Exchequer receipts increase by €3.5 billion in Q1

Commenting on exchequer figures for March, Tom Woods, Head of Tax at KPMG, says:

The news that Ireland’s tax receipts for Quarter 1 are €3.5 billion or 17% ahead of the same period last year is a positive development on a day dominated by global trade tensions. The year-on-year growth is driven by a robust performance across all the key tax heads, with income tax up 3.6%, corporation tax up 24% and VAT up 6.8% on last year, underscoring the current strength of the labour market and Irish economy. 

However, the challenge now is whether Ireland’s future tax revenue can withstand the pressures arising from global trade tensions and additional tariffs. The immediate effects on trade will be visible on tariff implementation, but the full impact on profitability, employment and the related tax revenues will take longer to manifest.

Notwithstanding that Ireland’s tax revenues are inextricably linked to our international trade position, there are key areas Ireland can and should focus on. These include strategic investment in much needed infrastructure, improving competitiveness and providing supports for Irish businesses to diversify into new markets.