Bumper corporation tax receipts pushed the overall tax–take in November to €631m ahead of target.
Department of Finance show that taxation receipts for the month of November were €938m higher than in the same month last year, boosted by very strong corporation tax receipts. November is the month when must businesses pay their tax, making it a key point for budget arithmetic.
Minister Paschal Donohoe welcomed the numbers, and said the latest higher than expected corporation tax income will not be used to boost increased spending.
“These additional receipts are not being used to finance additional expenditure. Instead, all of the excess will be set aside to reduce – and possibly eliminate – the headline deficit, putting Ireland in a stronger position and better able to meet the challenges that may lie ahead,” Minister Donohoe said.
Up to now, a surge in tax receipts has largely been eaten up by overspending at the Department of Health. Expenditure in November was marginally ahead of profile, the Department of Finance said.
“Some of the increase in corporate tax receipts this year is due to one-off factors, which was signaled at Budget time and will not be repeated. For next year, my Department has taken account of this and has projected a decline in corporation tax receipts for 2019; expenditure plans have been set on this basis. Having said that, I am conscious of the increasing concentration of overall taxation revenue on corporation tax receipts and I intend to bring to Government in the new year a set of proposals on how this can be addressed,” Minister Donohoe said.
The increase in the amount of corporation tax paid in Ireland this year is partly down to a rise in company profits – and in particular the profits booked in Ireland by some large multinationals. It is also due in part to one-off changes in global tax practice that mean around €700m of extra tax will be paid here this year, but its not expected to recur.