Workers and businesses paid a record €51 billion in taxes last year, according to Government figures released on Wednesday.
Exchequer returns show that the State collected €58.376 billion last year, including €3.4 billion from the sale of 29 per cent of AIB, and spent €56.47 billion, leaving it with a €1.9 billion surplus.
Excluding the boost from the AIB sale, the figures show that the State spent €1.525 billion more last year than it earned, an improvement of €1.093 billion on 2016.
The figures show that taxes collected in 2017 rose 6 per cent to €50.737 billion, which John Palmer, Department of Finance principal officer, confirmed was a record.
“It was well above the previous year,” he said. He noted that the €47.2 billion collected in 2016 was the next highest total.
Final tally
The final tally of €50.737 billion was was €117 million or 0.2 per cent ahead of the Government’s prediction of €50.62 billion.
Workers contributed €20.01 billion of the total through income tax. This was 1.2 per cent less than the Government expected but €840 million more than in 2016.
However, department officials pointed out that PAYE, which accounted for €13 billion of the total, was 9 per cent ahead of 2016 and was exactly on target. They claimed that this indicated a buoyant jobs market.
Mr Palmer acknowledged that returns from PAYE and the universal social charge (USC) had been lower than expected earlier in the year, but had improved since the third quarter.
Companies paid a total of €8.2 billion in corporation tax on their profits, an increase of €850 million or 11.6 per cent on 2016. The figure was €486 million more than the Government had predicted.
VAT rose 7 per cent to €13.3 billion, broadly in line with Government targets. Property tax, Stamp duty, excise and capital gains accounted for the balance of the revenue collected.
Total State spending in 2017 of €56.47 billion included €46.3 billion approved by the Dáil for Government departments.
The Oireachtas decision to axe water charges and refund cash to those who had paid left the Department of Housing, Planning and Local Government with an extra €293 million bill at the end of the year.
John Kinnane, Department of Finance principal officer pointed out that the Dáil approved this last month.
The Department of Health overspent by €195 million, but this was in line with a supplementary estimate also approved by TDs.
The cost of servicing the national debt fell €621 million to €6.224 billion, while the Republic’s contribution to EU budgets was down slightly.
On track
Mr Palmer noted that the Government was on track to meet Budget 2018’s pledge that its deficit would be no more than 0.3 per cent of gross domestic product, a measure of the wealth produced by the Republic.
The Minister for Finance, Paschal Donohoe, welcomed the figures, which he described as "a very solid performance". Pointing to the tax take, Mr Donohoe said all tax headings had recorded annual growth, with overall receipts now 60 per cent above their 2010 low point.
“This fiscal outturn provides a good platform to start 2018. However, we remain vigilant to the potential challenges we face, including Brexit,” Mr Donohoe said.
“We will continue careful management of the public finances, including the focus on reducing our debt burden and continuation with competitiveness-oriented policies.”
David McNamara, economist with Dublin stockbroking firm Davy, said that the Government was within touching distance of a budget surplus.
“One concern is the increased reliance on corporation tax, now accounting for 16 per cent of tax revenues and driving much of the tax outperformance,” he warned.
