Government forecast to record €1.4bn Exchequer deficit, according to pre-budget White Paper

Tánaiste and finance minister Simon Harris said despite the 'significant distortions' from corporation tax timing, the receipts show a positive trend. File picture: Niall Carson/PA

The Government is forecast to record a €1.4bn Exchequer deficit this year as it publishes its pre-budget White Paper.

The annual document sets out the State’s tax and spending projections ahead of Budget 2027 and before any new policy measures or spending commitments are announced.

It estimates tax receipts of €124.9bn will be collected next year, including €42.1bn from income tax.

It predicts corporation tax receipts of €39bn next year, up from the €34bn expected to be collected by the end of 2026.

The projection comes as the Department of Finance reported a sharp increase in corporation tax receipts in September, with collections reaching €4.9bn compared with €1.8bn in the same month last year.

The department attributed the hike to a number of large multinational companies frontloading their tax bills for August and September when they would ordinarily have been made in November and December.

As a result, corporation tax receipts are expected to be lower during the traditional peak payment months later this year.

Corporation tax receipts totalled €22.7bn as of the end of September.

Tánaiste and finance minister Simon Harris said despite the “significant distortions” from corporation tax timing, the receipts show a positive trend.

“Robust revenue growth reflects an economy that has been running at full employment for the longest stretch in the history of the State,” Mr Harris said.

Elsewhere, income tax receipts reached €27.8bn by the end of September, including €2.8bn collected during the month. That was €200m ahead of profile compared with September last year.

Excise duty receipts, meanwhile, were down €100m year-on-year. Receipts totalled €400m in September and €4.4bn for the year to date, compared with €4.8bn over the same period in 2025.

The Department of Finance said the decline was largely due to the reduction in fuel excise duties introduced by the Government earlier this year.

September is one of the main Vat payment months, with receipts totalling €4.1bn, up €600m on the same month last year.

Other taxes collected during September included €1.2bn in stamp duty, €586m in capital gains tax, and €286m in capital acquisitions tax.

Total exchequer spending reached €93.7bn by the end of September.

The wider returns show the Government recorded a surplus of €2.4bn at the end of September, compared to a €1.4bn surplus in the same period as last year.

However, the Department of Finance has said these comparisons are impacted by the Apple tax ruling in 2024.

Ireland’s debt-servicing costs fell to €2bn by the end of September, down €600m compared with the same month in 2025.

• Tadgh McNally is a Political Reporter.