EU Commission recommends Ireland broaden its tax bases

The European Commission is recommending that Ireland takes all necessary measures to effectively address the Covid-19 pandemic, sustain the economy and support the recovery that follows.

It also says the tax base here should be broadened over this year and next.

“The challenges facing Ireland in regard to poverty and employment quality and support, including for people with disabilities, remain and they are likely to be exacerbated by the pandemic,” the Commission says.

The recommendations are contained in the Commission’s response to the Government’s submission of its National Reform Programme and Stability Programme Update last month.

It says that when economic conditions allow, fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability should be pursued, while at the same time enhancing investment.

The Commission says Ireland should front-load mature public investment projects and promote private investment to foster the economic recovery.

It claims investment needs to be focused on the green and digital transition, in particular on clean and efficient production and use of energy, sustainable public transport, water supply and treatment, research and innovation and digital infrastructure.

“The restart of the economy requires that Ireland advances on its ambitious environmental, climate, energy and infrastructure investments,” it says.

“Ireland has lagged behind so far in tackling decarbonisation. Greenhouse gas emissions in transport and buildings are high and have remained on a rising trend. Ireland will fall short of the 2020 energy efficiency and renewable energy targets.”

Support to companies, particularly small and medium-sized ones, is encouraged, especially through measures that boost their liquidity, while assistance is also needed for households impacted by the Covid-19 crisis.

“The Irish authorities and banks have introduced a number of measures to alleviate the financial difficulties faced by businesses and households,” it states.

“It is important that these measures provide the necessary liquidity and foster sustainable restructuring solutions for borrowers whose financial difficulties are strictly linked to the outbreak, and who are therefore expected to return to viabil