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January tax revenue down almost €520 million on same month last year

An exchequer surplus was recorded last month, but the government said this will be “entirely reversed” in February.

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THE LATEST EXCHEQUER figures highlight the impact of the pandemic on the public finances, with a drop of almost 9% in tax revenue last month compared to January 2020. 

The figures released today shows tax revenues down by €520 million in January. 

Value Added Tax (VAT) receipts are down €340 million, or nearly 13% on last January. 

This reflects the implementation of additional Covid-19 restrictions in November and late-December, a government statement said. 

Excise duties also fell by €100 million, or by one-fifth compared to last January. 

The Finance Minister Paschal Donohoe said these figures “show the impact public health restrictions are having on consumer spending”. 

“January is usually the largest month for VAT receipts, but, as expected, due to restrictions in November and late-December this month’s figures are significantly down on last year,” Donohoe said. 

“Tax receipts will again suffer over the coming months as the effects of the current restrictions are felt.” 

As January is a VAT-due month, this has also led to a monthly exchequer surplus of €1.2 billion for last month. 

However, the government said this will be “entirely reversed” in February. 

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It said the 12-month rolling exchequer deficit is a better indicator of the state of affairs, and this currently stands at €12.7 billion.  

Overall voted expenditure was up in January by €6.3 billion, 11% higher than the same month last year. 

Expenditure from the Department of Social Protection increased by €800 million compared to the same period last year. 

The government said that January is an “outlier month” as it’s the last month in which the Pandemic Unemployment Payment (PUP) will be entirely funded by non-exchequer sources through the social insurance fund. 

This fund doesn’t impact the exchequer balance, but it does “worsen the general government deficit”. 

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