Exchequer surplus of €1.2 billion in 2023; tax revenue in line with expectations

4th January, 2024

  • Tax revenue in 2023 was €88.1 billion, an annual increase of €5.0 billion (6 per cent) and in line with Budget 2024 projections;
  • Income tax receipts of €32.9 billion were €2.2 billion (7.1 per cent) ahead of 2022, reflecting the strength of the labour market;
  • Corporation tax receipts of €23.8 billion were €1.2 billion (5.3 per cent) up on 2022, more modest growth than in recent years;
  • VAT receipts in the year of €20.3 billion were up by €1.7 billion (9.4 per cent) on the previous year;
  • Total gross voted expenditure in the year amounted to €94.7 billion, €5.9 billion (6.9 per cent) ahead of last year;
  • An Exchequer surplus of €1.2 billion was recorded in 2023, around €1 billion below the Budget 2024 forecast, largely due to higher public spending.
  • A General Government Surplus of just under €8 billion is estimated for last year, equivalent to 2.75 per cent of GNI*.

An Exchequer surplus of €1.2 billion was recorded last year.  This was a decline of €3.8 billion on the surplus recorded in 2022, with growth in tax revenue offset by several factors, including increased public expenditure as well as the transfer of €4 billion from the Exchequer to the National Reserve Fund in the first half of the year (this is neutral from a general government accounting perspective).

Total tax receipts amounted to €88.1 billion in 2023, €5.0 billion (6 per cent) higher than in the previous year, driven primarily by growth in income, VAT and corporation taxes.  The outturn was in line with the Budget 2024 projections.

Income tax receipts of €32.9 billion last year were €2.2 billion (7.1 per cent) ahead of 2022, reflecting strong employment and nominal wage growth.  VAT receipts for the year amounted to €20.3 billion, €1.7 billion (9.4 per cent) ahead of 2022, boosted by higher levels of consumer spending.

Corporation tax receipts closed the year at €23.8 billion, €1.2 billion (5.3 per cent) higher than in 2022, a more modest growth rate than was the case in previous years.  

Excise receipts in 2023 were €5.6 billion, up €0.2 billion (3.2 per cent) on the previous year.

Total gross voted expenditure for the year amounted to €94.7 billion, up by €5.9 billion or 6.9 per cent on 2022.

Commenting on the figures, the Minister for Finance, Michael McGrath T.D. said: 

“The end-year figures show an Exchequer surplus of €1.2 billion in 2023.  Tax receipts came in largely as anticipated and reflect the underlying strength of our economy, especially the labour market. 

“It must be acknowledged, however, that the budgetary surplus includes windfall corporation tax receipts which, if excluded, would result in an underlying deficit.  In this regard, it is important to stress the more modest growth rate in this revenue stream over the past year as well as the inherent volatility in these receipts.

“Indications are that pandemic-era surge in exports in a small number of sectors – which drive corporate profitability in Ireland – are now unwinding; this would mean more modest growth in corporation tax receipts in the coming years.

“These developments underscore the importance of ensuring that permanent fiscal commitments are not made on the basis of transitory revenues.  The establishment of the two new-long term savings vehicles (the Future Ireland Fund and the Infrastructure, Climate and Nature Fund) will allow us to prepare for future structural challenges while limiting our exposure to volatile windfall revenues.

“At the same time, Government continues to invest in public services and in boosting the productive capacity of our economy.”

The Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe T.D. said:

“Today’s figures are a testament to the Government’s commitment to sustainable investment in public services, employing a well-balanced budgetary strategy. In 2023, Gross Voted Expenditure reached €94.7 billion, a €5.9 billion (6.7%) increase from the previous year. 

“This substantial spending supports ongoing enhancements in public services, social assistance, and infrastructure. These supports provide benefits for our growing and changing population including childcare, healthcare, education, and increased social assistance payments. This expenditure reflects the Government’s dedication to addressing external challenges comprehensively, encompassing Cost of Living packages, aid for those affected by the Ukraine war, and supporting our public services with the legacy impact of the pandemic. 

“Looking forward to 2024, the recently released Revised Estimates, with Gross Voted Expenditure of €96.6 billion, reaffirm the commitment to providing support and enhancements across public services including our schools and our hospitals. It will enhance our infrastructure providing more beds in hospitals, more homes and supporting our transport network across the country. This funding will also facilitate improvements for households, including a €12 per week increase in social protection payments, reduced childcare costs, extension of the free school book scheme, and an expanded school meals programme.”

ENDS

Fiscal Monitor December 2023

 

Notes to the Editor

Actual General Government Balance is measured by the Central Statistics Office and the actual outturn for 2023 will be published in early April.