Over the past decade there has been a decisive shift away from direct taxation within the Irish system. In recent years, indirect taxes became the main stream of revenue for the Irish Exchequer. In 2005 receipts for VAT alone exceeded those for direct taxes in Ireland. The table below presents revenues by category for 2004-2008 in Ireland. Total indirect taxes (VAT; excise duty and stamp duty) in 2008, at €25.5 billion, exceeded direct tax, at €16.7 billion, by 34.5%. The over reliance on indirect taxes, particularly stamp duty, exacerbated the rate of economic decline following the crisis of 2008. Many indirect taxes are directly related to economic performance and are vulnerable to economic shocks. As a result, the unprecedented decline in the Irish economy led to a catastrophic collapse in the overall tax take.
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