Vat receipts surge to €3bn in January

Consumer spending at end of Covid restrictions gives boost

The haul from the State's main spending tax surged above pre-pandemic levels. 

Christmas and new year spending helped Vat receipts to surge to over €3bn in January as the haul from the State's main spending tax surged above pre-pandemic levels. 

The haul comes as the Government took in total tax receipts of €6.7bn in the month, signalling that the public finances are starting 2022 in the same rude health as they ended 2021. 

Economists believe the Government can again expect a record haul in total tax receipts this year that will far exceed its budget forecast made in mid-October. 

That is partly because the lifting of almost all the Covid-19 restrictions paves the way for the start of the spending of an estimated €8bn in excess savings built up by some households during the crisis.  

The Government took in €700m more in Vat revenues than in January last year and, more significantly, collected €400m more from the single tax source than it did in January 2020, before the onset of the pandemic. 

Excise duties brought in €400m in the month, which was slightly less than last January.   

Strong economic growth

However, most of the big tax sources suggest a strong economic growth is on the cards this year. The Government took in €2.6bn in income taxes in the month, up €300m from January last year, and €400m more than in January 2020. 

There was slightly more mixed news for unemployment with new figures from the Central Statistics Office showing the unemployment rate rising to 7.8% in January. It is the second successive month that the unemployment rate has increased and highlights the continuing volatility in the economy. 

The Central Bank said it expects the economy to create 167,000 jobs over the next two years. It means it will be late 2024 until the unemployment rate dips below the 4.6% pre-pandemic level.