gov - Tax receipts to end-November remain robust; Government spending continues to support recovery;

Today’s Exchequer figures show that tax revenues in November were €11.3 billion;
November is the most important month of the year for tax receipts (i.e. it is a VAT-due month, it is the deadline for self-employed income tax payments, and the month in which the largest payments are made in respect of corporation tax);
Corporation tax receipts amounted to €4 billion, 31 per cent higher than in November last year;
Income tax receipts were €3.8 billion in November, a strong performance (though annual comparisons are not relevant, given the ‘pay and file’ deadline was extended into December last year);
November is a VAT-due month and receipts were strong at €2.6 billion, nearly 25 per cent higher than the same period in 2020;
Cumulatively, total tax receipts to end-November were very robust at €62.3 billion, with strong growth across almost all tax heads;
Total gross voted expenditure to end-November amounted to €74.7 billion, €1.2 billion or 1.7 per cent ahead on the same period in 2020;
The 12-month rolling Exchequer deficit stood at €4.9 billion at end-November.

November is the largest tax collection month of the year, and the most important month for income and corporation taxes. Corporation tax receipts in November were very strong, with receipts of €4,001 million; much of this reflects strong export sales and profitability in the life sciences/pharma and ICT sectors.

At €3,784 million, income tax receipts continue to be robust, and reflect the ongoing recovery in employment, alongside the strength of wages in sectors less affected by the pandemic. They are also indicative of continued resilience in self-employed receipts. Reflecting the recovery in consumer spending, VAT receipts in November were €2,580 million, up almost 25 per cent on the same period in 2020 (though year-on-year comparisons are affected by the stringency of restrictions this time last year).

Total gross voted expenditure to end-November 2021 amounted to €74,742 million. This is €1,236 million or 1.7 per cent ahead on the same period in 2020, with current spending up by €1,672 million and capital spending down by €436 million, reflecting the impact of the restrictions on construction activity earlier in the year.

Commenting on the figures, the Minister for Finance, Paschal Donohoe T.D. said:

“Tax receipts to end-November offer another positive indicator as to the strength of our economic recovery over recent months. VAT receipts, in particular, reflect the significant rebound in consumer spending, while the income tax performance reflects the ongoing recovery in the labour market; indeed, figures published last week show that the level of employment is now back at pre-pandemic levels, though this varies across sectors. Corporation tax receipts in November were very strong, reflective of a very robust performance of many higher-technology sectors during the pandemic.

Since the pandemic began, the Government’s approach has been to support the economy while ensuring that our public finances remain on a sustainable path. In its assessment of Budget 2022, the Irish Fiscal Advisory Council has concluded that the Government has found the appropriate balance and I welcome this. The Government’s approach has worked well, and Government has established the foundations for the recovery seen to-date.

But the Council has also highlighted many fiscal challenges ahead and I have also outlined these on many occasions, including the challenges now posed by the omicron variant. This is why, once the pandemic has passed, we must re-align public revenue and expenditure while continuing to invest in public services, particularly in capital infrastructure”.

The Minister for Public Expenditure and Reform, Michael McGrath T.D. said:

“At the end of November, Gross Voted Expenditure came to €74¾ billion, roughly €1¼ billion ahead of spending levels for the same period last year. Current expenditure stands at over €68½ billion, with nearly 82 per cent of this, some €55.9 billion, relating to spending in the frontline Departments of Education, Social Protection, Health, and the Department of Further and Higher Education, Research, Innovation and Science. This spending reflects the Government’s continued focus on protecting the most vulnerable in society and prioritising core social services against the impacts of Covid-19.

Budget 2022 was prepared in line with the medium term fiscal strategy set out in July’s Summer Economic Statement. This sets out a clear framework out to 2025 to deliver sustained improvement in public services and much needed infrastructure investment. This will be achieved within the context of a sustained reduction in the deficit and a clear focus on delivering value for money for the public. Our capital investment will be guided by the €165billion National Development and the Revised Estimates Volume for the Public Service will be published in the coming weeks providing more detail on the allocations that were announced in the Budget.”.

ENDS

Fiscal Monitor November 2021

Notes to editors:

Tax revenue last year amounted to €57.2 billion.
The original tax profiles for 2021 were published earlier in the year and, following the revisions set out in Budget 2022, are now redundant. The Department will publish its profiles for 2022 early in the new year.

Tax receipts to end-November remain robust; Government spending continues to support recovery; – Ministers Donohoe & McGrath