September Exchequer results – Donohoe says corporation tax receipts cannot be relied on over medium term

Oct 05, 2020

Tax revenues for September fell by three percent when compared with last year. Strong receipts at the start of the year continue to bolster the overall receipts figure, with Q3 revenues down 10 percent on the same period last year. An Exchequer deficit of €9.4 billion was recorded to the end of September, with total net voted expenditure up €9.6 billion when compared with last year. 

The overall outturn to end-September continues the trend with a sharp year-on-year decline in VAT being offset to some extent by strong corporation tax receipts and some resilience in income tax receipts, to a lesser extent.

In a press release issued by the Department of Finance, Minister for Finance, Paschal Donohoe, TD detailed 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”.

Snapshots from the September Exchequer returns:

  • VAT receipts in Q3 are down nearly 19 percent, or over €900 million;
  • income taxes were down 7.1 percent, or €373 million, in Q3 but overall year-to-date receipts are down by 2.1 percent;
  • excise duties have recovered well in the quarter, up nearly 9 percent on Q3 last year, Although the year-to-date decline stands at 13 percent; and
  • corporation tax receipts continue to exceed expectations up €90 million in the quarter and €1.6 billion year to date.