Ahead of the budget I’m throwing out a few facts and figures about where we are now, and where Budget 2015 needs to take us. The following shows the government’s tax take over the last ten years and where it has changed over time.

The above graph shows the trend of tax income in the period 2004 to 2013. When the value of all tax revenue fell between 2007 and 2010, income tax  was increased in order to address the deficit. This happened as income was one of the few areas in which it was possible to generate revenue.

Taxation pre-2007 was focused heavily on transactions to generate revenue. During the economic crisis, these revenue streams fell rapidly as consumer confidence dropped. The introduction of the property tax is an attempt to broaden the tax base, and move from a transaction based tax system towards one based on transactions and assets. If employment and consumer confidence continue to improve, the pressure to generate revenue through income tax and VAT will decrease. And, in theory the broadening of the tax base to include assets should encourage those who are sitting on assets to consider liquidating them. This freeing up of capital should further stimulate the economy. Whether it pans out that way awaits to be seen…

Source: Department of Finance