Irish citizens boycott austerity tax

02.04.12 @ 09:19

  1. By Honor Mahony
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BRUSSELS - Almost half of Irish people have refused to pay a household tax imposed as part of promised savings measures, while government pressure to secure the levy risks further angering an austerity-weary public.

  • Pro-Lisbon-Treaty ad from 2009: Ireland has been the poster-boy of EU anti-crisis efforts up to now (Photo: Conor McCabe/Jason Clarke)

By a Saturday (31 March) midnight deadline, around 805,000 of the country's 1.6 million registered households had paid the tax, which has been subject to a high-profile boycott campaign.

The Irish government agreed to introduce it in 2012 as part of a deal with the EU and the International Monetary Fund - from which it secured an €85 billion loan in 2010.

But it has been unpopular from the very beginning for its across-the-board nature: the same levy is applied both to rich and poor households.

The boycott has been led by nine members of parliament. They compare the campaign to the massive protests in Ireland in the late 19 century against high rents and evictions.

"The Household Tax is linked in the minds of those opposing with the billions being paid from taxpayers' funds to bail out bankers and speculators for bad private gambling debts and with the swingeing austerity being imposed," said a recent statement by the group-of-nine.

Those who do not pay will be fined and risk court action.

For its part, the government has appealed to people's civic and patriotic duty. It has also pledged to spend the €160m raised by the tax on local services.

"I thank them and acknowledge their genuine patriotism to this country at a difficult time," said environment minister Phil Hogan in reference to those who have already paid up.

The authorities are in a difficult position, however. Irish citizens have already been subject to tough austerity measures in the form of €24 billion of tax rises and spending cuts.

Until now the country has been held up as a shining example of how to beat the crisis - imposing the cuts without seeing widespread social unrest.

The test comes as figures released by the country's national statistics office last week show the country is back in recession, with GDP falling by 0.2 percent for the last quarter of 2011, after falling by 1.1% in the previous quarter.

The current debate may also become embroiled in the forthcoming referendum on the fiscal discipline treaty. Ireland is holding a vote on the document on 31 May. Failure to approve the treaty will mean that Ireland will not be allowed to receive funds from the eurozone's forthcoming permanent bail-out fund, the European Stability Mechanism.