Record payments of corporation tax, which have been bolstering the Exchequer finances, are still showing no signs of slackening. Some €1.8bn was collected last September, which was up €0.3bn on the same month last year.
Overall this year, €20bn in corporation tax has been paid, which is up €2.2bn on the same period in 2024.
Even when the once-off Apple back tax payment is taken out – the last €1.8bn of which was paid in the spring – the Exchequer has taken in 2.5pc more in corporation tax than it had at the same point last year.
Watchdogs who have been urging Minister Donohoe to rein in spending in Budget 2026 will find fresh ammunition for their arguments in the new fiscal details released today, however.
These show that an Exchequer surplus of €1.4bn was recorded to the end of September, which compared to a surplus of €5bn recorded in the same period last year, which represents a decline of €3.6bn.
When the Apple back-tax payment is excluded from the calculations, an underlying Exchequer deficit of €1.9bn was recorded, which is a deterioration of €6.9bn on the same point last year. The Department of Finance stressed that the underlying deficit “largely reflects the transfers to the Future Ireland Fund and the Infrastructure, Climate and Nature Fund”.
The Central Bank, ESRI and the Irish Fiscal Advisory Council have all advised the Government to rein in spending, and not to use ‘windfall’ receipts of corporation tax to fuel an economy that is already at or close to full capacity.
Responding to today’s figures, the fiscal council said; “Current spending continues to grow at a fast pace. Even if there are no cost-of-living measures in the Budget, with this pace of spending growth, current spending in 2025 is likely to be more than €1bn higher than assumed in the Summer Economic Statement in July.
“This higher baseline for spending in 2025 will need to be factored into the budgetary figures for 2026, otherwise spending forecasts will be wrong from the start.”
Exchequer expenditure to the end of September totalled €89.8bn, made up of ‘voted’ spending of €77.5bn and ‘non-voted’ of €12.3bn, about half of which was payments into the long-term sovereign savings funds.
In terms of ‘voted’ spending, this is €5.4bn or 7.5pc ahead of the same point last year, and is €0.1bn above profile, or what was planned.
Also of note was a slight reduction in the amount of income tax collected, which was down by €0.1bn or 2.2pc in September compared to the same month last year. Overall, income tax receipts for the year to date are up by €1bn or 4pc.
September is a Vat-due month, and receipts of €3.6bn represented an increase of almost 5pc on the same month last year. Cumulative receipts of €18.8bn for the year are also up by almost 5pc.
Jack Chambers, the Minister for Public Expenditure, said that the 7.5pc increase in spending included increases on social welfare and investment in health, education and infrastructure. “It has supported our country through a series of economic challenges and shocks,” he said.
Capital spending is up 19pc year-on-year, with a 29pc increase on housing.
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