected to be used for increased government spending, while the remaining 15 percent will be used to fund tax cuts.

In the statement it was also revealed that from 2019 onwards the government will initiate a “rainy day fund” following the achievement of a balanced budget.

Photo By: Emilian Robert Vicol