Excess corporation tax receipts used to improve end-of year surplus, better positioning Ireland for risks ahead
Total taxation receipts in 2019 were €59.3 billion, up 6.8 per cent from a year earlier and driven by strong growth across all major tax heads;
Taxation receipts for last year came in €1.4 billion ahead of original expectations, due to a very strong corporation tax performance;
The over-performance in tax receipts will likely result in an overall general government surplus of 0.4 per cent of GDP (around €1½ billion) for last year, an upward revision from the 0.2 per cent of GDP surplus set out in October;
The 2019 receipts, in particular the performance of corporation tax, highlights the need to continue the policy of running successive surpluses to safeguard against the inevitable reduction in returns from this source.
The Government aims to achieve a surplus of 1 per cent of GDP by 2022 and to maintain it over the medium-term – this should see our debt-GNI* ratio fall to 85 per cent by the mid-part of this decade.
Taxation receipts for 2019 amounted to €59.3 billion, the highest level ever and nearly €1.4 billion above the original forecast. Across the main tax headings, receipts were in line with expectations with the notable exception of corporation tax receipts, which were €1.4 billion ahead.
Welcoming the figures, the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D., said:
“Reflecting the growing economy and increased employment, last year was another strong year for tax receipts. Combined with well-managed expenditure increases, these tax receipts mean a budgetary surplus of 0.4 per cent of GDP for last year.
“Running budgetary surpluses is the first line of defense when it comes to our over-reliance on corporation taxation receipts. Our aim is to build on this, achieving a surplus of 1 per cent of GDP by 2022 and maintain that over the medium-term – subject to continued economic growth. In other words, ‘excess’ corporation tax receipts are not being used to finance day-to-day spending but to reduce debt.”
Notes to editors:
The forecast for tax revenue was set out in Budget 2019 (in October 2018).
The general government outturn for 2019 will be reported by the Central Statistics Office in April 2020.
Tax revenue last year amounted to €59.3 billion.
Gross voted expenditure on public services and infrastructure last year amounted to €67.4 billion, including over €10 billion in expenditure funded from the Social Insurance and National Training Funds. This was composed of current spending of €60 billion (annual increase of 5.2 per cent) and capital spending of €7.4 billion (annual increase of 22.5 per cent).