The first quarter of the year saw a €805 million drop in corporate tax intake, which was compensated by robust income tax and VAT revenues, as per the recent data from the Exchequer. The Department of Finance release revealed that there was an accumulated tax revenue of €20.1 billion by the end of March, marking a €349 million or 1.8% increase compared to the same span in the previous year.
Corporate tax turned out to be the second major source of tax revenue for the government, following last year’s record of €24 billion, contributed €2.4 billion for the first three months. But this marked a 25% or €805 million decrease compared to the corresponding period in the last year. The Department didn’t pay much heed to this decrease in corporate tax, attributing it to timing issues and expecting a rise later in the year to balance it out.
Income tax for the quarter accumulated to €7.9 billion, a 7.6% or €559 million increment on the first quarter of the previous year which was said to be ‘somewhat in advance of profile.’ This steady growth in Income tax is reflective of the exceptionally healthy job market with a record 2.71 million individuals being employed.
At the same time, VAT receipts surged as compared to the previous year, amounting to €7.1 billion for the three-month duration, a 5.4% annual increase. It was benefitted by a strong job market meaning more employment led to an increase in overall expenditure.
Moreover, there was a boost in Government tax receipts due to inflation, making patrons spend more for the same amount of goods and services. Consequently, the drop in corporate tax was counteracted by a healthy rise in income tax and VAT.
According to the latest data, the Exchequer noted a surplus of €0.3 billion. This marks a significant improvement from a deficit €2.1 billion during the same period last year, reflecting a positive change of €2.3 billion. The Exchequer surplus on a 12-month rolling basis was recorded to be €3.5 billion.
In the initial financial quarter, the overall outlay reached €25.4 billion. The gross voted expenditure accounted for €22.8 billion within this total, exhibiting an increase of €2.9 billion when compared to the corresponding time frame the previous year.