With November being the most important month of the year for tax receipts, the Minister for Finance noted that the recent November Exchequer figures indicate “fiscal performance broadly in line with expectations to end-November, corporation tax recovers in key month”. The Exchequer surplus stood at €5.4 billion, to end-November, a decline of almost €7 billion in comparison with the same period last year. The decline reflects the transfer of €4 billion to the National Reserve Fund and increases in public expenditure.
November is a VAT-due month, it is the deadline for self-employed income tax payments, and the month in which the largest payments are made for corporation tax. Total tax receipts for the month of November amounted to €15.6 billion, €2 billion higher than November 2022.
Corporation tax receipts in November amounted to €6.3 billion, which is €1.3 billion, or almost 27 percent higher than November last year. This is broadly in line with expectations.
Income tax receipts were €2.1 billion, or 7.3 percent, ahead of their end-November 2022 position and reflect continued strength in the labour market.
VAT receipts to end-November are €1.6 billion, or 8.6 percent, up on the same period last year.
Commenting on the figures, the Minister for Finance, Michael McGrath T.D. said:
“The end-November Exchequer returns confirm that we are, broadly speaking, where we expected to be at this point in the year. The growth in income tax and VAT receipts we have seen over the course of the year points to the fundamental resilience of our economy despite all the external challenges we are facing.
The stand-out feature of the November performance is, of course, corporation tax: after three months of decline, a large increase in receipts this month means this revenue stream is once again comfortably ahead of last year.
However, it is crucial to place this in context. While corporation tax is now 4 per cent ahead of 2022, it is clear that the era of persistent over-performances is coming to an end.
The volatility in this revenue stream highlights the importance of ensuring that permanent fiscal commitments are not made on the basis of temporary receipts. Instead, the establishment of the two new long-term savings vehicles (the Future Ireland Fund and the Infrastructure, Climate and Nature Fund) will use these windfall corporation tax to help finance known future fiscal challenges, such as an ageing population, climate change and digital transition.”