Government taxes almost doubled in 10 years

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Government tax revenues have nearly doubled since the low point of the 2010 crash, according to the latest records from the chessboard.

They show that the government collected a record 59 billion euros in taxes last year, exceeding the 2018 performance by 6.8% or 3.75 billion.

This is almost double the 31 billion euros collected in 2010, highlighting the recovery of state finances.

The finance ministry said last year’s tax revenue was also € 1.4 billion above expectations, thanks to a further large inflow of corporate taxes.

Business tax generated a record 10.9 billion euros in 2019, 1.4 billion euros above profile, and is now the government’s third largest tax category.

This strong performance will allow the government to generate a budget surplus of around 1.5 billion euros for 2019, which corresponds to around 0.4% of GDP, against 0.2% expected in October.

Finance Department chief economist John McCarthy said the € 1.5 billion surplus would be used to increase the cash balances of the state debt management agency, the National Treasury Management Agency (NTMA).

“Ultimately when it works in the system, it will reduce the debt than it would otherwise have been,” he said.

The government aims to achieve a surplus of 1% of GDP by 2022, equivalent to 3.6 billion euros per year.

Corporation tax

Finance Minister Paschal Donohoe said, “Managing budget surpluses is the first line of defense against our over-reliance on corporate tax revenues. In other words, “excess” corporate tax revenues are not used to finance current spending but to reduce debt. “

The Irish Fiscal Advisory Council (IFAC) criticized the government for using excess or potentially temporary tax revenue to cover loopholes in its spending plans.

On the outlook for corporate tax, Mr McCarthy said he expected revenue to rise again this year, but start stabilizing in 2021 due to changes in international tax rules.

The latest statements show that income tax, the government’s biggest tax item, has generated just under 23 billion euros, as expected, but that’s almost 1.7 billion euros or 8 % more than last year, reflecting strong employment growth in the economy.

VAT, which reflects conditions in the retail sector and general consumer spending, also hit the € 15.1 billion target for the year, but rose 6% or 883 million euros year-on-year.

Non-tax revenue for the year amounted to € 3.35 billion, up € 443 million, supported by the increase in Central Bank surpluses of € 2.38 billion.

Irish double

During the year, gross voted spending on utilities and infrastructure totaled € 67.4 billion. Current spending amounted to € 60 billion, while capital spending increased 22.5% to € 7.4 billion.

Health spending amounted to just over 17 billion euros, including an overrun of 334 million euros, compared to an overrun of 650 million euros in 2018.

The release of the chessboard returns came just after Google’s parent company Alphabet said it would no longer use the intellectual property licensing practice known as the “Dutch Irish Double Sandwich”. The tax loophole allows companies to set up in the Republic, while being tax residents elsewhere. Indeed, this has allowed these companies to channel billions of euros in profits through the Republic and to entities incorporated in Ireland elsewhere.

Donohoe told RTÉ on Friday that the impact of closing the loophole in the middle of the last decade has already rippled through our tax affairs.

“But I think that the increases that we have seen, we cannot count on them in the future and that is why, on the one hand, increasing the surplus that we are announcing today is an imperative and on the other On the other hand, also increasing the number of people who work in the different types of jobs that they have will become even more important, and we have more people at work in different types of work, and it is also an insurance policy very important for this type of risk, ”he said.


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