The Irish Tax State and Historical Legacies: Slowly Converging Capacity, Persistent Unwillingness to Pay

The historical tax state in Ireland prior to independence was characterised by low administrative capacity, a regressive tax structure, and popular resistance to taxation. We chart the impact of this history for both formal institutions—the revenue authority’s administrative capacity—and informal institutions—norms and attitudes towards taxation. We argue that, in terms of formal institutions, a historical legacy of administrative weakness has meant that, compared to other European countries, there have been lags in the adoption of modern tax practices and administration. However, significant reforms in the 1990s turned the Irish Revenue Commissioners into an impressive institution on par with tax authorities in other countries. While administrative capacity has converged with other OECD member states, the second legacy of resistant attitudes towards taxation has been harder to erode. Unwillingness to pay has been a theme in Irish tax politics and has constrained successive governments in their attempts to create a sustainable revenue base. The Irish case suggests that historical legacies may persist or subside at different rates in formal and informal institutions, with attitudes towards taxation proving more persistent.