THE GOVERNMENT should draw up an emergency budget to cope with the exchequer’s ever worsening revenue shortfall, the country’s accountants have said.
Last October, Minister for Finance Brian Lenihan expected to raise €41 billion in taxes. Today, the prediction stands at €37 billion, and the estimate may be optimistic, said the Consultative Committee of Accountancy Bodies in Ireland.
The organisation represents 23,000 members in the Institute of Chartered Accountants in Ireland, the Association of Chartered Certified Accountants, the Institute of Certified Public Accountants in Ireland, and the Chartered Institute of Management Accountants.
“At this stage it is clear that current expenditure cuts . . . will not match the decline in tax revenue. Indeed, the €37 billion tax estimate may be optimistic,” it said.
“No one welcomes increased taxation or public service cuts,” said the committee, adding that it had not come to its decision to call for an immediate budget lightly. The Government should raise taxes, cut spending, and drive the use of innovation and research and development, it said.
Last Tuesday, the committee gave a presentation to the Commission on Taxation in relation to the submission it made to the body last May. Income taxes will be the most important single source of tax this year because the recession is hitting capital and indirect taxes most heavily, the accountancy committee said. But income tax is being eroded because of pay cuts and redundancies, it added.
