Galway Bay fm newsroom - VAT and similar taxes could fall by up to 6.7 billion euro this year because of Covid-19.
The warning comes from the Economic and Social Research Institute.
The research looks at the decline in household spending caused by the pandemic and the effect it has on indirect tax revenue.
It focuses on three different scenarios that could happen over the rest of the year - a new normal, with ongoing social distancing; a second wave of infections later this year; and a vaccine that allows normal economic activity to resume in the final quarter of the year.
If there's a vaccine, the ESRI suggests household spending could fall by nearly 12 per cent.
But if a lockdown is reintroduced for 12 weeks from October, the research suggests household spending would fall by 20 per cent.
This could result in a revenue reduction of between 3.9 and 6.7 billion in 2020.
