The deficit in the public finances was €7.4 billion in July, which compares to a surplus of €896m recorded in July of last year.
The deterioration of €8.3bn was largely driven by increases in expenditure in response to Covid-19.
Overall tax revenues in July came to €4.29bn, down 18.6% or €983m compared to the same month last year.
Cumulative tax receipts, however, are down 2.5% compared to last year due to strong tax returns in January and February and a big increase in corporation tax recorded in June.
VAT receipts were down 30% compared to July last year, and down 22.7% in the year to date compared to the same period last year.
Income tax continued to fare better than expected with €1.59 billion collected in July, down 8% compared to July last year.
Meanwhile spending is up 29.5% or €8.662bn year-on-year.
This reflects increased spending in the Departments of Health and Social Protection in response to Covid-19.
The Minister for Finance said today's Exchequer figures are "exactly in line" with the Government's expectations.
Paschal Donohoe said that while the figures are stark in that they show that a surplus last year of €900m has swung into a deficit of nearly €8bn, it is a swing in line with what they expected, and how they expect the deficit to develop across this year.
"Overall, the Exchequer figures, while they show a really significant change on where we thought we were going to be at the start of the year, and a very big change on where we thought this particular month would look like, the level of deficit we now have is in line with what we expected earlier on in the year. It's in line with what we indicated in the July jobs plan."
WATCH: Minister for Finance Paschal Donohoe speaks to the media following the publication of the End July 2020 Exchequer Returns, which showed the deficit in the public finances was €7.4 billion in July | Read more: https://t.co/2Kw4agbHL1 https://t.co/gptbliEY9w— RTÉ News (@rtenews) August 5, 2020
Minister Donohoe said expenditure now stands at €38bn - an increase of 29.5% on this time last year.
He said most of this was concentrated on health expenditure, mainly on PPE, the private hospitals deal, and for welfare towards the PUP payment and the Temporary Wage Subsidy Scheme.
On taxation, Mr Donohoe said the country's performance was in line with expectations, with "some positive signals".
He said despite all the country has gone through with the pandemic, the total tax take was down 2.5% on this time last year.
Mr Donohoe said income tax at the end of this month is nearly unchanged versus this time last year.
He said this was down to strong performances in January and February, and across June and July. He said for July, it currently stands being down 8%.
Speaking on RTÉ's Drivetime, he said that the Government expects that the rate of unemployment moving into the second half of this year will be between 14% and 15%.
Mr Donohoe said he expects the unemployment level will fall further from where it stands now, but that the rate of that decrease will be slower than in recent months.
He said the assumption the Government has is that as we move into the later part of the year, unemployment will stand at between 14% and 15%.
He said this is a pandemic that has affected all countries in differing ways, and unlike a decade ago, other countries are experiencing even bigger difficulties than Ireland.
The minister said that a decade ago, we did not have the ability to invest in our economy as nobody would lend money to Ireland, which was not the case now.
In relation to the reopening of pubs, the minister said that the Cabinet could not find any alternative way of trying to keep the country safe given the changes of the Covid-19 situation here.
Mr Donohoe said unfortunately the spread of the virus has accelerated, and it is spreading into new parts of the country, with the median age of cases decreasing as well.
He said we are making "great progress" but the virus has changed versus where we were a week ago.