Dáil Éireann Debate, Thursday - 6 July 2017
71. Deputy Michael McGrath asked the Minister for Finance if his Department and the Revenue Commissioners have reached conclusions as to whether the cost of the USC reductions in budget 2017 were underestimated; and if he will make a statement on the matter. [31972/17]
Amharc ar fhreagraThe position is that officials from my Department and the Revenue Commissioners have been reviewing the USC performance. As part of the review, my Department and Revenue have re-examined the Budget 2017 USC costings, and are satisfied that the costings are as accurate as possible given the complexities involved in forecasting.
Furthermore, as part of the continuous efforts to improve the Department’s tax forecasting performance, the ESRI and my Department jointly examined the sensitivity of income tax and USC revenues to changes in income. As a result of this work, which was published in March 2017, the Department has revised the income tax and USC revenue elasticities used in the forecasting process. These new elasticities were used in the forecasts for 2018 and subsequent years in the 2017 Stability Programme Update published in April. However, it should be noted that a “back-casting” using the revised elasticities would imply a lower USC forecast for this year.
