Continued strength in tax receipts

Commenting on today’s Exchequer Tax Receipts, Tom Woods, Head of Tax at KPMG, says: “The stellar performance of income tax, corporation tax and VAT receipts in the first half of 2023 reflects the buoyancy of the Irish economy.

June is traditionally the second largest month for corporation tax, and we saw a 20% growth in June receipts compared to last year with cumulative corporation tax receipts for the year now at €10.5 billion, again 20% higher than last year. To put this scale of growth into context, €10.5 billion for the six months in 2023 was greater than the total corporation tax receipts collected five years ago in 2018.

Despite redundancies in several sectors, the economy is technically operating at full employment which is reflected in the strong income tax receipts for the year, which are 9% higher than last year at €15.5 billion.

The strong performance of tax receipts in the year-to-date enables Government to proceed with a 2024 budgetary package of additional spending of €6.4 billion including €1.1 billion in tax measures, as set out in today’s Summer Economic Statement. It’s clear from today’s Statement that a key priority of the tax measures is to avoid workers paying additional tax due to wage inflation.”

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