TAX REVENUES IN Ireland has bounced back after months of decline, with corporation tax collection levels well up on this time last year.
Ministers Michael McGrath and Paschal Donohoe issued a statement today reporting that a total of €15.6 billion was collected in November, €2.0 billion (14.7 percent) higher than in the same month last year.
They also reported that this year to date, corporate tax receipts amounted to €22.0 billion, which is €0.9 billion (4.2 percent) more than what had been collected by this time last year.
The Ministers said that this increase is a “sharp reversal” in the trajectory after three consecutive months of decline in the amount of corporate tax collected.
They said that November is an important month for corporation tax receipts as those collected contain returns from a number of large multinational taxpayers.
The Ministers said that November is the “key month” for income tax as it includes returns from self-employed taxpayers.
“The growth in these receipts during November means that total corporation tax revenues amounted to €22.0 billion in the year-to-date, €0.9 billion (4.2 per cent) ahead of last year. This is broadly in line with expectations as set out in Budget 2024,” their statement read.
Expenditure has also risen.
The total gross voted expenditure by the State as of the end of last month amounted to €82.4 billion, which is up by 9.9.% compared to this time last year.
The ministers said that this increase in spending reflects the supports provided by the State as part of the cost of living package announced in Budget 2024.
Income tax receipts are also up by 7.3 percent on last year.
In total tax revenues for this year so far have amounted to €82.4 billion, which is up €7.45 billion on the same period for last year.
The Irish State had an exchequer surplus of €5.4 billion at the end of November, which is €6.7 billion down on the same period last year.
The Ministers said in their statement that the decline in the surplus is reflective of “policy-driven” increases in public spending, as well as the transfer of €4 billion to the National Reserve Fund earlier this year.
Michael McGrath, Minister for Finance, said that the Exchequer returns from the end of November confirm that Ireland is fiscally, “broadly speaking, where we expected to be at this point in the year.”
He said that the stand-out feature of the November performance is corporation tax collection levels bouncing back after months of decline.
“A large increase in receipts this month means this revenue stream is once again comfortably ahead of last year,” McGrath said.
He added that though corporation tax is ahead of where we were this time last year, it is clear that the “era of persistent over-performances is coming to an end.”
He said that the volatility of corporation tax as a revenue stream highlights the importance of ensuring that the permanent fiscal commitments of the State are not “made on the basis of temporary receipts”.
McGrath said the establishment of two long-term savings vehicles – the Future Ireland Fund and the Infrastructure, Climate and Nature Fund – will use corporation tax windfalls to help finance “known future fiscal challenges, such as an ageing population, climate change, and digital transition”.
Minister for Public Expenditure Paschal Donohoe said that today’s figures reflect the Government’s “significant year-on-year increase in expenditure on public services”.
He said that the “growing level of resources” reflects the additional demand and complexity facing public services, and in particular the health and education sectors.
Donohoe said that the Government is “acutely aware” of the impact of increases in the cost of living and inflation right across the economy”.
He said that Ireland’s “strong economic performance” has allowed the Government to have a “responsive policy approach” to the economy, through the rollout of cost of living supports and additional social welfare payments.
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