'Stellar' corporation tax receipts help boost revenues to €6bn in October

"The big unknown is what impact the current global economic slowdown will have on future revenues," said Peter Vale, tax partner at Grant Thornton Ireland.

Finance Minister Paschal Donohoe and Expenditure Minister Michael McGrath. 

The Government’s revenues have continued to climb as it took in almost €1bn more in taxes in October than in the same month last year.

Total receipts rose in the month to over €6bn thanks to another “stellar” performance by corporation tax revenues, the latest exchequer figures show.

The Government has collected almost €64bn in revenues in the first 10 months of 2022, up by almost €13bn from last year.

The tax haul brings the Government closer to achieving its budget revenue targets for 2022 and may even provide some hope that revenues will stand up next year, despite the growing economic clouds.

Economists have said that the Irish public finances are in better shape than in many European countries.

That could help the Government to deliver even more energy subsidies to households and businesses beyond the €4bn in measures it has earmarked for next year, if they are required.

Peter Vale, tax partner at Grant Thornton Ireland, said the corporation tax revenues so far this year “have been nothing short of stellar”.

“Despite the remarkable corporate tax receipts year to date, and again this month, the big unknown is what impact the current global economic slowdown will have on future revenues,” said Mr Vale.

With mixed news on the corporate earnings front in recent weeks, we may still see a significant drop in corporate tax revenues next month, which would be a real concern.”

Revenues 'may prove transitory'

Finance Minister Paschal Donohoe hailed the robust outcome, but also warned about the outlook.

“However, the strength of potentially volatile corporate tax receipts continue to provide an artificially positive picture of the public finances,” said Mr Donohoe.

“As I have warned on many occasions, while these receipts are welcome, it is imperative that the Government does not build up permanent fiscal commitments on the basis of revenues that may prove transitory.”

Public Expenditure Minister Michael McGrath said increased funding to support services and families “demonstrates a responsive approach to the external challenges faced by our economy and society, including the ongoing response to Covid-19, the war in Ukraine, and the increased cost of living”.

“These figures reflect the first stages of the cost-of-living supports announced as part of Budget 2023, including social welfare payments and the first winter electricity credit which will be seen on household electricity bills over the coming weeks.”