October 19, 2021

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Irish revenue increases further thanks to the reopening, corporation tax – NEWSWARDEN

October 4, 2021

DUBLIN (Reuters) – Ireland raised 5.8% or 2.5 billion euros ($ 2.9 billion) more in taxes than expected during the first nine months of the year due to an additional surge in VAT receipts and strong corporate tax returns, the finance ministry said Monday.

Tax revenues proved to be more resilient than many anticipated during the COVID-19 pandemic, and the reopening of nearly every part of the economy from a third bloc in recent months has led to a sharp rise in most categories.

VAT revenue, which is collected every two months, was 13.7% higher than the target for September, a similar level in July when the hospitality sector reopened. This has brought the cumulative total of VAT for the year to date to 7.7% above forecasts.

The amount of VAT collected so far this year is also 1% higher than in the first nine months of 2019, before the pandemic hit.

Corporate tax returns, which mostly come from the country’s large multinational sector and have more than doubled to record levels since 2014, were 14.8%, or 1 billion euros, higher than expected at the end of September.

The largest category, income tax, was 0.8% higher than the target.

With spending 3.2% below forecast, the tax authorities recorded a lower deficit of € 9.2 billion on a rolling 12-month basis.

The government is likely to have a lower budget deficit this year than the 5.1% of gross domestic product forecast in July, Finance Minister Paschal Donohoe said last week.

(1 $ = 0.8600 euros)

(Reporting by Padraic Halpin; Editing by Andrew Heavens)

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