Exchequer takes in first of corporate tax windfalls
The exchequer brought in much less in Vat receipts than it anticipated in October, while corporation tax receipts surged as the Government, as it had anticipated, got the first of its huge windfalls made up of advance payments by multinationals.
Following the budget announcements in early October of corporate tax windfalls by Finance Minister Paschal Donohoe, the latest figures are a lot less significant but nonetheless show the Government took in over €4.63bn in overall receipts in October, 18.4% more than it had planned for at the start of the year, while spending has surged by over 9% from a year earlier.
However, the bulk of the tax outperformance of €773m in the month was accounted for by the huge early payments of corporate tax bills brought forward from future years.
Minister Donohoe was criticised by the Irish Fiscal Advisory Council and some other economists after saying, in a surprise announcement days before his budget, that the exchequer would receive €1bn in early corporate tax payments and that he would use most of the windfalls to plug a deficit in health spending. The Department of Finance said total net voted expenditure over the first 10 months, at over €40.14bn, was up 9.2% from the same period a year earlier.
Conall Mac Coille, chief economist at Davy, said: “A strong growth in tax revenues was matched by a strong increase in spending.” But he said “the same questions remain” over the wisdom of the Government endorsing a sharp rise in spending when the economy is growing rapidly.
At only €241m, Vat receipts, in a so-called non-Vat month, fell sharply below expectations, but were, as the department noted, on target for the year so far. The latest figures mean the exchequer has collected a total of just over €11.81bn in Vat receipts over the first 10 months of the year. Income tax receipts were on target for the month and the Government has now collected almost €16.27bn in income receipts so far this year.
