Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 86: To ask the Minister for Finance his views on whether the heavy reliance on revenue from VAT leaves the State unduly vulnerable to a sharp contraction in Government revenue in the event of a downturn in the property market or in the case of a sharp growth in interest rates and a consequent reduction in consumer spending. [24837/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Exchequer receipts from VAT have varied between 30 and 31 per cent of total tax revenues over the past 4 years notwithstanding the growth in the property market and in the economy generally over this period. While the proportions of total tax revenue accounted for by particular tax heads can vary over time, the Exchequer is not significantly more reliant on revenues from VAT now than in previous years.

Tax revenues from whatever source are ultimately dependent on the level and composition of economic activity. A negative shock to the economy would be likely to have an adverse impact on tax revenues. The extent of any fall in tax revenues resulting from a downturn in the property market or from a slowdown in consumer spending would depend on the extent and nature of the downturn.