Pearse Doherty (Donegal, Sinn Fein)
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43. To ask the Minister for Finance if the cost of the reduction of USC in budget 2017 was underestimated in view of the Exchequer figures; and if he will make a statement on the matter. [31452/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Cumulative Exchequer income tax receipts at end-June 2017, were slightly below profile, by 0.5% or €110 million.  Specifically, in relation to Universal Social Charge receipts at end-June were approximately 4.8% or €83 million below expectations.

As the Deputy may be aware, officials from my Department and the Revenue Commissioners have been reviewing the USC performance.  As part of the review, my Department and Revenue have re-examined the Budget 2017 USC costings, and are satisfied that the costings are as accurate as possible given the complexities involved in forecasting. 

Furthermore, as part of the continuous efforts to improve the Department’s tax forecasting performance, the ESRI and my Department jointly examined the sensitivity of income tax and USC revenues to changes in income. As a result of this work, which was published in March 2017, the Department has revised the income tax and USC revenue elasticities used in the forecasting process. These new elasticities were used in the forecasts for 2018 and subsequent years in the 2017 Stability Programme Update published in April.  However, it should be noted that a “back-casting” using the revised elasticities would imply a lower USC forecast for this year.