Haul from corporate taxes unexpectedly booms to €6.3bn, dispelling fears over multinationals

The spotlight has remained on corporation taxes amid concerns the receipts are a sign of the weakness of the Irish economic model, which effectively relies on multinationals funding large amounts of public spending. Photograph: Leah Farrell / © RollingNews.ie

The Government unexpectedly collected a record haul of €6.3bn from corporation tax receipts last month, dispelling concerns about the key tax source, but also starkly illustrating the volatility of the public finances pivoting on the fortunes of a handful of multinationals.

The November exchequer figures also had good news about the rest of the economy, as overall tax revenues collected in what is a key payments month surged by almost 15% from a year earlier to €15.6bn, thanks to income tax receipts. That will go a long way to boosting confidence that the Government's Budget 2024 plans remain on track.

The figures have been keenly anticipated because November is when the exchequer collects an outsized share of all its annual revenues from just three major tax sources, and because they again throw light on the volatile nature of the corporation tax receipts.

Following a record haul of €22.6bn last year, there has been much concern in recent months that the performance of corporate receipts was set to fall flat, but November's unexpected result shows it could be matched or bettered this year.

November has answered the question over whether corporate tax receipts were set fall, said economist Jim Power. "And the answer was a 'No', absolutely," he said.

Corporation taxes brought in €6.3bn in the latest month, up from €5bn a year earlier, and means the single tax source has so far accounted for €22bn in revenues over the first 11 months, up from the €21.1bn in the same period last year.

The spotlight has remained on corporation taxes amid concerns the receipts are a sign of the weakness of the Irish economic model, which effectively relies on multinationals funding large amounts of public spending. Experts had feared for some sort of falloff from pharma giants, such as Pfizer, and the big tech firms based here, as their profits normalised following the pandemic boom.

And the November returns also had mostly good news about the health of the underlying economy, based the amounts the Government collected from employment taxes.

Income tax revenues last month brought in €4.6bn, up from November 2022, and which means over the first 11 months, they brought in €30.3bn, or €2bn more than was collected in the same period last year.

Vat receipts brought in €3.1bn in the month, up only slightly from a year earlier, but still accounted for a total of €20.1bn in the 11 months, or €1.6bn more than was collected in the same period in 2022. November is also an important payments month for Vat. The monthly performance likely reflected car sales last month compared with November last year, Mr Power said.