One swallow doesn’t make a summer, ditto one month of tax returns. We won’t be able to assess the true health of the exchequer until later in the year.
But January’s exchequer returns, published on Thursday, indicate the Government has started 2026 on a relatively positive note following a record tax haul in 2025.
There was a marginal increase (0.6 per cent or €48 million) on the same month last year, bringing total tax revenue for January to €8.5 billion.
This is a good outcome given the geopolitical outlook remains just as uncertain now as it did 12 months ago and people remain under the kosh from rising living costs.
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The Government will also take solace from the fact that the US, while altering the Organisation of Economic Co-operation and Development’s deal on a global minimum tax rate for multinationals, has not killed it. This appears to guarantee a significant piece of the tax jigsaw here.
“With agreement reached with the US on a carve out for US companies from the new minimum tax rules, the future of the 15 per cent corporation tax rate looks secure, which should ensure additional receipts flow into the Irish exchequer for the foreseeable future,” said Peter Vale, tax partner at Grant Thornton.
“That should act as a partial hedge to our ongoing dependence on such a small number of companies for the bulk of our corporation tax receipts,” he said.
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The Irish Fiscal Advisory Council (Ifac) expects corporate tax to increase by up to €3 billion from 2026 on as big multinationals become liable to pay the new minimum 15 per cent tax rate.
The Department of Finance is expecting receipts from the business tax to hit almost €34 billion this year.
A question hanging over the equation is whether we are saving enough of these potentially volatile receipts and, looked at from the other end, whether they are being allowed to fuel an unsustainable rise in public spending.
Government expenditure is scheduled to rise by 50 per cent (on 2024 levels) by 2030. And that’s with Government commitments to rein it in.
