Government posts €5bn surplus in State's finances for 2022

Finance Minster Michael McGrath said the increase reflects strong growth in tax revenues and a decline in Covid-related expenditure. Picture: Naoise Culhane

An upswing of €12.4bn in the State’s finances saw the Government post a €5bn surplus in 2022, following the re-opening of the country after Covid-19 restrictions.

Turning a €7.5bn deficit into a significant surplus occurred even with the Government’s €11bn giveaway budget in late September, but was largely due to a massive windfall in corporation tax receipts.

The increase reflects strong growth in tax revenues and a decline in Covid-related expenditure, said Finance Minster Michael McGrath.

It is clear that once windfall corporation tax receipts are stripped out, the Government would have posted a deficit of about €5.25bn.

Figures showed that gross revenue in 2022 stood at €106.7bn, an increase of €8.5bn or 8.7% compared to 2021.

Total tax revenue in 2022 stood at €83.1bn, which was €14.7bn or 21.5% ahead of the same period last year.

The increase is driven by strong growth in income tax, Vat, and, in particular, corporation tax.

Total expenditure

Total expenditure for the year was €101.7bn.

Of this, gross voted expenditure stood at €88.8bn, which was €1.2bn ahead of the same period in 2021. Non-voted expenditure accounted for €12.9bn, €5.1bn below the same period in 2021.

Tax revenues of €5.6bn were collected in December, down by €0.5bn.

Income tax receipts of €2.5bn were recorded in December, €0.3bn, or 11.5%, ahead of December 2021, reflecting continued increases in earnings.

Corporation tax receipts amounted to €1.5bn in December, down by almost €0.3bn on an annual basis. Annual corporation tax receipts amounted to €22.6bn, which is €7.3bn ahead of the same period last year.

It has comfortably overtaken Vat to become the State’s second-largest source of revenue this year. However, some of these receipts are expected to be once-off in nature.

Excise duty receipts

Excise duty receipts of €449m were collected in December, down by 22% or €126m on the same month last year.

Overall in 2022, receipts amounted to €5.4bn, and are down by €0.4bn or 7% on the same period last year. The relative weakness reflects, in part, Government policy introduced to tackle increases in the cost of living.

In terms of capital taxes, stamp duty receipts for the year stood at €1.8bn, which was €0.3bn higher than the same period in 2021 while capital gains tax receipts for the year stood at €1.7bn, up by €0.1bn compared to 2021.

Capital acquisitions tax receipts of €605m in 2022 were ahead slightly, by €24m, on the same period last year.

Motor tax receipts of €0.9bn were collected in 2022, broadly flat on last year (down by €3m).

Customs receipts of €0.6bn in 2022 were €110m higher than the same period last year. The increase is attributable, in part, to a base effect arising from reduced trade with the UK seen in the early months of 2021.

Non-tax revenue for the year amounted to just over €2.4bn, and is broadly flat on the same period last year (down by €0.1bn) with increases in Central Bank surplus income broadly offsetting a decline in Nama surplus income.