The Independent Authority for Fiscal Responsibility (AIReF) has published an update to its Technical Document on tax revenue variability, analysing the factors driving revenue growth since 2019.
Specifically, AIReF distinguishes six components that affect revenue: the real component (linked to economic performance), the price component, the component associated with the increase in the average effective income tax rate without changes in the tax rate, a component that groups together various taxation elements, the measures component (which reflects the impact of regulatory changes, whether temporary or permanent), and a component of unexplained variability, which groups together variations that are not attributable to economic activity, tax structure or regulatory changes.
