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Irish revenues surge further thanks to reopening, corporate tax

Irish revenues surge further thanks to reopening, corporate tax
Irish revenues surge further thanks to reopening, corporate tax   -   Copyright  Thomson Reuters 2021
By Reuters

DUBLIN – Ireland collected 5.8% or 2.5 billion euros ($2.9 billion) more tax than expected during the first nine months of the year due to a further surge in VAT receipts and strong corporate tax returns, the finance ministry said on Monday.

Tax revenues have proven more resilient than many forecast during the COVID-19 pandemic, and the reopening of almost every part of the economy from a third lockdown in recent months has led to a sharp rise in most categories.

VAT receipts, which are collected every second month, were 13.7% ahead of target for the month of September, a similar level to July when the hospitality sector opened again. That brought the cumulative VAT total for the year to date to 7.7% above forecast.

The amount of VAT collected so far this year is also 1% higher than in the first nine months of 2019, before the pandemic struck.

Corporate tax returns, which are mostly collected from the country’s large multinational sector and have more than doubled to record levels since 2014, were 14.8% or 1 billion euros ahead of expectations at the end of September.

The largest category, income tax, was 0.8% ahead of target.

With spending 3.2% below forecast, the exchequer recorded a lower deficit of 9.2 billion euros on a 12-month rolling basis.

The government is likely to run a lower budget deficit this year than the 5.1% of gross domestic product it forecast in July, Finance Minister Paschal Donohoe indicated last week.

($1 = 0.8600 euros)