Strong income tax receipts linked to having a record 2.83 million people at work boosted the Government’s finances in January and February, latest figures show.
Exchequer returns, published by the Department of Finance, show the Government collected €2.9 billion in income tax last month, which was 10 per cent up on the equivalent month last year.
For January and February combined, income tax receipts totalled almost €6 billion, which was €305 million (5.4 per cent) in advance of last year’s total at this stage.
The positive income tax trend reflects the current buoyancy of the labour market. The most recent Labour Force Survey indicated employment rose to a record 2.83 million in the final quarter of last year while unemployment remained near a historic low of 4.6 per cent.
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The latest exchequer numbers indicate the Government collected tax revenues (across all categories) of €13.6 billion in the first two months of the year, which was 10.4 per cent down on last year.
However, when once-off receipts arising from the Apple tax ruling are excluded from the 2025 figures, total tax receipts this year were up by 1.1 per cent.
Corporation tax receipts, which hit a record €31 billion last year, generated €863 million so far this year, which was down 22 per cent on the corresponding period last year, but January and February are not considered significant months for the business tax.
VAT receipts for the period generated €4.7 billion, up 4 per cent year on year.
“February is typically a quiet month for tax revenues, but the growth in income tax is a positive reflection of the strength of our economy,” Minister for Finance Simon Harris said.
“The March returns, which will include the first significant month of the year for corporation tax payments, will provide a better insight into the performance of the public finances,” he said.
“This is a time of unprecedented global uncertainty, and it is more important than ever that we continue to reinforce our economic resilience by running surpluses, making transfers into the two funds, and keeping public spending under control as set out in our Medium Term Fiscal and Structural Plan,” Harris said.
The department said the exchequer recorded a deficit of €1.8 billion for February. When the Apple tax receipts are excluded, this represented a decline of €2 billion in the underlying exchequer balance, reflecting transfers to the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.
On the spending side, the department said total voted expenditure to the end of February amounted to €17.5 billion, (5.2 per cent in advance of last year, but 1.8 per cent below what the Government had planned).
“This year’s total expenditure ceiling of €117.8 billion represents a significant investment in public services for our people,” Minister for Public Expenditure Jack Chambers said.
“This funding is supporting frontline health and social protection services, delivering school places, strengthening disability services, and providing investment to support the delivery of housing,” he said.
