Importance of the tax system during the pandemic

Mar 08, 2021

Minister for Finance, Paschal Donohoe TD, emphasised the important role that the structure of the Irish tax system has played during the pandemic in his speech, The Pandemic: One Year On, to the Economic and Social Research Institute (ESRI). He discussed that benefits of prudent economic management pre-pandemic will become evident once the pandemic monetary supports are phased out. 

The Minister discussed how the structure of the Irish tax system has not become dependent on “transitory, transaction-based taxes” and how the broad income tax base, with a progressive rates structure, has allowed tax revenues to hold up well during the course of the pandemic. Ireland’s total tax fell by three and a half percent, and notwithstanding the fall in employment, income tax fell by one percent last year. “None of this happened by accident”, the Minister said.

In the context of the Programme for Government, the Minister discussed the establishment of a Commission on Taxation and Welfare, which will review and make recommendations on the development of the taxation and social welfare system over the next 10 to 15 years.