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Tax Collection

Dáil Éireann Debate, Wednesday - 31 March 2021

Wednesday, 31 March 2021

Ceisteanna (381)

Paul Murphy

Ceist:

381. Deputy Paul Murphy asked the Minister for Finance if he will explain his reported remarks on 4 March 2021 in which he warned of increased taxes post the Covid-19 pandemic; if he is considering specific tax increases; if so, the details of same; and if he will make a statement on the matter. [17200/21]

Amharc ar fhreagra

Freagraí scríofa

I understand the Deputy is referring to the speech I made at the ESRI on Thursday 4 March 2021, “Taking stock and charting an economic path forward for Ireland & Europe”, in which I addressed some of the main challenges facing the Irish economy over the short, medium, and long-terms.

The Government has provided an enormous amount of fiscal support in response to the Covid-19 and Brexit crises. With a value of almost €38 billion, or nearly a fifth of national income (GNI*), the budgetary support provided by Government has been extraordinary. A range of measures were put in place by Government to support people and businesses most affect by the financial shock of the pandemic. These include the COVID Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS). Businesses may also be eligible to warehouse VAT and PAYE (Employer) debts and also excess payments received by employers under the Temporary Wage Subsidy Scheme. The Covid Restrictions Support Scheme (CRSS), the Small Business Assistance Scheme for COVID (SBASC) and Tourism Business Continuity scheme have also been established in order to support those businesses most at risk, with significant cost to the Exchequer. Other schemes which have been established include the Live Performance Support Scheme (LPSS) and the Music Entertainment Business Assistance Scheme (MEBAS), both of which are targeted at supporting the commercial live performance sector. It is entirely appropriate that we have acted to support the economy in this way.

The current crisis is a once-in-a-century event. The fundamentals underlying our economy are strong. We started this crisis from a position of strength – a budget surplus, cash reserves and significant progress in lowering our debt. Therefore, public finances can absorb this shock, letting debt rise on a one-off basis in order to provide support to the economy.

We are committed to restoring the public finances to a sustainable trajectory and ensuring that Ireland does not become a fiscal outlier as we emerge from the pandemic period. It is expected that economic growth will do much to boost taxes and restore the public finances to a sustainable setting. Once the public health situation allows, pandemic supports must also be unwound in an appropriate and incremental way. But we must not forget that permanent increases in expenditure must be met by permanent increases in revenue. If the State is to have a larger footprint in the future, this must be paid for.

We are in a period of unprecedented uncertainty. Once the pandemic has passed and the temporary measures unwound, we will set out a clearer path towards eliminating the deficit over the medium term. With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy.

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