Corporation tax take jumps by 71% in first quarter of 2023
The amount of corporation tax collected in the first three months of this year is running €1.35 billion ahead compared to the same time last year.
The latest Exchequer Returns from the Department of Finance show the public finances were just over €2 billion in deficit at the end of March, due mainly to the transfer of €4 billion to the National Reserve Fund.
The country’s corporation tax take is either a seemingly never-ending bonanza or a high wire act that threatens to undermine the public finances. But either way, it does not seem to be slowing down.
The latest Exchequer figures show corporation tax is up €1.35 billion – or an incredible 71% – in the first three months of this year compared to the same time last year.
Officials suggest there may be timing issues and this is tax that might have been paid earlier than expected.
Other sources of tax like income tax are up just over 8% and VAT returns are up 16% showing both the effects of inflation and a robust economy.
The overall exchequer position is in deficit to the tune of €2 billion but this is down to the transfer of €4 billion to the National Reserve Fund.
Speaking this afternoon, the Minister for Finance Michael McGrath said plans for a new, longer term, actively managed fund will be brought to Cabinet in the coming weeks.
Today’s Exchequer figures show that overall tax revenue in the first quarter was €19.7 billion, up 14.6% on the same period in 2022.
Expenditure was just over 14% higher at €26.94 billion.
Current expenditure was 3.5% higher at €18.6 billion while capital expenditure was 33.9% higher at €1.2 billion.
Part of the reason for the leap in capital expenditure is the Covid restrictions which were still in place in the early part of last year.
VAT receipts were €6.8billion, up 16% or €930m, while income tax came in at €7.4 billion, up 8% or €555m.
Corporation tax was €3.2 billion, 71% or €1.35 billion more than the same time last year.
The Department of Finance also calculated an underlying deficit on a 12-month rolling basis of €3.5 billion.
This excludes what is considered “excess” corporation tax, bank share sales and transfers to the National Reserve Fund.