THE LATEST EXCHEQUER returns reveal tax revenues last month were nearly €1 billion lower than March last year – a decline of over 20%.
The decline in tax revenue is primarily down to a steep decline in VAT receipts which are half the level they were this time last year.
An Exchequer deficit of €2.5 billion was recorded in the first quarter of 2020. This compares to a deficit of €966 million in the same period last year.
Current spending is €15.8 billion in the first quarter of the year, which is just over €1 billion ahead of where the government expected to be. The bulk of that is in two departments – health and social protection.
Speaking about the potential impact on corporation tax, Minister for Finance Paschal Donohoe said this may be the area least affected by the pandemic.
He said many sectors that have generated our corporation tax flow in recent years “are part of sections of the global economy, the demand for which is likely to grow”.
Furthermore, corporation tax that will be paid in May of this year relates to activity last year, when these companies performed well.
CSO figures released this morning reveal there are over 500,000 people either on the Live Register or claiming a payment due to the Covid-19 pandemic now.
Minister Donohoe said he wanted to acknowledge that behind those figures today are “many hundreds of thousands of citizens who never anticipated they would be in a position where they have lost so much income, or they have lost a job”.
“I want to recognise that the speed with which that change has happened has been such a cause of additional anxiety to so many families, to so many businesses, and to so many citizens across our country here today,” he said.
Donohoe said his message to all of those people is that the government has a determination to build a “new economy” in which those impacted today can get back to work and can see their incomes grow again.
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