Ireland has seen a substantial increase in tax revenue since Brexit, with customs duties on imports from Great Britain nearly doubling. This €700 million (£600 million) windfall highlights the economic consequences of the UK's departure from the European Union.
Prior to Brexit, Britain and Ireland enjoyed tariff-free trade as members of the EU's single market and customs union. However, Boris Johnson's decision to pursue a hard Brexit introduced new trade barriers, including controls, inspections, and duties on goods moving to the EU.
Irish data reveals a 90% increase in customs duty receipts between 2020 and 2021, the year Brexit took effect. Even accounting for pandemic-related trade fluctuations, revenue from customs duties has continued to climb significantly over the past three years.
The Source of Increased Revenue
The Irish Revenue Commissioners report, released on Friday, noted that while imports from China also incur duties, the sheer scale of this revenue increase is directly linked to Brexit. "Great Britain was the top country of dispatch for both customs duties and the value of imported goods," the report stated. Duties stemming from imports from Great Britain comprised nearly half (45%) of Ireland's total customs duties collection last year.
Understanding the Impact
David Henig, director of the UK Trade Policy Project at the European Centre for International Political Economy, notes the potential for both positive and negative interpretations of these figures. "It could be seen as good news for Ireland," he said. "But there is a bit of bad news there which points to the costs of Brexit, and the question of who is paying for the customs duties – is it coming off profits of exporters or is it being passed on to the consumer in the price of clothing and food?"
Further analysis suggests that some of Ireland's tariff revenue increase stems from non-EU goods being held in Great Britain for distribution within both markets. This means Ireland is now collecting duties that would have previously gone to the UK.
EU-Wide Implications
While Ireland's proximity to Great Britain likely amplifies the effect, the Brexit-driven rise in customs duties is expected to be seen throughout the EU.
