A “once-off” corporate tax payment of €500 million, not related to the Apple tax case, boosted Government tax receipts last month.
The latest exchequer returns, published by the Department of Finance, show Government has collected €15.2 billion in tax so far this year. That is €3.2 billion, or 26 per cent, ahead of the same period last year.
While February is not generally a significant month for corporation tax, the business tax generated just over €1 billion last month, 92 per cent up on the February last year.
The increase did not relate to the high-profile European Union court ruling in relation to Apple last year but “reflects a once-off payment”, the department said.
On a cumulative basis, corporate tax receipts of €2.8 billion for January and February are up by €2.2 billion (89.2 per cent), the figures showed.
Income tax receipts of almost €5.7 billion for the two-month period were €311 million, or 5.8 per cent, up on the same period last year reflecting the current strength of the Irish labour market, with separate figures published on Wednesday putting unemployment at a low of 3.9 per cent.
Overall, tax receipts in February were running over 12 per cent ahead of same month last year. Grant Thornton tax partner, Peter Vale, said. .
“Income tax returns were particularly strong, up 9.4 per cent on the same month last year, despite tax cuts that took effect on January 1st,” he said. “The numbers reflect an economy now technically at full employment, consistent with the latest CSO figures.”
Responding to the latest figures, Minister for Finance Paschal Donohoe said: “February is not generally a significant month for tax revenues, but the steady performance across most tax heads to date is a further positive reflection of the strength of our economy.
“The March returns, which incorporate the first large corporate tax payments of the year, will provide a clearer indicator of the performance of the public finances,” he said. “In an increasingly uncertain global environment, it is now more important than ever that we maintain our public finances on a positive trajectory.”
The latest exchequer data come as the prospect of a global trade war looms with the United States, China, Canada and Mexico imposing tit-for-tat tariffs on each other.
US president Donald Trump has signalled he intends to target Europe with tariffs of up to 25 per cent, a move that could prove particularly damaging for Ireland’s small export-orientated economy, which sent €73 billion worth of goods to the US last year.
The exchequer figures show that public spending so far this year has totalled €16.7 billion, €1.7 billion (11 per cent) ahead of the same period in 2024 but roughly €200 million below what the department had expected.
“End-February expenditure of €16.7 billion reflects the additional funding provided for critical areas across our society including increased social protection rates as well as health and education sector investment,” Minister for Public Expenditure and Reform, Jack Chambers, said.
“Capital spending is up almost 50 per cent over the level seen at this time last year, underscoring this Government’s commitment to investing in infrastructure in areas like housing and transport,” he said.
Tom Woods, head of tax at KPMG, said that while the figures were encouraging, “next month’s exchequer returns will start to provide insight on tax revenue trends for the year ahead”.
“Notwithstanding Ireland’s current solid economic position, the geopolitical uncertainty is unsettling,” Mr Woods said.
