Exchequer returns - December 2025
Commenting on exchequer figures for December, Orla Gavin, Head of Tax at KPMG, says:
It is remarkable to note that 2025 represents the fifth consecutive year in which tax receipts have reached new heights. A record €105.7 billion was collected in 2025, marking an increase of nearly €8.6 billion over 2024. Over the past decade, we have witnessed the tax take more than double - an extraordinary trajectory for the Irish exchequer.
The 4.3% growth in income tax revenue, amounting to €36.6 billion, is driven by Ireland’s largest ever labour force of 2.82 million in 2025, alongside higher wages. VAT receipts have held strong linked to healthy levels of consumer spending as well as price inflation, and underlying corporation tax yields have once again surpassed previous records, further demonstrating the resilience of Ireland’s business environment in a year of uncertainty.
Looking forward, 2026 marks the first year for tax payments in relation to the OECD’s Global Minimum Tax or “Pillar Two” in Ireland. This is projected to raise an additional €3 billion for the Irish exchequer in 2026 due to the increased 15% Pillar Two rate. Yesterday, the OECD published updates to the global minimum tax rules to address US concerns following agreement by the G7 last June. While it is too early to tell the broader impact of these updates, what is evident, however, is the significant complexity now facing Irish and multinational businesses and the urgent need for Ireland to safeguard its competitiveness in the coming year.
Capital Gains Tax opportunity
CGT receipts for 2025 increased by €432 million, or 25% over 2024, reflecting the significant level of deal activity over the year. However, it is important to recognise that, even with this increase, CGT revenues remain well below the levels seen when the rate stood at 20%, making a strong case for the current 33% rate to be reduced. This could prove instrumental in stimulating greater investment activity and boosting capital tax receipts for the exchequer.
