Corporation taxes rose sharply in the first nine months of the year to fuel an 11 per cent surge in Exchequer receipts and a widening of the Government surplus before it unveiled a €10.5 billion Budget 2025 package on Tuesday.
Exchequer returns show the Government collected €68.2 billion of taxes for the nine months, driven by a 23.3 per cent surge in corporation taxes, to €17.8 billion, according to figures released by the Department of Finance on Thursday.
Still, the corporation tax take for September dipped 13.3 per cent from a very strong figure of €1.78 billion for the previous month that was said to have been driven by Apple. The US tech giant is unusual among the State’s biggest taxpayers in making its two half-yearly payments to Revenue in March and August.
The Government recorded a €5 billion surplus for the nine months, up from €1.1 billion for the same period last year. However, last year’s figure was distorted by a €4 billion transfer to the National Reserve Fund which has since been moved on to one of two new sovereign wealth funds recently set up to capture windfall corporation taxes and invest for future State expenses.
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Budget 2025 documents published this week show the Government now expects to post a €23.7 billion surplus in 2024, by far the largest on record, including billions of euros of back taxes that the European Court of Justice (ECJ) ruled last month Apple must pay Revenue. An escrow account that has held the long-contested payment, plus interest, for the past six years currently has about €14.1 billion of assets.
The surplus will be the equivalent of 7.5 per cent of gross national income-star, a measure of the economy that largely strips out the activities of foreign multinationals operating in the State.
The Department of Finance estimates that a further €15.9 billion of corporation tax receipts this year are windfall in nature. Excluding these and the Apple money would result in underlying budget deficit of €6.3 billion – the department expects an underlying deficit every year right out to 2030, the end of its current forecasting horizon.
Still, the healthy headline state of the Government’s finances led Minister for Finance Jack Chambers to unveil a €10.5 billion package of measures for Budget 2025, ahead of a general election. The Irish Times reported on Thursday that there is a clear consensus among TDs and Senators that an election will be held in November, notwithstanding statements from Taoiseach Simon Harris and Tánaiste Micheál Martin holding out the possibility of a February poll.
The latest Exchequer returns also show that income tax, the Government’s biggest tax line, increased by 7.1 per cent to €24.8 billion for the first nine months of the year, while VAT, the second-biggest, rose 7 per cent to €17.9 billion.
Capital gains tax was the only category that saw a decline, falling 6.4 per cent to €423 million.
Gross revenues rose 9.3 per cent on the year to €83.1 billion for the first nine months of 2024, while total expenditure amounted to €78.1 billion.
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