The October Exchequer figures show that tax revenues were €6.4 billion ahead of profile and €13 billion up on the same period last year. Contributing to this was the strong performance of corporation tax receipts, which were nearly €4.8 billion higher than profiled. The annual increase is, in part, flattered by Covid-19 restrictions that were in place in the early part of last year.
Corporation tax receipts of €2.3 billion were reported in the October tax revenues. This is €1.2 billion higher than profiled. The Department of Finance press release on the publication of the October Exchequer figures, notes that it is not expected that such a high level of receipts will be repeated in future years. The Minister for Finance discussed the continued uncertainty within the corporation tax base despite the 12-month rolling Exchequer surplus of €7.3 billion, as such revenues may prove transitory.
Commenting on the figures, the Minister for Finance, Paschal Donohoe T.D. said:
“Today’s figures show that tax receipts remain strong at the start of the fourth quarter. However, the strength of potentially volatile corporate tax receipts continue to provide an artificially positive picture of the public finances. As I have warned on many occasions, while these receipts are welcome, it is imperative that that Government does not build up permanent fiscal commitments on the basis of revenues that may prove transitory.
Budget 2023 was, of course, a ‘Cost of Living Budget’ focused on mitigating inflationary pressures. The Government has aimed to strike a delicate balance between providing assistance to those suffering the most but without adding fuel to the fire of inflation, while ensuring that we retain sufficient firepower to respond to further challenges over the coming years.
That is why I allocated €2 billion to the National Reserve Fund this year, with a further €4 billion to be transferred next year. This policy instrument is aimed at further enhancing the resilience of the public finances and will enable the Government to respond in a pro-active manner should risks materialise over the coming period.”
Further details are included in the Fiscal Monitor October 2022.
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