April was another robust month on the tax receipts front, as evidenced in the latest Exchequer figures.
Tax revenues year to date are already €5bn, or 31%, ahead of 2021, which is a phenomenal result for the Exchequer.
Income tax figures continue to impress, driven by strong earnings across key sectors. Year to date, income tax receipts are now 19% ahead of the 2021 comparable, with no sign of a slowdown. April itself was particularly strong, up 28% on April 2021.
While April is a quiet month for VAT, the year to date figures are equally impressive, 29% ahead of the same period in 2021. High inflation and strong consumer spending mean that VAT returns are likely to remain strong throughout 2022, notwithstanding the negative impact of the war in Ukraine on global economic growth.
Although normally quiet months, corporation tax receipts in the first four months of the year have been exceptional. While this is partially down to timing, it is also the result of strong profitability in the ICT sector. However corporate tax receipts in Ireland are heavily influenced by the earnings of large multinationals; a global economic slowdown would have a disproportionate impact on corporate tax returns.
It is interesting to note the strength of capital gains tax receipts, significantly ahead of the 2021 equivalent. An increase in both asset prices and deal activity is driving this growth.
Overall, after four months of the year the Exchequer is in a very strong position, although this needs to be viewed in the context of future higher spending requirements as a result of the Ukrainian crisis.
