There has been a 2% decrease in the number of people employed in the agriculture, forestry and fishing sector in 2020 compared to 2019, according to the government’s Annual Taxation Report 2021, which has been published today (Tuesday, August 10).
The Annual Taxation Report 2021 is the Department of Finance’s fourth such report and aims to provide a long-term, strategic perspective on the evolution in taxation receipts since the financial crisis.
The department has said that the aim is to monitor the sustainability of tax revenues so as to minimise fiscal vulnerabilities.
The 2021 report focuses on the impact of the Covid-19 pandemic on tax revenues, with a particular emphasis on the key structural features of the income tax system.
Agriculture, forestry and fishing
The report shows that between 2019 and 2020 there was a 2% decrease in people working in the agriculture, forestry and fishing sector.
According to the department, the sectoral data was sourced from administrative data (Revenue Commissioners) rather than survey data (Labour Force Survey, CSO); the reason for this is that survey-based data – which is compiled in line with international
standards – does not fully capture the labour market impact of the pandemic.
On this basis, aggregate employment fell by 4% last year but the aggregate hides a multitude of differences e.g. employment losses were particularly severe in contact-intensive sectors such as accommodation, food and entertainment.
Elseways, job losses were more limited in sectors most conducive to remote working such as ICT or finance.
Unsurprisingly, the health sector was the only one in which employment growth was recorded.
Covid-19 supports schemes
The report also indicates that almost 2% of employers in the agriculture, forestry and fisheries sector availed of the government’s Employee Wage Subsidy Scheme (EWSS) during the pandemic period.
This compares to the accommodation and food sector which saw almost 18% of employers availing of the EWSS.
Almost 5,000 people from the agriculture sector availed of the Pandemic Unemployment Payment (PUP) last year compared to 80,000 people from the accommodation and food sector.
Tax revenues from agriculture
According to the Department of Finance report, the agriculture sector accounted for about 1% of all employees in 2020, largely in line with the previous year.
However, despite making up just 1% of employees, the agri sector contributed 2% of all tax paid.
Annual Taxation Report 2021
According to the department, the report demonstrates that “Ireland’s tax system, following policy reforms to address the effects of the global financial crisis a decade ago, exhibits compositional differences that have made revenues less vulnerable to external shocks”.
However, the department notes that significant vulnerabilities remain – most notably, but not limited to, the concentration of corporation tax receipts among a handful of large payers.
Minister for Finance Paschal Donohoe said: “This report offers valuable insight into the performance of our tax receipts last year and the impact on the public finances.
“The Covid-19 pandemic and associated public health measures had a relatively muted impact on overall taxation receipts – relative to the impact on the labour market – largely due to resilience in income tax, which fell only 1% year-on-year.
“This is attributable to the progressivity of the income tax system and the sectoral nature of the [Covid-19] shock, with the most affected sectors dominated by employees towards the lower end of the wage scale and that were, as a result, largely outside the income tax net,” he concluded.