The latest Treasury Department figures confirm the dramatic improvement in public finances post-Covid, but officials say corporate taxes are unlikely to be met next year.
New figures released on Thursday for the year to the end of October show a budget surplus of £7.3bn.
Unprecedented corporate tax revenues are a major contributor to this change. A record €16.2 billion in tax was paid on corporate profits in the first ten months of the year. That was 6.6 billion euros more than in the same period last year, which was already a record.
However, this is not expected to last, according to the official Fiscal Monitor report, prepared by Treasury Department officials.
The corporate tax windfall was due to the increased profitability of a small number of companies in the multinational sector, but those revenues are not expected to be replicated in 2023, the report said.
Income tax remains the largest source of revenue for the state, however, with workers paying €23.9 billion so far this year, €3.2 billion more than the same period in 2021.
The other major tax pot that is levied annually is VAT. October is a so-called non-VAT month in which only 200 million euros were collected, but so far the cumulative VAT revenue this year is 15.5 billion euros. That’s an increase of 2.9 billion euros, or nearly a quarter, from the same period in 2021, but last year’s total was constrained at least in part by the economy still suffering “lockdowns,” particularly early in the year, which hit the consumer spending that ultimately drives VAT.
Tax revenue, which was higher than budgeted this year, has already been used to fund a series of mostly one-off living cost supports announced in the budget in September, many of which, including extra child support and utility bill support, are in people’s accounts land this week.
In addition to taxes paid, the overall improvement in public finances reflects a fall in government spending due to the phasing out of Covid-19 support.
Gross revenues at the end of October were 83.4 billion euros, an increase of 8.4 billion euros compared to the end of October 2021.
Total spending at the end of October was 76.1 billion euros.
The Treasury forecast full-year surplus of 4.45 billion euros when ministers announced the gift-giving budget in September – but that forecast already looks conservative.
https://www.independent.ie/business/budget/surplus-grew-in-october-but-officials-say-tax-boom-wont-last-into-2023-42114020.html The surplus grew in October, but officials say the tax boom won’t last until 2023