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Finance Minister Michael McGrath Sam Boal/RollingNews.ie
windfall

Corporation tax up 71% in the first quarter of 2023 - but half of it is 'unlikely to be permanent'

However, Finance Minister Michael McGrath has said around half of that tax take is unlikely to be permanent.

CORPORATION TAX RECEIPTS for the first quarter of 2023 are up by 71% from the same period last year.

Corporation tax brought in €3.2 billion in the first three months of this year, an increase of €1.3 billion from the same period in 2022.

However, Finance Minister Michael McGrath has said around half of that tax take is unlikely to be permanent.

Figures published today show that tax revenues in the first quarter of 2023 amounted to €19.7 billion, almost 15 per cent higher than last year.

McGrath said in a statement: “Once again, corporate tax receipts have surprised on the upside, though my officials estimate that around half of the corporate tax take is unlikely to be permanent.

“It is, of course, essential that windfall corporation tax receipts are not used to fund permanent expenditure. This is why I transferred €4 billion to the National Reserve Fund in February – there is now €6 billion in the Fund.”

Income tax receipts of €7.4 billion were collected, up 8 per cent from the same period last year.

VAT receipts totalled €6.8 billion in the first quarter of the year, up 16 per cent on an annual basis. The Department of Finance said, however that this comparison is distorted due to a technical factor which boosted receipts.

Total gross voted expenditure to the end of March amounted to €19.8 billion – an increase of €0.9 billion, or 4.9%, from the same period in 2022.

An Exchequer deficit of €2.1 billion was recorded in the first quarter, although the Department said that this is due to the transfer of €4 billion to the National Reserve Fund in February.

McGrath said: “The strength of income tax shows that the labour market remains resilient, while VAT receipts suggest consumer spending remains reasonably solid.

Minister for Public Expenditure and Reform Paschal Donohoe said in a statement: “Current day-to-day spending increased by 3.5 per cent in Quarter 1. This demonstrates the implementation of Budget 2023 measures.

“This includes the expansion of critical services in areas such as childcare and health, supporting our public service workforce and helping to support living standards of our population.”

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