Exchequer figures reveal surge in Corporation Tax
Exchequer figures published today by the Department of Finance show that taxation receipts for the month of November were €631m ahead of target.
Tax receipts in November were €938m higher than in the same month last year.
These figures are consistent with figures from the Central Statistics Office which show an increase in corporate profitability this year.
Welcoming the figures, the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe, said:
“At the time of the Budget last October, I announced that corporation tax receipts would exceed original expectations. The actual figures for November follow a very strong performance in October, and this means that corporate tax receipts for this year will outperform our most recent expectations.”
These additional receipts are not being used to finance additional expenditure. Instead, all of the excess will be set aside to reduce – and possibly eliminate – the headline deficit, putting Ireland in a stronger position and better able to meet the challenges that may lie ahead.
“Some of the increase in corporate tax receipts this year is due to one-off factors, which was signalled at Budget time and will not be repeated. For next year, my Department has taken account of this and has projected a decline in corporation tax receipts for 2019; expenditure plans have been set on this basis."
On the spending side, gross voted expenditure to the end of November is €56.0bn, €73m ahead of profile.
Minister Donohoe said: “Public expenditure is being managed within expectations and the annual increase reflects the Government’s commitment to the delivery of improved public services.
Commenting on the November Exchequer Returns, Peter Vale, Tax Partner, Grant Thornton, said:
"November was a very strong month for tax receipts, with receipts over €1bn ahead of target and €3.6bn ahead of the same period last year.
"On the face of it, the figures look particularly robust. On closer inspection, it is clear that corporate tax receipts are driving much of the 2018 growth, with corporate tax alone now over €1.5bn ahead of target."
"November alone saw €2.7bn in corporate tax receipts collected.
While undoubtedly one-off factors have contributed to the surge in corporate tax receipts in 2018, there is a general trend of the “on-shoring” of valuable intangible assets to countries such as Ireland, where real substance exists.
"Assuming we do see a dip in the corporate tax figures, it is encouraging to see a strong VAT performance in November, bringing the figures back ahead of target for the year."
