The European Commission has criticised plans to abolish the Universal Social Charge, claiming that it could jeopardise Ireland’s ability to deal with another financial crisis.

This assessment by the European Commission, the first since the new Government took office, is critical of policies surrounding taxation.

It notes the cuts to the Universal Social charge and other taxes and says that the measures would not seem to be geared towards broadening the tax base.

However, Finance Minister Michael Noonan is sticking by plans on USC when he was questioned in the Dáil this afternoon.

“The Government is not committing to reduce the tax take,” he said.

“The Government is committing to reduce tax rates.

“We’ll actually collect more taxes, and if you look at the projections for taxes for the next five years, you will see each year, the tax take will increase.”

The Commission also criticises the postponement of revaluation of the Local Property Tax as another issue of narrowing the tax base.

It also stated that the continued dependence on Government funding by Irish Water is a challenge and could see necessary infrastructure improvements competing with investment projects in other areas.

The high cost of childcare was also criticised, with the report stating: “As a percentage of wages, net childcare costs in Ireland are among the highest in the EU, the second highest for couples and the highest for single parents”.