- Exchequer figures show that tax revenues to end-February were €10.1 billion, 20 per cent higher than last year and 10 per cent higher than the same period in 2020;
- Income tax receipts remain robust at €4.7 billion to end-February, up 17 per cent on an annual basis;
- February is a non-VAT due month, but on a cumulative basis receipts were strong, up 27 per cent compared to 2021 although the annual comparison is distorted due to the introduction of public health restrictions in late 2020;
- VAT receipts were up 10 per cent compared to the same period in 2020;
- Total gross voted expenditure to end-February amounted to €11.6 billion, €0.8 billion or 7 per cent below the same period in 2021;
- An Exchequer surplus of €0.9 billion was recorded to end-February. The 12-month rolling Exchequer deficit – a better measure of underlying trends - stood at €5.7 billion in February.
An Exchequer surplus of €0.9 billion was recorded to end-February 2022, a deterioration of €1.3 billion compared to January. The end-February position compares to a deficit of €0.7 billion in the same period last year. The €1.7 billion improvement in the Exchequer balance is driven by a strong increase in tax revenue. On a 12-month rolling basis — a better indicator of the trend — the Exchequer recorded a deficit of €5.7 billion.
Overall, tax receipts were €10.1 billion to end-February, up €1.7 billion or 20 per cent on an annual basis and 10 per cent higher than the pre-pandemic position in 2020. At €4.7 billion to end-February, income tax receipts remain strong, up 17 per cent on an annual basis, and reflect the ongoing recovery in the labour market as well as continued increases in wages in sectors less affected by the pandemic.
February is a non-VAT-due month, but on a cumulative basis VAT receipts of €3.4 billion were €0.7 billion or 27 per cent higher than in the same period last year reflecting, in part, the recovery in consumer spending. However, the year-on-year comparison is flattered by a number of factors including the introduction of public health restrictions in November and late-December 2020 and the reduction in the standard rate of VAT over the same period. As a result, the pre-pandemic end-February 2020 position is a more useful comparison with VAT receipts up by 10 per cent over this period.
January and February are not significant months for corporation tax and receipts of approximately €300 million were recorded to end-February, €50 million less than for the same period last year. Excise duty receipts accelerated in February reflecting, in part, the removal of public health restrictions and are now up almost 5 per cent to end-February on an annual basis.
Total gross voted expenditure to end-February amounted to almost €11.6 billion, €0.8 billion or 7 per cent below the same period in 2021. This is driven by a decline in expenditure in the Department of Social Protection due to the impact of Covid restrictions in early 2021 and the resulting increased expenditure on supports for people and businesses.
Commenting on the figures, the Minister for Finance, Paschal Donohoe T.D. said:
“Today’s figures show that tax receipts continue to record strong growth in the opening months of this year. While the annual comparisons are flattered due to a number of factors, the underlying trends are a good signal of the continued momentum in the domestic economy. The strong income tax performance reflects the ongoing recovery in the labour market, alongside continued wage increases in sectors less affected by the pandemic, while the significant increase in VAT receipts is driven by the rebound in consumer spending.
While recent trends are positive, we cannot become complacent. It is crucial that we continue to make progress along the road to recovery. Budget 2022 set a framework within which we can reduce the deficit and restore the public finances, while continuing to invest heavily in public services, particularly in capital infrastructure. ”
The Minister for Public Expenditure and Reform, Michael McGrath T.D. said:
“The figures outlined today show gross voted expenditure of €11.6 billion. Education, Health and Social Protection make up 85 per cent of this expenditure demonstrating the Government’s strong commitment to these areas. Covid supports continue to feature strongly in social protection expenditure with costs of €736 million for the Pandemic Unemployment Payment, the Employment Wage Subsidy and the Covid Illness Benefit. This reflects our ongoing commitment to people and business as we emerge from the pandemic.
Budget 2022 set out the fiscal parameters for the year within the Medium Term Expenditure Framework. This framework will allow for improvements in our public services throughout the year while supporting a reduction in the deficit and returning our public finances to a sustainable path once more.”
