A RECORD HIGH €5 billion worth of corporation tax was collected by the Government last month, with Finance Minister Paschal Donohoe continuing to caution the “volatile” receipts.
According to the latest Exchequer returns, tax revenues to the end of November have reached €77.5 billion, up by €15.2 billion compared to the same period in 2021.
This represents a 24% rise in overall tax revenues, with corporation tax in particular seeing a large increase.
The Department of Finance have said that €21.1 billion in corporation tax has been taken in at the end of November. This is up by €7.6 billion compared to the same period in 2021.
In November alone, €5 billion worth of corporation tax was collected by the Government, rising from the €4 billion collected in November 2021.
Finance Minister Paschal Donohoe had previously warned about the volatility of corporation tax receipts, with the total amount of tax collected doubling over the last five years.
November itself is the largest tax collection month of the year, with the Department saying it is the most important for corporation tax and income tax, due to it being the deadline for self-employed income tax payments.
On income tax, €4.4 billion was collected by the Government last month, which is up by €0.6 billion compared to the same period in 2021. The Department says that this is due to “continued increases in earnings as well as the strength of self-employed income”.
So far in 2022, €28.3 billion worth of income tax has been collected, which is up nearly 16% compared to 2021.
VAT receipts have also increased by 22%, rising to €18.5 billion due to the recovery in consumer spending following the pandemic.
Excise duty receipts, however, were down 5% on an annual basis, accounting for €5 billion at the end of November. According to the Department, this is due to policy measures, including excise cuts to petrol and diesel, introduced to assist with the rising cost-of-living.
Overall, a surplus of €12.1 billion was recorded over the year to end-November 2022, which includes the Government’s transfer of €2 billion to the National Reserve Fund.
However, the Government has said that the final surplus at the end of 2022 will be much lower, due to December being the biggest month for expenditure and accounts do not yet reflect measures within the Government’s Budget cost-of-living package.
Speaking on the publication of the figures, Donohoe said that tax receipts do remain “robust” but issued a warning on corporation tax.
“Today’s figures show that tax receipts remained very robust to end-November. The ongoing strength in income tax, in particular, is a positive signal of the continued momentum in the labour market,” Donohoe said.
“However, the strength of potentially volatile corporation tax receipts provides an artificially positive picture of the public finances.
“Corporation Tax collected this year will be double the level in 2019 and around five times the level a decade ago. If windfall corporation tax receipts were excluded a significant deficit would be in prospect this year.”
Under the rolling 12-month Exchequer surplus, Ireland currently has a €6.2 billion surplus. However, if excluding the bumper corporation tax receipts, Ireland would face a deficit of approximately €5 billion on a 12-month rolling basis.
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