Exchequer deficit reaches €9.4bn by end of September

Commenting on the figures Minister for Finance Paschal Donohoe said "Today’s Exchequer figures provide a timely snapshot of the public finances as we prepare for Budget 2021."

Tax revenue in the third quarter is down by €1.4bn on last year's figures.

Today's Exchequer figures show a deficit of €9,373m to the end of September, a significant drop from the same period last year where there was a surplus of €38m. 

The drop in revenue reflects the reduced personal consumer spending that had taken place in the third quarter of the year. VAT receipts for that time are down nearly 19% or €900m.

Despite the rise in unemployment figures, income tax has exceeded expectations and are down by 7.1%. Revenue believes this is due to a combination of the "sectoral nature" of recent job losses and the highly progressive nature of the income tax system.

Although revenue collected from excise duties are down year-on-year, they are up 9% compared with the third quarter of 2019.

Total net expenditure was up €9,595m, or 25% to end-September. This is due to the increased budget money of the Department of Health and the Department of Employment Affairs and Social Protection to respond appropriately to the Covid-19 pandemic.

Commenting on the figures Minister for Finance Paschal Donohoe said: "Today’s Exchequer figures provide a timely snapshot of the public finances as we prepare for Budget 2021. They show that although receipts are better than previously expected, much of the over-performance relates to corporation taxes — a revenue stream we cannot rely on over the medium-term."