Tax receipts steady in February; public expenditure reflects Government priorities

5th March, 2024

  • Today’s Exchequer figures show that tax revenues to end-February were €12.0 billion, 5½  per cent above the same period last year;
  • Income tax receipts amounted to €5.3 billion to end-February, up by €0.3 billion or 5.7 per cent on last year;
  • Total gross voted expenditure to end-February amounted to €15 billion, €2.7 billion or 22 per cent above the same period in 2023 and €148 million or 1 per cent above profile;
  • An Exchequer deficit of €0.1 billion was recorded to end-February. This was an improvement of c. €2½ billion on last year, but this is driven by the transfer to the National Reserve Fund in February 2023.

 

Tax receipts were €12.0 billion to end-February, up by €0.6 billion or 5½ per cent on the same period last year, driven by growth in income tax, VAT and excise duties. 

At €5.3 billion to end-February, income tax receipts remain steady, up by €0.3 billion or 5.7 per cent on 2023.

February is a non-VAT-due month and receipts collected were accordingly modest. Cumulatively, receipts to end-February stand at €4.3 billion, up by €0.2 billion or 4.8 per cent on last year.

At €0.6 billion in the period, corporation tax receipts are down slightly on last year. However, there have not yet been any significant payment months for this revenue stream.

Total gross voted expenditure to end-February amounted to €15 billion, €2.7 billion or 22 per cent above the same period in 2023 and €148 million or 1 per cent above profile. Gross Current Expenditure is above profile by €204 million or 1.5 per cent and €2.3 billion or 20 per cent up on last year. This reflects higher investment announced in Budget 2024 across a range of priority areas and an additional pay day in the first two months of 2024 compared to 2023. Gross Capital Expenditure is up by €381 million or 54.8 per cent on last year reflecting the ramping up of the National Development Plan. 

An Exchequer deficit of €0.1 billion was recorded to end-February, up by almost €2½ billion on end-February 2023. However, this is due to a technical factor: €4 billion was transferred to the National Reserve Fund in this period last year, which reduced the Exchequer balance by the same amount. When this is accounted for, the underlying position for the period is a deterioration of some €1½ billion on last year, with increased public expenditure offsetting growth in tax revenues.

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

“Today’s figures largely represent the continuation of trends observed last month and towards the end of last year. The 7% increase in tax revenues in February compared to the same month last year is to be welcomed, and is further evidence in particular of the strength of the labour market. The 5.5% growth in tax revenues across the first two months of the year is broadly consistent with our forecast on Budget day. However, I would emphasise that it is too early at this stage in the year to draw any conclusions about the trajectory of tax receipts, particularly before the key corporation tax payment months. The coming months will provide a firmer indication of the pattern of tax receipts across the year. Overall, our economy has proven to be remarkably resilient against the backdrop of significant external uncertainty. In a more shock-prone world, it is essential that we maintain our public finances on a sustainable footing: this is the best way to ensure that we are in the strongest possible position to respond to external challenges. Work on drafting the legislation to provide for the Future Ireland Fund and the Infrastructure, Climate and Nature Fund is now at an advanced stage, and I look forward to bringing it to government shortly.”

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

“Expenditure of €15 billion to end February demonstrates the continued substantial investment across a range of public services. Due to calendar timing, a portion of the 22 per cent year-on-year increase can be attributed to an additional February payment date for certain schemes and payroll across public sector workforce. Overall, it reflects the Budget 2024 approach focused on delivering our economic, social and climate ambitions. It also reminds us, at this early point in the year, of the necessity of adhering to spending plans so that we can properly manage our finances and ensure that services are provided in as timely and efficient way as possible.

“Capital expenditure is over €380 million higher at the end of February this year than at the end of February in 2023. This is almost a 55 per cent increase in capital expenditure year-on-year. This reflects the ongoing delivery of National Development Plan including progress on the Government’s ambitious housing targets with an increase in capital spending in the Department of Housing, Local Government and Heritage of 166 per cent in comparison to the first two months of 2023.”

 

ENDS

 

Fiscal Monitor February 2024