Income tax and VAT deliver robust returns in August

Commenting on exchequer figures for August, Orla Gavin, Head of Tax at KPMG, says:

Today’s Exchequer returns underscore the volatility in corporation tax receipts, which dropped €1.6 billion compared to the same month last year, albeit that August 2024 corporation tax receipts were exceptional. It’s not possible to draw conclusions based on one month’s performance in an otherwise strong year to date. November will deliver deeper insights as to whether current projections of €29 billion in corporation tax receipts for the year are achievable.

No doubt the Government will focus on cumulative corporation tax receipts of €16.4 billion, which is still slightly ahead of last year, as the informative metric in its Budget 2026 deliberations.

Income tax and VAT, up 4.7% and 4.8% respectively on last year, continue to deliver robust returns, reflecting the underlying strength of the Irish economy. Receipts from Stamp Duty and Capital Gains Tax are also up on last year by 17% and 40%, respectively. Notwithstanding that these taxheads are considerably smaller than income tax, VAT, and corporation tax, their growth points to improved transactional activity in the economy.

The performance of tax receipts in the year, up 7.3%/ €4.3 billion on last year, should support the Government’s plan to introduce tax cuts of €1.5 billion in Budget 2026. While fiscal prudence is important, we urge the Government to prioritise measures which will boost SME investment and increase the delivery of affordable housing to cultivate a resilient domestic economy.