Ireland's Cowen Sees Tax Shortfall Of EUR8 Billion In 2008
Sunday January 4th, 2009 / 20h56
DUBLIN -(Dow Jones)- Ireland's Prime Minister, Brian Cowen, said Sunday he sees a tax shortfall of EUR8 billion in 2008 and warned that it could hit EUR20 billion in 2010 without corrective action.
He said there has been a "significant deterioration" in tax receipts over the last three months and said it could take up to five years to balance the gap between public spending and tax revenue.
"We've come through recessions before and we have to look to our own capacity as a people to pull together," Cowen told state broadcaster RTE Radio, adding that the current level of borrowing cannot continue.
Last week, the Irish National Treasury Management Agency said that Ireland's national debt hit EUR50 billion at the end of 2008, an increase of EUR13 billion from the same time the previous year.
Ireland was the first eurozone economy to fall into recession after a decade-long period of unprecedented economic growth, fueled by a booming construction sector and investment by multinationals.
Last month, Minister for Finance Brian Lenihan said that the economy will likely contract by 4% this year, in line with most economists' latest projections. The government's 2008 exchequer figures are due for release Monday.
-By Quentin Fottrell, Dow Jones Newswires; +353-1-676-2189; quentin.fottrell@dowjones.com
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