Revenue down €1.5 billion between Q2 and Q3
The Government deficit stands at €16.9 billion for first nine months of 2020, due to a combination of increased expenditure and lower revenues, new CSO quarterly figures show.
Total Government revenue in Q3 2020 stood at €19.6 billion, down €1.5 billion (7.2%) on Q2 2020.
Social benefits
Total Government expenditure for Q3 2020 was €27 billion, down €284 million on Q2, a decrease of 1%, mainly due to a reduction in payments of social benefits and subsidies.
Payments of the Pandemic Unemployment Payment (PUP) in Q3 2020 were €1.1 billion, down from €2.5 billion in Q2, while payments for the Temporary Wage Subsidy Scheme (TWSS)/Employment Wage Subsidy Scheme (EWSS) also decreased, from €1.7 billion in Q2 2020 to €1.3 billion in Q3.
Commenting, statistician Tom Fitzgerald said: “When comparing Q3 2020 to Q2, we can see total government revenue at €19.6 billion, down €1.5 billion or 7.2% on Q2 2020. This decrease was mainly due to a €3 billion fall-off in direct taxes (income tax and corporation tax) which outweighed an increase in indirect taxes of €1.8 billion.
“We can also see that total government expenditure for Q3 2020 was €27 billion, down €284 million on Q2 2020, a decrease of 1%."
Driver
“The main driver behind this decrease was a reduction in payments of the Pandemic Unemployment Payment (PUP), the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS).
“PUP payments were down from €2.5 billion in Q2 2020 to €1.1 billion in Q3 2020, while TWSS/EWSS payments also decreased from €1.7 billion in Q2 to €1.3 billion in Q3 2020.”
When comparing the first nine months of 2019 with the first nine months of 2020, he further commented: “Government expenditure for the first nine months of 2020 was up €11.8 billion compared to the same period in 2019, an increase of 18.5%, while Government income dropped by €3.1 billion, a decrease of 5.1%."
Decrease in indirect taxes
Tax revenue for the year to Q3 2020 was down by €2.2 billion or 4.9%, primarily due to a €3.3 billion (15.7%) decrease in indirect taxes (which includes VAT).
However, direct taxes (including income tax and corporation tax) showed an increase of €1.1 billion or 4.7%.