Business

Tax revenue down by €2.1bn, expected deficit climbs to €19bn

Minister for Finance Paschal Donohoe.

The Department of Finance is now expecting an exchequer deficit of €19 billion for 2020 as tax revenues fell by €2.1 billion.

The introduction of Covid-19 restrictions led to VAT receipts dropping by €2.7 billion, marking an 18 per cent decrease on the figures from 2019, while excise duty returns fell by €500 million, down 8 per cent on the previous year.

Income tax receipts also saw an annual decline of €224 million, but this figures was smaller than expected due to strong PAYE and self-employed returns.

The only major tax to see an increase in 2020 was corporation tax, which was up €945 million or nearly 9 per cent on 2019.

The total net voted expenditure last year was €67.8 billion, a 25 per cent increase on the previous year, largely due to the costs associated with the handling of the pandemic.

Just under €5 billion was spent on the Pandemic Unemployment Payment (PUP) in 2020, along with €4.1 billion spent on the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS).

The Exchequer deficit of €12.3 billion, an increase of €13 billion on 2019, will contribute to the overall government deficit of €19 billion for 2020.

Minister for Finance Paschal Donohoe said the 2020 returns illustrate the scale of the Government’s response to the Covid-19 pandemic, adding the “depth and strength” of the response was “unprecedented in out country’s history”.

“Although we once again enter a difficult period of tough but necessary restrictions, today’s figures point to some positive underlying trends in the economy.

“The Government will continue to use the resources of the State to protect the most vulnerable, support businesses and sustain incomes until our country emerges from this pandemic even stronger than before,” Mr Donohoe said.

Source:

www.breakingnews.ie

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button