Exchequer returns - January 2026
Commenting on exchequer figures for January, Orla Gavin, Head of Tax at KPMG, says:
Looking past the skewing effects of last year’s one-off CJEU ruling payment, Ireland's tax receipts are off to a solid start with underlying growth of €48 million.
Income tax receipts were up €30 million or 1% on last year, reflecting continued strength in employment. VAT receipts were robust at €4.1 billion, an increase of over 3% from last year in line with indications that consumer spending outpaced inflation over the Christmas period. Corporation tax for January was modest at €58 million, which is usual for this time of year. Overall, these figures indicate that Ireland’s tax revenues have got off to a steady start for 2026.
Looking to the year ahead, the Government forecasts a 6% rise in income and corporation tax receipts, and a 2% increase in VAT. While these projections reflect ongoing confidence, they are more muted than in recent years, signalling a recalibration of expectations. Nonetheless, if tax revenues for 2026 surpass last year's record levels, it will be another impressive outcome for the exchequer. However, achieving sustainable growth in tax receipts hinges on Ireland’s ability to remain competitive, with simplification of tax rules and administration a key component of competitiveness. In line with the EU Commission’s call for a “decluttering” of tax rules, Ireland’s upcoming EU presidency presents an opportunity to take the lead in streamlining EU tax regulations and strengthening our competitive position for the long term.
