Irish Government revenue tops €100bn for first time

The Irish government’s total revenue surpassed €100 billion for the first time ever in 2022, rising €8.5 billion or 8.7% to €106.7 billion.

Total expenditure for the year was €101.7 billion.

An Exchequer surplus of €5 billion was recorded in 2022. This compares to a deficit of €7.4 billion recorded in 2021, an improvement of €12.4 billion.

The increase reflects strong growth in tax revenues and a decline in Covid-19 related expenditure.

“On a more comprehensive general government basis, this is consistent with a surplus of c. €5.2 billion, or 2 per cent of GNI,” said Ireland’s Department of Finance.

“Excluding estimates of windfall corporation tax receipts, this is consistent with an underlying general government deficit in the region of €5¼ billion.”

Tax revenue in 2022 stood at €83.1 billion, which was €14.7 billion or 21.5% ahead of the same period last year.

The increase was driven by strong growth in income tax, VAT and in particular, corporation tax.

Income tax receipts in 2022 amounted to €30.7 billion, up 15% on 2021.

Corporation tax receipts amounted to €22.6 billion, nearly 50% higher than a year earlier.

For the first time ever, corporation tax receipts were the second-largest source of tax revenue.

“That said, a significant part of this revenue stream is expected to be once-off in nature,” said the Department of Finance.

Minister for Finance, Michael McGrath T.D. said: “The end-2022 Exchequer figures show a large headline surplus was recorded last year.

“This reflects a number of factors, including robust income tax and VAT receipts, both of which reflect the strength of the post-pandemic recovery in demand and employment. The phasing out of Covid-related expenditure is another reason for the surplus last year.

“By far the most important factor behind the headline surplus is the strength of corporation tax revenue – receipts from this source have doubled since just before the pandemic.

“My Department estimates that around half of these receipts are potentially at risk – if these receipts were excluded, we would instead be facing a significant deficit. That is why Government has acted to mitigate this vulnerability by transferring part of this windfall to the National Reserve Fund to rebuild our fiscal resources.

“It is also important to stress that today’s figures are, of course, backward looking. They do not offer a guide as to the challenges that we will have to address going forward. Keeping the public finances on a sustainable trajectory puts us in the best position to meet these future challenges. That is what this Government will continue to do.”

The Minister for Public Expenditure, National Development Plan Delivery, and Reform, Paschal Donohoe T.D. said: “Today’s figures demonstrate the significant support provided by Government throughout 2022. While the challenges of the pandemic began to recede other challenges have emerged.

“These challenges required a flexible approach to budgetary policy throughout 2022, with additional funding allocated where required. Additional supports have been introduced for people, households and businesses to assist them with the impact of increasing prices.

“Humanitarian supports have been put in place to welcome and provide for those arriving from Ukraine. This response was made possible by the strong position of our public finances.

“Looking forward the 2023, Revised Estimates have provided gross expenditure of over €91 billion.

“This will allow us to fund our public services to meet the challenges arising from Covid and the war in Ukraine, while also providing key investment to enhance public services, our education and healthcare systems, and our infrastructure including housing and transport networks.”