Irish Tax Revenues Fall by 19%
January 6, 2010 Taxation in Ireland
Ireland’s total tax collections fell by €7.7 billion to €33 billion in 2009.
Figures released by Ireland’s Department of Finance show that the country’s economy and tax revenues are still reeling from last year’s financial crisis, though the situation is experiencing marginal improvements. According to the Exchequer Statement released on January 5th, tax collections for the 12 month ending in December were 3.9 percent lower than the Department’s targets, and down by 19 percent compared to 2008. Although the Exchequer deficit for the year was lower than expected, at €24.6 billion.
In 2009 only Corporate Tax and Excise duty collections exceeded government projections, rising by 4.3 and 1.4 percent, respectively, though in comparison to 2008 the figures dropped by 23 and 13.6 percent. Net government expenditure reached €47 billion, 50 basis points below expectations.
Value Added Taxes (VAT) experienced the largest difference between projections and collections, with a €750 million disparity, and a €2,760 million fall compared to 2008. Income Taxes were €640 million below the Department of Finance’s targets and €1,342 million below 2008 collections
Brian Lenihan, Ireland’s Minister for Finance, interpreting the figures in a generally positive light, said “…given the small improvement in the actual deficit over that anticipated in the December Budget we face into this year’s task with a greater sense of confidence. The challenges we face are great but the Government is committed to the targets set out in the recent Budget”. He went onto claim that economic growth will return to Ireland in 2010 and that this will lead to improved tax collections.
Photo by Darragh Sherwin