Record €88bn tax revenue haul in year soothes jitters over economy

Income taxes brought €33bn for the full year, some €2.2bn more than the previous year

The Fianna Fáil Minister for Finance, Michael McGrath and the Fine Gael Minister for Public Expenditure, National Development Plan Delivery and Reform, Paschal Donohoe. Overall, tax receipts brought in more than €6bn in December and delivered a haul of €88bn for the full year.

The Government collected a record haul of more than €88bn in tax revenues last year, as corporation taxes again delivered despite a late-year scare, while bountiful receipts from other tax sources pointed to a healthy domestic economy going into 2024, the latest exchequer returns suggest.

The figures for December also confirmed that income tax receipts and consumer spending taxes such as Vat also brought in substantial amounts for the exchequer across the full year.

But the focus remained on the star performance of corporation tax revenues that belied deep concerns about the health of the taxable profits that the tech and pharma giants such as Apple and Pfizer report through Ireland.

In the month, the exchequer collected €1.8bn in profit taxes levied on corporations, and for the full year raised €23.8bn, up by €1.2bn from 2022.

There are still huge uncertainties about this single tax source because a handful of multinationals account for the lion’s share of that €23.8bn haul from 2023, but the implementation of the hike in the minimum tax rate to 15% from 12.5% for the very largest companies may help broaden the revenue net this year.

Overall, tax receipts brought in more than €6bn in December and delivered a haul of €88bn for the full year -- which was €5bn more than was collected in 2022.

Income taxes brought in €2.6bn in the latest month and a total of €33bn for the full year, some €2.2bn more than the previous year.

At €20.3bn, the total haul of Vat receipts for the full year were up €1.7bn from 2022. That suggests that consumer spending is helping to support the economy, despite inflation and interest rate hikes weighing on the finances of many households. December is a so-called non-due payments month for Vat.

For 2023, the Department of Finance said the exchequer posted a surplus of €1.2bn, down from a surplus of €5bn in 2022, when increased spending and the transfer of €4bn to the National Reserve Fund is accounted for.

Gross voted expenditure increased by €6bn to €94.7bn in the year.