April tax haul of €3.9bn points to resilient Irish economy despite Ukraine war

Income tax receipts have risen, while other major sources of tax revenues had mixed performances in the month.

The Government collected €399m in corporation tax revenues in April.

The Government collected €3.9bn in all tax revenues in April, helped by a strong performance in income taxes that suggests the Irish economy is, for the time being, in good health despite the fallout from the war in Ukraine.

Overall revenues were boosted as income tax amounted to €2.7bn of the tax haul, reflecting an increase of over 28% compared to the same month last year.

The latest figures also suggest that the Government would have the resources should it find it necessary to subsidise further households and businesses from the surge in inflation pressures. 

The exchequer deficit for the first four months this year has fallen sharply to €1.1bn from €7.6bn in the same period last year.

Employment held at high levels during the worst of the Covid-19 crisis thanks to the huge sums the Government injected into wage support schemes. 

Income tax receipts have risen and have now brought in over €9.5bn since the start of the year, up by more than €1.5bn from last year.

The other major sources of tax revenues — Vat, corporation tax receipts, and excise duties — had mixed performances in the month. 

The Government collected €399m in corporation tax revenues in April, and for the first four months have now brought in almost €2.3bn. 

Excise duties brought in €526m in April and have now brought in over €1.7bn so far this year, up by only €48m from the same period in 2021.

In a non-Vat payments month, Vat receipts were little changed at €192m. Vat receipts since the start of the year are running at €6bn, and next month's figures will be anticipated to see whether there are any effects from the sharp increase in consumer prices showing through.  

The Department of Finance last month scaled back its outlook for the economy because of the fallout of inflation, which has accelerated due to the hike in oil, gas, and food commodities prices, made worse by the Russian invasion of Ukraine.

It projects that the domestic economy, as measured by modified domestic demand, will expand at the still-strong rate of 4.25%. The Government expects inflation will average 6.25% this year.

Many economists expect consumer prices to peak in the early summer months at over 8%, before easing somewhat, but remaining at elevated levels through 2023.