- Today’s Exchequer figures show that tax revenues in the first quarter amounted to €19.7 billion, almost 15 per cent higher than last year;
- Income tax receipts of €7.4 billion were collected, up 8 per cent on an annual basis;
- Corporation tax receipts amounted to €3.2 billion in the first quarter, an increase of over €1.3 billionrelative to the same period of last year;
- VAT receipts totaled €6.8 billion in the first quarter, up 16 per cent on an annual basis although the comparison is distorted due to a technical factor which boosted receipts;
- Total gross voted expenditure to end-March amounted to €19.8 billion, €0.9 billion or 4.9 per cent above the same period in 2022
- An Exchequer deficit of €2.1 billion was recorded in the first quarter although this is due to the transfer of €4 billion to the National Reserve Fund in February;
Tax receipts were €19.7 billion in the first quarter, up €2.5 billion (almost 15 per cent) compared with the same period last year.
At €7.4 billion in the first quarter, income tax receipts remain solid, up 8 per cent on an annual basis, reflecting continued resilience in the labour market.
VAT receipts in the first quarter were €6.8 billion, €0.9 billion (16 per cent) higher than in the same period last year reflecting the continued momentum in consumer spending. However, the year-on-year comparison is inflated by a technical factor^; the underlying growth rate of VAT receipts was 12½ per cent in the first quarter.
At €3.2 billion, corporation tax receipts in the first quarter were €1.3 billion ahead of the same period last year. This was primarily driven by the large increase in payments during March (c. €1 billion). While subject to some uncertainty, preliminary indications suggest that this may reflect, in part, a timing issue i.e. the earlier payment of receipts.
Total gross voted expenditure to end-March amounted to €19.8 billion, €0.9 billion or 4.9 per cent above the same period in 2022 and €0.6 billion or 2.8 per cent below profile.
An Exchequer deficit of €2.1 billion was recorded in the first quarter of 2023. This compares to a surplus of €0.2 billion in the same period last year – the deterioration in the headline balance is due the transfer of €4 billion to the National Reserve Fund in February.
Commenting on the figures, the Minister for Finance, Michael McGrath T.D. said:
Today’s figures confirm strong momentum in our economy during the first quarter of the year.
The strength of income tax shows that the labour market remains resilient, while VAT receipts suggest consumer spending remains reasonably solid.
Once again, corporate tax receipts have surprised on the upside, though my officials estimate that around half of the corporate tax take is unlikely to be permanent.
It is, of course, essential that windfall corporation tax receipts are not used to fund permanent expenditure. This is why I transferred €4 billion to the National Reserve Fund in February – there is now €6 billion in the Fund.
I will also seek government approval in the coming weeks for a longer-term fund to meet the costs of an ageing population and other pressures that we know will arise in the future.
Finally, the Government will publish the Stability Programme Update on 18th April, setting out my Department’s updated economic and fiscal assessment.”
The Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe T.D. said:
The 5 per cent increase in total expenditure in the first quarter of 2023 reflects the Government’s sustained commitment to the delivery of better public services and infrastructure.
Capital investment is up almost 34 per cent on a year on year comparison. This shows the significant progress in the rollout of the NDP particularly in the Education & Housing sectors alongside strong demand for energy retrofit.
Current day to day spending increased by 3.5 per cent in Quarter 1. This demonstrates the implementation of Budget 2023 measures. This includes the expansion of critical services in areas such as childcare and health, supporting our public service workforce and helping to support living standards of our population.
ENDS
Fiscal Monitor March 2023
Notes to editors:
^ The Revenue Commissioners withheld €0.2 billion of receipts from December’s figures in order to fund potential repayments in January; these funds were returned to the Exchequer in January this year.