Record Vat receipts point to buoyant Christmas spending
Record Vat revenues helped the Exchequer take in 7% more in overall tax revenues last month than in January 2018, but spending was also up sharply.
The figures released by the Department of Finance include Vat payments covering the busy Christmas period for retailers and show few signs that the concerns over Brexit have spurred consumers to rein in their spending.
Vat outperformed the other three main tax sources by surging by 11.7% to bring in €2.73bn in the month.
October’s budget increase which brought the Vat rate charged on hospitality and tourism businesses back up to 13.5% applied from the start of January, but its effect, if any, on tax receipts won’t be recorded until later in the year.
The Vat figures covering payments in November and December may also be caused by the lengthening of the Christmas shopping season into November, with both online retailers and shops bringing forward price discounting.
Up by 7.6%, income tax receipts also got off to a good start for 2019 to bring in over €1.88bn.
The other two main tax heads, corporation tax and excise, brought in less revenue than they did a year earlier but it may be too early to suggest any long-term trends.
“A real highlight was Vat receipts up an enormous 11.7% on the year,” said Conall Mac Coille, chief economist at Davy.
The tax revenue data point to a buoyant Christmas sales season, despite anecdotal evidence from retailers conditions were tough.
Motor tax took in €95m in the month, an increase of over 9% from January 2018.
Overall, the exchequer brought in €5.37bn in tax revenues in January, an increase of 7% in the year.
However, spending was also up sharply.
Total net voted expenditure rose by 6.5% to over €4.21bn.
Health spending appears not to be an issue at this stage despite last year bursting its current budget.
“Nonetheless, health spending will be closely watched as the months go on,” said Mr Mac Coille.
