The Government's tax take in March fell by almost a billion euro compared to the same month last year.
Figures from the Department of Finance show VAT receipts were half the level they were last year, demonstrating the difficulties faced by businesses during the coronavirus pandemic.
The State also spent 7.6% more than it planned, as measures were introduced to deal with the Covid-19 emergency.
Overall in the three months to the end of March an Exchequer deficit of €2.5bn was recorded.
Minister for Finance, Paschal Donohoe, said it shows how the Covid-19 pandemic is affecting the country's finances.
Minister Donohoe said: "Tax revenues are set to decline steeply over the coming months. On the expenditure side, the Government has put in place significant resources to help fight this virus.
"Thanks to appropriate budgetary policy over recent years, we meet this challenge from a position of strength – a budget surplus, cash reserves and significant progress in lowering our debt.
Today's Live Register figures from the Central Statistics Office saw the total number of people in receipt of payments is now over 500,000 when pandemic payments are included.
Minister Donohoe said it was expected "given the massive short-term disruption to economic activity that is necessary to preserve livelihoods".
He said: "The Government is making these income supports available to cushion the economic shock.
“I think it is important to stress that the steep fall in economic activity is not due to imbalances such as credit growth; indeed, it is widely acknowledged that the economy was in good shape until immediately before the pandemic.
"Therefore, once the virus is under control, it is expected that the economy can and will recover quite rapidly.
"The Government is working to ensure that there will be minimum reduction to productive capacity, so that firms and workers can resume economic activity as soon as possible.”