Government should prioritise diversifying tax base - IMF

IMF Managing Director Kristalina Georgieva has urged the Irish government to prioritize diversifying the country's tax base. In an interview with RTÉ’s Six One, she emphasized the importance of having diverse public finances as protection against uncertainty. Georgieva stated that Ireland should diversify its revenues to build a solid foundation for public finances.

She reminded that the crisis had led to a recognition of the significance of sound public finances in protecting people and businesses. The IMF chief praised the government's ability to cushion the country during economic shocks due to its strong fiscal position, low debt levels, and budget surplus. She advised the government to provide support only when necessary and in a measured, targeted manner.

Georgieva highlighted the need for temporary, well-targeted measures to address the energy shock, while emphasizing the importance of not suppressing price signals. These signals are crucial for promoting economic efficiency in energy use. The IMF managing director also noted Ireland's housing market as "tight but not unresolvable" and recommended incentivizing people to move outside heavily urbanized areas like Dublin.

She suggested leveraging digital infrastructure to enable remote work and creating incentives for building houses and buying homes in less congested regions across the country. Despite acknowledging Ireland's achievements, Georgieva urged the government to maintain a solution-oriented mindset.