Overall tax revenue to end of September just under €58bn
Overall tax revenue for the first nine months of the year came in at just shy of €58 billion, the latest Exchequer Returns from the Department of Finance show.
It was up over a quarter on the same period last year.
All of the tax headings performed strongly with income tax receipts up 16% on an annual basis to €21.4 billion.
Corporation tax receipts amouned to €13.8 billion for the first nine months – representing an annual increase of almost €5.8 billion.
VAT receipts exceeded €15 billion, up 23% compared to the first nine months of 2021.
Total voted expenditure amounted to €59.2 billion, down 2% on last year which was mainly accounted for by the unwinding of Covid supports.
The exchequer surplus came in at €7.9 billion at the end of September.
On a rolling 12 month basis, it amounted to €6.8 billion.
“The strength in income tax, in particular, is a positive signal of the continued momentum in the labour market,” said Minister for Finance, Paschal Donohoe.
“However, the strength of potentially volatile corporation tax receipts provides an artificially positive picture of the public finances,” he added.
“To be clear, these receipts are, of course, very much welcome, and reflect well on Ireland as an attractive location for highly profitable multinational firms.
“But, as I have warned many times, these receipts are highly concentrated among a small number of companies and, as such, are subject to extreme potential volatility and cannot be guaranteed at current levels into the future,” he added.
He said the Department estimates that excess corporation tax receipts – that is the amount that cannot be explained by underlying drivers and, therefore, may be more vulnerable to a shock – could amount to somewhere in the region €8-10 billion this year.
“If these ‘windfall’ receipts were excluded a significant deficit would be in prospect this year,” he said.
“In order to rebuild our fiscal buffers we will start replenishing the National Reserve Fund with some of these excess receipts. This year €2 billion will be directed into the Fund. Next year, €4 billion will be transferred,” he added.
Commenting on today’s Exchequer tax receipts for September, Tom Woods, Partner and Head of Tax in KPMG said that cumulative corporation tax receipts for the year to date are now 71% ahead of last year.
“This suggests that the Government is on track to collect a projected record €20 billion in corporation tax in 2022, albeit that the biggest corporation tax-payment month of November is yet to come,” he said.
“VAT receipts for the year to date are €15.28 billion, ahead of pre-pandemic VAT receipts of €12.3 billion for the same period in 2019. Despite the fall in consumer confidence, VAT receipts appear to be benefiting from price inflation,” he said.