The publication identifies Ireland as having the lowest tax-to-GDP ratio in the European Union, at 23%. This low ratio, however, primarily reflects well known issues in the measurement of GDP in Ireland. As a result, this measurement is not an accurate reflection of the relationship between tax revenues and economic output in Ireland.
The Deputy will be aware of the work we have done to develop the gross national income*, GNI*, method of looking at national income where we strip out some of the effects of global companies and globalisation on the national accounts. As a result of this work, GNI* provides a better measure of national income, one that is more consistent with the actual level of economic activity taking place here. Accordingly, the share of tax revenue to output in Ireland is best measured by using GNI* as a base. Taxes, as a share of GNI*, amounted to 37.7% in 2018. This figure compares to EUROSTAT's recently reported EU-wide tax-to-GDP ratio of 40.3%. When the Deputy considers the more appropriate measurement of national income, tax revenue as a share of national income is still below the average for the European Union, but it is far less below the average rate than in using GDP as the denominator. It is a far more accurate metric to use to measure tax revenue as a share of national income.