Exchequer returns – July 2022

Commenting on the Exchequer Returns for July, Tom Woods, Partner and Head of Tax in KPMG says, “global economic uncertainty has yet to make an impression on Irish tax receipts as evidenced in the latest exchequer returns which show a surplus of €5 billion for the year to date.”

This represents a swing of €10.7 billion from the deficit of €5.7 billion recorded this time last year. Of course, expenditure on Covid supports was a factor in last year’s deficit but the robust nature of the Irish economy in 2022 must be acknowledged.

Tax revenue to the end-July comes in at €43.5 billion, which was €8.3 billion or 23.5 percent ahead of this time last year. The increase is driven again by strong growth in Corporation Tax, VAT, and Income Tax.

July is a VAT-payment month, and receipts of €2.8 billion were collected. Cumulative VAT receipts to date in 2022 stand at €11.9 billion, an increase of €2.2 billion, or 23 percent, on the same period in 2021. To give context to VAT collected in July 2022, it should be noted that VAT receipts for July 2021 at €2.4 billion were also very strong coming in at 7.5 percent higher than July 2019, a pre-pandemic environment.

Tom Woods concludes, “while inflation is a factor in tax receipts this year, there is no evidence yet of the global slowdown impacting Irish VAT receipts which is the typical barometer of changes in consumer spending.”