Exchequer returns - December 2024
Commenting on today’s Exchequer figures for December, Tom Woods, Partner at KPMG, says:
December’s tax receipts show that 2024 marks the fourth record-breaking year in a row of increasing tax yields, with €108 billion collected, an increase of nearly €20 billion compared to 2023. In the last decade the tax take has more than doubled.
Income tax revenue grew by 6.6%, or €2 billion due to a combination of approximately 100,000 new jobs added to the workforce and an increase in wages, underscoring the strength of the labour market in 2024.
VAT yields remained strong throughout the year, while corporation tax yields also exceeded previous records, even before factoring windfall payments of €11 billion from Apple in 2024.
The Irish economy has consistently proved its resilience despite nearly a decade of economic and geopolitical turbulence. Notwithstanding this, the current scale of geopolitical and economic uncertainty calls for substantial investment to address the national infrastructure deficit.
It is critical that we use a portion of the tax surpluses to urgently tackle infrastructural challenges to secure current and future waves of business investment and position us for future economic and societal prosperity.
Those involved in government formation talks now have a seminal opportunity, given exchequer resources, to devise a programme for government to address these issues.
Capital Gains Tax
CGT yields for 2024 were up €187 million or 12.3% on 2023. While the increase in the yield reflects a positive market response to reducing interest rates, CGT receipts continue to be significantly lower when compared to years when the rate was 20 percent.
Policymakers should consider reducing the 33 percent rate to encourage greater capital tax receipts.
