Public finances are fighting back the pandemic as the Treasury runs a running surplus

The Treasury has posted a surplus on a rolling 12-month basis for the first time since the pandemic began, according to the latest monthly figures from the Treasury Department.

Continued strong tax revenues and a sharp drop in expenditure due to the phasing out of Covid-19 support resulted in a positive balance of 32 million euros for public finances in the 12-month period to the end of May.

The year-to-date surplus was much larger at €1.4bn compared to a deficit of €6bn in the same period last year, although the rolling 12-month figure is seen as a better indicator of the trend.

The improvement marks the effective end of the pandemic-related fiscal challenge after two years of massive government spending to support the domestic economy.

Tax receipts in May under the main income tax, corporate income tax and VAT headings remained robust.

To date, a total of 30.1 billion have been sold in 2022.

May was a VAT month and VAT collected in May totaled 2.9 billion euros, up 28 percent year-on-year, up from 27 percent year-to-date.

Corporate taxes of €5.2 billion so far this year have also made a significant contribution as increased profitability has generated windfall revenues in the multinational sector.

Part of the improvement in government finances can also be attributed to the impact of inflation, which affects public finances as higher prices and wages push up gross amounts collected.

Spending fell €2.6 billion year-on-year to €38.9 billion as the phasing out of pandemic support schemes such as the Employment Wage Subsidy Scheme (EWSS) eased the strain on government coffers. Public finances are fighting back the pandemic as the Treasury runs a running surplus

Fry Electronics Team

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