Exchequer returns - January 2024

Commenting on today’s exchequer figures for January, Tom Woods, Head of Tax at KPMG, says:

"Tax receipts for 2024 have got off to a solid start with €358 million or 4.8% more tax collected in January than in the same month last year.  In line with other years, January is not an important month for corporation tax, so income tax, VAT and excise duties are mainly driving the growth in today’s figures.  March will be the key month in Quarter 1 to gauge the performance of Corporation Tax receipts.

January is the biggest month for VAT receipts as it encompasses the Christmas trade with the VAT take for Christmas 2023 up 4% or €148 million on the previous year reflecting sustained consumer spending along with inflation on the cost of goods and services. 

Income tax for January is also up by 2.9% or €82 million on the same month last year in line with a buoyant labour market notwithstanding a slight increase in the rate of unemployment for January 2024 of 4.5% compared to 4.2% in January 2023. 

Excise duties and other taxes were also up €128 million compared to last year.

While consumer demand is strong as evidenced by the increase in VAT receipts, inflation, high interest rates and rising employment costs continue to put pressure on SMEs.  Yesterday’s announcement by Minister McGrath to cut the interest rate on warehoused tax debt to zero should provide some welcomed additional support to viable but struggling SMEs. A vibrant and successful domestic SME sector is crucial for Ireland’s continued growth and success."