EU Commission Comments on Budget 2016

A report this month from the EU Commission made several negative comments about some of the changes,  or lack of changes in Budget 2016.

a)  The report commented that reductions in USC were aimed primarily at increasing the incentive to work , but it would have been also a good idea to target increasing labour market participation of women, which  remains below the EU 2020 target.

b) The report also pointed out that reducing the tax base,  by raising the threshold for  the USC, and postponing the revaluation of   property tax will not help the sustainability of  revenue in the medium term.

c) On the expenditure side, the EU Comission report said that the increases to  a wide range of social protection payments could have been better targeted.
The report hints that cuts in social welfare may have been more useful – since the ratio of social transfers to GDP , which has grown quite strongly since 2000, is projected to  remain above the pre crisis level .

d)  Property Tax  – The report also points out that revenues from property taxes   in Ireland are below the EU average and  that the delay of the revaluation by 3 years for LPT – represents a lost opportunity to broaden the tax base .

The report also suggests that  extending LPT to cover  adjacent non
agricultural land would help broaden the tax base and enhance the
efficiency of land use.  (And also possibly increease house building)

Full report here