DURING THE COURSE of crisis talks on the Greek bailout last week, Taoiseach Enda Kenny made some striking remarks about his government’s actions in relation to taxes over the last four years.
Speaking to reporters ahead of a summit of EU leaders last Thursday, Kenny claimed that in the course of ensuring Ireland emerged from its economic crisis there had been no increases in income tax, VAT or PRSI.
Here are his comments in full:
In Ireland’s case, we did not increase income tax, we did not increase VAT, we did not increase PRSI, but we put up alternatives to those measures that were proposed in order to keep a pro-growth policy and make our country competitive, grow our economy and provide jobs for our people.
His claims were described as “untruths” by Fianna Fáil leader Micheál Martin in the Dáil today as he raised the matter at Leaders’ Questions.
Martin has a point. For example, VAT was increased from 21 to 23 per cent in Budget 2012 and now ranks among one of the highest in the EU.
If we were being generous to the Taoiseach he may have been referring to the government’s hugely successfully decision to cut VAT in the tourism and hospitality sector to 9 per cent. This is estimated to have created thousands of jobs in the industry.
Speaking at Leaders’ Questions this afternoon, Kenny said that the coalition had sought to reverse tax increases that he claimed Fianna Fáil had previously argued were “irreversible”.
He also cited some of the other tax changes announced by this government:
The government has also argued over the last four years that income tax has not been increased.
But others have pointed out that so-called ‘stealth taxes’ have been piled on consumers like the property tax and water charges.
Speaking earlier in the day at Leinster House, Martin was most unimpressed with what Kenny said in Brussels last week:
I think most people looked twice, or maybe three times, at the Taoiseach’s statement when he said in communication to [Greek PM] Mr [Alexis] Tsipras that Ireland didn’t increase income tax, didn’t increase PRSI and didn’t increase VAT.
“Everybody said: ‘Hang on a second, one of the first acts of Enda Kenny’s government was to increase VAT by two per cent’. And they got rid of the PRSI exemption, which essentially was an increase in PRSI for the vast, vast majority of workers, all workers, but particularly low-paid workers.
There have been increases in around 40 odd taxes under this government alone so it’s was an incredible communication to Mr Tsipras on behalf of the Taoiseach.
So, Fianna Fáil claims there have been a total of 45 tax increases under this coalition government. They range from the introduction of the local property tax to the increase in tobacco levies.
Now, Enda Kenny wasn’t claiming Ireland didn’t increase taxes at all. But the list below outlines where there were effective increases in PRSI and where there was a very clear increase in VAT… as well as some €3.5 billion in other taxes that have been introduced.
Here’s the full list courtesy of Fianna Fáil:
Martin was, as you might expect, not very impressed with the Taoiseach’s remarks in Brussels last week.
On the Leinster House plinth he said it “undermines his credibility” at EU summits, and added:
I think it demonstrated either the bubble that he’s living within or how out of touch he is with the reality of what actually has been happening on the ground even under his own government’s remit and decisions that his own government took.
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