Exchequer returns: €4.4bn in tax receipts collected in April with income tax the star performer

The Government collected tax receipts of €4.4 billion in April, up €478 million or 12.2 per cent on the same month in 2022, with income tax proving the star performer last month, the latest exchequer returns show.

Income tax, VAT and in particular corporation tax have driven strong growth in tax revenues in the year to date, with tax receipts of €24.1 billion up 14.2 per cent for the first four months of the year.

The April year-on-year increase is a slightly slower rate of growth than that recorded for the first three months of 2023.

Corporation tax receipts of €3.55 billion for the first four months are running €1.3 billion or 55 per cent higher than they were in January to April 2022.

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In the month of April alone, receipts in this category totalling €308 million were €91 million lower than they were in April 2022, a drop of almost 23 per cent, though the month is a quiet for one for corporation tax.

The June figures will provide a good measure of expected full-year corporation tax returns, said Peter Vale, tax partner at Grant Thornton Ireland.

“A strong June would provide comfort that 2023 figures will surpass what was an exceptional 2022.”

Income tax receipts of €10.4 billion to the end of April were up 9.4 per cent or €894 million on the first four months of 2022. The Government collected income tax of almost €3.1 billion in April alone, which was up 12.5 per cent or €339 million on the sum recorded for April 2022.

[ Cantillon: Corporation tax may make the headlines but income levy does some heavy lifting ]

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“So far, job losses in the technology sector are not having a negative impact on income tax returns. This is slightly surprising but indicative of the ongoing strength of the labour market,” said Mr Vale.

April is a non-VAT due month and receipts amounted to €229 million, broadly in line with the same month last year. For the first four months, VAT receipts stand at €7 billion, up €968 million or 16 per cent on the same period last year.

Total spending in the first four months of 2023 arrived at €34.2 billion, the Department of Finance said. Of this, gross voted expenditure stood at €26.9 billion, which was €1.6 billion or 7.8 per cent ahead of the same period in 2022.

Capital spending at the Department of Housing was 32.5 per cent lower than planned for the first four months, the figures show.

Overall, an exchequer deficit of €3.7 billion was recorded in the first four months of 2023, compared with a deficit of €1.1 billion in the same period last year. The difference was driven by the transfer of €4 billion to the National Reserve Fund (NRF) in February this year, the department said.

On a 12-month rolling basis, the exchequer recorded a surplus of €2.4 billion. Excluding one-offs such as transfers to the NRF, the proceeds from the disposal of bank shares and estimated “excess” corporation tax receipts, an underlying deficit of about €4 billion was recorded for this period.

“The recent Stability Programme Update revised tax revenue forecasts for 2023 upwards by €1.9 billion relative to last autumn’s fiscal forecast, and actual tax receipts for the year to date appear to be consistent with that revision,” said Tom Woods, head of tax at KPMG.