Workers, shoppers and businesses boosted State coffers by almost €8 billion in July, leaving the Government with a €3.4 billion surplus so far this year, new figures show.
Revenue collected €7.6 billion in tax in July, €700 million more than in the same month last year, according to exchequer returns published on Tuesday.
Workers paid €2.9 billion in income tax during the month, 7 per cent or €200 million more than in July 2023, aided by the growing number of people at work and strong wage growth.
VAT soared almost 10 per cent or €300 million to €3.2 billion in July. This indicates “ongoing strong consumer spending” according to Peter Vale, tax partner at accountants Grant Thornton.
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However, he cautioned that VAT collection could slip later this year if increasing global uncertainty hits confidence.
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Tom Woods, head of tax at accountants KPMG, described the VAT figures as “encouraging” as they were growing ahead of inflation.
Businesses paid €400 million on their profits last month, €39 million more than in July 2023. The Department of Finance noted that “July is not a key month for corporation tax”.
But it pointed out that the State has collected €12.5 billion in corporation tax so far this year, €1.7 billion or 15.3 per cent more than during the first seven months of 2023.
Mr Vale warned that corporation tax was vulnerable to a US recession or broader economic downturn, particularly as the Republic relies heavily on a small number of multinationals for much of it.
He added that this uncertainty could make Budget 2025 planning harder for Jack Chambers, the new Minister for Finance.
Mr Chambers acknowledged that a sharp fall in corporation tax followed strong returns up to this point last year.
“This highlights the exceptional volatility in corporate tax receipts and means caution is advised before drawing firm conclusions from the performance in the year to date,” the Minister added.
In all, the Government collected €52.3 billion in taxes up to the end of July, €4.5 billion or 9.5 per cent more than during the same period last year. Non-tax revenue boosted the State’s income to €64 billion for the year to date.
Mr Woods noted that Government had collected more than half the €97.5 billion that it targeted for this year with the biggest months for tax yet to come.
“This puts the Government in a good position to deliver a budgetary package of €1.8 billion in additional spending and €1.4 billion in tax measures as set out in the Summer Economic Statement,” he added.
The Government had a surplus of income over spending of €3.4 billion for the year so far at the end of last month, against €700 million over the same period in 2023.
However, the department pointed out that the Government transferred €4 billion to the National Reserve Fund last year.
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Over the 12 months to the end of July, the Government had a surplus of €3.8 billion, the department added.
Motorists, smokers and drinkers paid €3.5 billion in excise during July, almost €460 million or 14.7 per cent more than the same month last year.
Stamp duty, paid on property deals and other transactions, was up 10 per cent at €886 million last month.
The Government spent €60.6 billion in the first seven months of the year, with individual departments accounting for €55.7 billion of this in total, the figures show.
Paschal Donohoe, Minister for Public Expenditure and Reform, confirmed that he would publish the Mid-Year Expenditure Report this week.
He added that as Budget 2025 looms in October, he would continue discussing with Government colleagues how to provide high-quality public services and better social outcomes while keeping spending sustainable.
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