Post budget 2020 analysis

Post budget 2020 analysis Robert Sweeney

Storm clouds are gathering • No-deal Brexit • Overheating • Indebtedness • Corporate tax and fiscal policy

Gross debt 2018 (%GDP) 200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0

20.0 0.0

Sources: Eurostat & CSO

Interest payable 2018 (%GDP) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

Sources: Eurostat & CSO

Interest payable (%GNI*) 7

6

5

4

3

2

1

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Sources: Eurostat & CSO

Structure of taxation 100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Corporation tax

PRSI

Income tax

VAT

Other

Source: OECD

Structure of composition Total exc. CIT

CIT

Total exc. CIT % GNI*

CIT % GNI*

2013

52938

4270

38.6

3.1

2014

57456

4614

38.6

3.1

2015

62244

6872

38.3

4.2

2016

65022

7351

37.0

4.2

2017

68399

8201

37.2

4.5

2018

73735

10385

37.3

5.3

Sources: Revenue & CSO

Extra revenue under different scenarios Constant % of GNI* (€bn)

40% GNI* in 2018 (€bn)

2013

-

-

2014

0.0

0.4

2015

0.6

1.5

2016

2.9

4.2

2017

2.7

4.6

2018

2.6

5.2

Sources: Calculations based on Revenue & CSO

Conclusion • Scope for borrowing • Tax cuts in recent times have increased reliance on CIT