Higher tax receipts help lower deficit by €2.8bn

The deficit at the end of August stood at €6.82 billion

In the latest Exchequer Returns released this afternoon by the Department of Finance, the deficit at the end of August stood at €6.82 billion.

This compares to a deficit of €9.452 billion recorded over the same period last year.

On a 12 month rolling basis, the Exchequer deficit at the end of August was €9.547 billion.

Corporation tax of just over a billion euro was collected in August (€1.043 billion).

That was €797 million or 323.1% ahead of what was targeted for the month.

Cumulatively to August, just over €7 billion has been collected so far in corporation tax which is ahead of profile by €859 million or 14%.

That figure is net of €452 million set aside for the Covid Restrictions Support Scheme (CRSS).

In a statement, the Department of Finance said the higher figure for corporation tax was due to higher than expected payments from a number of big firms in the computer services sector.

August is non-VAT due month but cumulatively €9.8 billion has been collected so far which is €577million or 6.2% ahead of target.

Compared to last year, the cumulative figure to the end of August is 25.9% ahead, reflecting the strong recovery in spending by consumers this year.

Overall tax receipts to the end of August are ahead of profile by just over €2 billion (€2.0366 billion) or 5.4% at €39.4 billion.

Expenditure is running €1.7 billion or 3% below profile at €53.4 billion.

Minister for Finance Paschal Donohoe

Commenting on the figures, the Minister for Finance, Paschal Donohoe said corporation tax receipts in August were “unusually high”.

However, he said we cannot rely on such receipts over the medium to long-term.

“The best form of defense against the potential reduction in corporation tax is to reduce the deficit.

“Budget 2022 will build on the framework set out in the Summer Economic Statement, showing a credible path towards fiscal sustainability while allowing continued investment in our public services, particularly in capital infrastructure,” he said in a statement.

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