Government predict record tax revenue of €64 billion despite inflation pressures
Kenneth Fox
The latest exchequer figures show that the Government recorded tax revenue up to the end of October of €63.9 billion.
The figures released by the Department of Finance reveal an increase of 25 per cent on last year, although the annual comparison is flattered by a number of factors, including a lockdown in the opening months of last year
Income tax receipts up to the end of October amounted for €23.9 billion, up over 15 per cent on an annual basis.
Meanwhile, Corporation tax receipts were €16.2 billion during the same period an annual increase of €6.6 billion, while VAT receipts were €15.5 billion, up almost 23 per cent on an annual basis.
Total gross expenditure to the end of October amounted for €66.5 billion, €1 billion or 1.5 per cent below the same period in 2021, as a result of the unwinding of Covid-19 supports.
Gross current expenditure was €61 billion; €1.3 billion ahead of profile, reflecting additional priority funding for non-core supports including the cost of living measures, Civid supports and the State’s response to the war in Ukraine.
An Exchequer surplus of €7.3 billion was recorded up unto; to the end of October.
The Department said fiscal accounts do not yet reflect the full implementation of the Budget 2023 cost of living package and the transfer of €2 billion to the National Reserve fund.
Some important context to the improved position of our public finances, primarily driven by the high level of corporation tax collected in recent years. (1/5) https://t.co/lCwbvCTOOk
— Paschal Donohoe (@Paschald) November 2, 2022
At the time of the Budget, a small surplus was expected by end-year. However, when windfall corporation tax receipts are excluded, a significant deficit would be expected, the Department said.
At €4.5 billion, excise duty receipts were down two per cent on an annual basis. The much weaker performance of excise reflects, in part, government policy introduced to tackle increases in the cost of living.
Speaking about the figures, the Minister for Finance Paschal Donohoe said:"Today’s figures show that tax receipts remain strong at the start of the fourth quarter.
"However, the strength of potentially volatile corporate tax receipts continue to provide an artificially positive picture of the public finances.
"As I have warned on many occasions, while these receipts are welcome, it is imperative that that Government does not build up permanent fiscal commitments on the basis of revenues that may prove transitory.
"Budget 2023 was, of course, a ‘Cost of Living Budget’ focused on mitigating inflationary pressures.
"The government has aimed to strike a delicate balance between providing assistance to those suffering the most but without adding fuel to the fire of inflation, while ensuring that we retain sufficient firepower to respond to further challenges over the coming years."
