30% jump in corporation taxes help erase first quarter drop

Increases in Vat and income tax take

Minister for Finance Michael McGrath issued a caution on corporation taxes and their 'significant volatility'

Corporation tax receipts jumped by almost 30% in May helping erase the sharp drop recorded in the first quarter but further highlighting the volatile nature of the receipts.

The Department of Finance reported overall tax receipts of €10.4bn in May, a 15.9 per cent jump on last year, with particular growth reported across VAT and corporation taxes drawn largely from just a handful of key multinationals.

May is a VAT-due month, with receipts of €3.4bn collected, representing growth of €0.4bn or 12.1 per cent on last year and suggesting robust consumer spending.

Last month was also a significant month for corporate tax receipts, with €3.6bn collected, €0.8bn ahead of May last year. On a cumulative basis revenues have now recovered after a decline in the first quarter and are broadly level with the same period last year, at €6.3bn.

The revenues mean the exchequer recorded a surplus of €0.8bn to the end of May, an improvement of €1.4bn on end-May 2023. However, the comparison is distorted because of the transfer of €4bn to the National Reserve Fund in the first quarter of last year, which artificially depressed the 2023 position and flatters the year-on-year swing.

“May is an important month for tax revenues in the exchequer calendar and the positive performance is a welcome indicator of the strength of our economy," Minister for Finance Michael McGrath said.

"Overall corporate tax revenues have recovered after a sharp drop in the first quarter of the year and are now level with the same period last year."

"I would caution, however, that the significant volatility, in both directions, we have seen from month-to-month in this revenue stream is yet more evidence of the unreliability of these highly concentrated receipts, and the associated risks this brings to our public finances," he said.

The exchequer returns data will feed into the Summer Economic Statement to be published in the coming weeks and will also frame the parameters for Budget 2025.