Corporation tax in October almost €1bn ahead of target
The public finances continued to recover last month, according to the latest Exchequer figures from the Department of Finance.
There was an Exchequer deficit of €7.438 billion recorded at the end of October, an improvement of just over €4 billion on the deficit recorded over the same period last year.
Tax revenue continues to come in ahead of expectations, particularly corporation tax.
Overall, tax receipts to the end of October were ahead of target by €3.8 billion or 8.1%, and they are up over the same period last year by almost 20%.
Spending is almost €2.5 billion or 3.5% behind target.
Corporation tax of €1.494 billion was collected in October, almost a billion euro ahead of target and down to what the Department describes as ‘larger than profiled payments from the life sciences sector’ which is not expected to be repeated in future years.
Just under €300 million of corporation tax receipts relate to tax settlements.
VAT receipts are ahead of target by €785 million or 6.6%, driven by the recovery in consumer spending.
An unlikely consequence of Brexit also appears in the figures, with customs receipts to the end of October almost doubling to €403 million.
Goods coming via the UK, which are not made there, are now subject to customs duties.
“Corporation tax receipts in October were higher than expected, once again illustrating the inherent unpredictability and volatility of this revenue stream,” Minister for Finance, Paschal Donohoe said in a statement.
“Despite the further clarity that now exists with international tax reform, there is still a high level of uncertainty in relation to its impact on Ireland,” he added.
Minister Donohoe said the best form of defense against any negative impact is to have “strong and stable” public finances.
“Budget 2022 set a framework within which we can reduce the deficit and restore the public finances, while continuing to invest heavily in public services, particularly in capital infrastructure,” he said.
Minister for Public Expenditure and Reform, Michael McGrath said gross voted expenditure at the end of October totaled over €67 billion – almost €2 billion ahead of expenditure levels for the same period last year.
“Current expenditure stands at almost €62 and a half billion, with nearly 82% of this, some €51.1 billion, relating to spending in the Departments of Education, Social Protection, Health, and Further and Higher Education, Research, Innovation and Science,” he said.
“This reflects the Government’s continued focus on protecting the most vulnerable in society and prioritising core social services against the impacts of Covid-19,” Minister McGrath said.