James Lawless
Question:351. Deputy James Lawless asked the Minister for Finance the way in which tax receipts in 2020 compared to expectations at the outset of 2019; and if he will make a statement on the matter. [1857/21]
View answerWednesday, 31 March 2021
Questions (351)
Written answers
I assume the Deputy is referring to how receipts in 2020 performed compared to expectations at the outset of that year, rather than 2019. In January of 2020, my Department published a high-level update to its economic fiscal and forecasts in the Medium Term Fiscal Strategy. At that stage, tax revenues for 2020 were estimated at €63.5 billion, which would have represented growth of 7 per cent on the record 2019 performance of €59.3 billion.
Reflecting the impact of Covid-19 on our economy and public finances, tax receipts in 2020 ultimately amounted to €57.2 billion, some €6.3 billion under the initial, pre-Covid projections published in January and by €2.1 billion, or 3.6 per cent on 2019.
However, the decline in tax revenues in the year was not as steep as had been feared. Although most revenue streams declined sharply, continuing growth in corporation tax receipts, and a remarkable resilience in income tax receipts, helped to prevent a more severe deterioration. Income tax receipts were down only 1 per cent in 2020, which is a testament to the highly progressive nature of our tax system. Unfortunately the worst affected sectors of the economy were dominated by relatively low wage earners, so most of those who lost their employment as a result of the pandemic were outside the income tax net.
The Government has acted to support those out of work through the Pandemic Unemployment Payment (PUP). Just under €5 billion was spent on PUP payments last year and the Government is committed to continuing to help those who have lost their jobs under the current restrictions.