There were no major surprises in today’s Exchequer returns for February, in what is typically the quietest month of the year on the tax receipts front.
Income tax receipts for the month grew by 9.2% over February 2023, although the Department pointed to timing factors explaining an element of this increase. Overall, despite evidence of a slowdown in wage inflation, income tax receipts remain strong, likely fuelled by greater numbers in employment.
February is a non-VAT month. However after a good start in January and the possibility of interest rate cuts later in the year, at this point VAT returns look set for a strong year. While inflation is a factor, the positive VAT figures to date point to more than inflation underpinning the growth.
Both January and February are typically quiet months for corporation tax receipts. The exceptionally strong finish to 2023 will fuel hopes that 2024 can see a repeat of last year’s stellar corporation tax receipts. Longer term, the impact of the higher 15% rate for large groups could see corporation tax receipts increase further from 2026 onwards.
Overall, February was a solid if uneventful month for the Exchequer, with receipts up 7% on the same month in 2024.
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