Corporation tax helps drive Government’s exchequer balance to healthy surplus
Surging tax payments by companies propelled the Government’s exchequer balance to healthy surplus in July while spending came in a touch lower than expected, putting the Department of Finance on track to achieve a second successive budget surplus this year.
Tax payments by a handful of American multinationals here have delivered €14bn more than expected to State revenues over the past four years, helping to plug the budget gap and allowing Minister for Finance Paschal Donohoe to deliver on his budget plans despite repeated overspending on health.
Corporation Tax receipts hit €437mn in July, bringing the total so far this year to €4.61bn a figure that once again exceeded government expectations by 4.8pc and beat last year’s outcome at the same stage by a whopping 10.3pc.
The continued outperformance by company tax receipts comes amid concerns that the State is overly dependent on a small number of companies for a large part of its revenues at a time when a move to new global tax rules will reduce Ireland’s investment appeal.
Elsewhere on the revenue side, July was a Vat-due month and receipts were €125m ahead of the monthly profile bringing the year-to-date figure to €9.75bn.
There was however a €142m shortfall on income which the Department of Finance said was due to a timing issue which is expected to unwind.
On the spending there was no detailed breakdown beyond the headline numbers which showed net voted expenditure of €29.41bn, in line with official forecasts, while non-voted spending of €5.7bn was down by 2pc from last year.