From Department of Finance; Department of Public Expenditure, NDP Delivery and Reform
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Tax receipts were €61.4 billion to end-September, up €3.5 billion or 6.1 per cent on an annual basis, driven by income tax, VAT, and corporation tax receipts.
At €23.1 billion to end-September, cumulative income tax receipts remains robust, up by 8.2 per cent on an annual basis, reflecting a labour market that is operating at full employment. On a quarterly basis, receipts of €7.6 billion were up by just under 7 per cent on last year and broadly in line with expectations.
VAT receipts to end-September stood at €16.8 billion, up by €1½ billion or almost 10 per cent on 2022. On a quarterly basis, receipts of €6.5 billion were up by €0.3 billion or 4 per cent on last year but slightly below target.
Corporation tax to end-September was €14.4 billion, up on last year, by €0.6 billion or almost 4½ per cent. However, the September returns represented the second consecutive month in which corporate tax declined year on year. As a result, corporation tax receipts in the quarter were down on profile by €0.7 billion, or 16 per cent, highlighting, once more, the extreme volatility in this revenue stream.
Total gross voted expenditure to end-September amounted to €64.4 billion, up by €5.2 billion or 8.7 per cent on 2022 and €0.4 billion or 0.7 per cent ahead of profile.
An Exchequer surplus of €1.1 billion was recorded to end-September. This compares with a surplus of €7.9 billion in the same period last year, with the bulk of the decline driven by the transfer earlier this year of €4 billion in windfall tax receipts to the National Reserve Fund.
Commenting on the figures, the Minister for Finance Michael McGrath said:
“The tax data to end-September demonstrate the need for caution as we finalise Budget 2024. The underlying strength of our economy remains evident in the steady growth in income tax and VAT receipts. However, the sharp underperformance of corporation tax is more evidence that, as I have warned many times, these receipts cannot be relied upon.
"This government has taken a number of important steps to address our exposure to corporation tax receipts, including transferring €6 billion in windfall receipts to the National Reserve Fund and committing €2¼ billion of windfall receipts to fund capital projects. In addition to this, work is at an advanced stage on proposals for a longer-term investment fund that will enable us to use some of these receipts to prepare for future fiscal pressures.
"Ultimately, however, the best way to guard against exposure to windfall receipts is by pursuing a budgetary policy that strikes the correct balance between addressing the challenges of today and ensuring our public finances remain sustainable over the medium-term: it is on that basis that Budget 2024 will be framed."
The Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe, said:
“Today’s publication shows expenditure of €64.4 billion in the first nine months of 2023; €5.2 billion higher than the same period last year.
"Through a balanced and planned approach to expenditure over the first three quarters of the year, we have invested in improving core services by increasing social protection payment rates, expanding service delivery with over 18,000 additional public servants and reducing the cost of childcare. Government has also sustainably increased capital and infrastructural investment under the National Development Plan delivering the roads, schools, hospitals and homes we need. These figures also reflect our ongoing response to emerging needs across society including through funding the accommodation of Ukrainian and International Protection arrivals.
"Preparations are currently underway for Budget 2024 which will deliver a clear vision for continuous improvement, building on the government’s commitment to delivering high-quality public services and infrastructure while ensuring the economy and public finances remain on a sustainable pathway.”