Last week, the Department of Finance and the Department of Public Expenditure and Reform published the Fiscal Monitor for April. Tax revenues of €24.8 billion were collected to end-April, an increase of 2.6 percent, or €0.6 billion, on the same period last year. Growth was recorded in income tax, VAT and excise duties, therefore offsetting a decrease in corporation tax. Overall, the Exchequer deficit to the end of April 2024 stands at €1.2 billion. This compares to a deficit of €3.7 billion at the end of April 2023; however the position is distorted due to the transfer of €4 billion to the National Reserve Fund in early 2023.
Commenting on the figures, the Minister for Finance, Michael McGrath TD, said:
“April is one of the less significant months for tax revenues, but insofar as conclusions can be drawn from today’s figures, the most notable feature of the April performance is the strength in income tax receipts, continuing the trend that has been apparent so far this year. The 6.4% increase in overall tax receipts in April compared to the same month last year is a solid performance, and is in line with budget expectations. The performance of income tax and Vat year to date is encouraging, and points to a domestic economy that is holding up well despite a number of headwinds.
The May returns, when further VAT and corporation tax receipts are expected, will provide a clearer indicator of the tax revenue performance. However, overall, tax revenues are ahead of the same period last year even despite the decrease in corporation tax seen last month.
This is firm evidence of the fundamental strength of our economy and our labour market, and speaks to the success of Government’s careful and balanced approach to budgetary policy. As outlined in the Stability Programme Update published recently, my expectation is that the economy will experience modest growth in 2024 but importantly living standards will improve for the overwhelming majority of households as incomes rise in real terms. With inflation now moderating quite quickly, interest rates expected to fall over the period ahead, and further reductions in energy prices at the retail level anticipated, the pressures many consumers have faced will likely ease across the year and this will provide a further boost to the domestic economy.
I am pleased that we are making progress in relation to the Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024. This is currently at Committee Stage in the Dáil and the legislation is a central part of the Government’s strategy for the long term management of the public finances.”
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