Ireland tax receipts up 14% to €24bn year to date

Tax receipts in Ireland were €24.1 billion up to the end of April, up €3 billion or over 14% on an annual basis, driven by strong income tax, VAT, and in particular, corporation tax receipts.

That’s according to the latest figures from Ireland’s Department of Finance.

At €10.4 billion to end-April, income tax receipts remained solid, up 9.5% on an annual basis, “reflecting continued resilience in the labour market.”

At €3.5 billion to end-April, corporation tax receipts were up €1.3 billion “driven by the strong performance in the first quarter which may reflect, in part, a timing issue, that is, the earlier payment of receipts, but it should be emphasised that this is subject to considerable uncertainty.”

Ireland’s total gross “voted expenditure” to end-April amounted to €26.9 billion, €1.6 billion or 7.8% above the same period in 2022 and €0.1 billion or 0.5 % “below profile.”

“An Exchequer deficit of €3.7 billion was recorded to end-April 2023,” said the Department of Finance..

“This compares to a deficit of €1.1 billion in the same period last year. The deterioration in the Exchequer balance is due to the transfer of €4 billion to the National Reserve Fund (NRF) earlier this year.

“On a 12-month rolling basis, the Exchequer recorded a surplus of €2.4 billion.

“Excluding one-offs i.e. transfers to the NRF, proceeds from the disposal of bank equity and estimated ‘excess’ corporation tax receipts, an underlying exchequer deficit of approximately €4 billion was recorded on a 12-month rolling sum basis.”

Ireland’s Minister for Finance Michael McGrath said: “In particular, the solid growth in income tax demonstrates the resilience of the labour market.

“As I have stated previously, potentially volatile corporation tax receipts provide an artificially positive picture of the public finances at the current time.

“These receipts are, of course, very much welcome, and reflect well on Ireland as an attractive location for highly profitable multinational firms.

“However, it is important to note that corporation tax receipts are highly concentrated among a small number of companies and therefore cannot be guaranteed at current levels into the future. My department estimates that almost half of the corporate tax take is potentially ‘windfall’ in nature.

“This government’s prudent management of the public finances will help ensure that we are in a position of strength to meet the key challenges facing the economy over the coming years and we are taking steps to address the risks around ‘windfall’ corporate taxes.

“A total of €6 billion has now been transferred to the National Reserve Fund to strengthen our economic and fiscal buffers. I will shortly publish a scoping paper setting out high level principles regarding a long-term savings fund.

“Subject to government approval, this will require bringing legislation to the Oireachtas and work on advancing this proposal will continue to be undertaken by my officials in the period ahead.”