Exchequer returns March 2025 – Peter Vale commentary

On a day dominated by tariffs, there was some good news for the Exchequer in the March tax returns.

Income tax receipts stalled slightly in March but remain ahead for the quarter, buoyed by an economy at close to full employment.

VAT returns for the month were up 6.5% on 2024 equivalent, reflecting strong consumer spending despite the global economic turmoil generated by the threat of tariffs in particular.

Corporation tax receipts for March were robust, which for the most part will reflect 2024 corporate profits.

The tariffs announced yesterday will impact the 2025 profits of businesses based in Ireland and could significantly affect the domestic economy, with the risk of job losses and a likely fall in disposable income and spending. Income tax and VAT receipts will be at real risk in such a scenario, not just corporation tax.

Irish exporting companies will likely bear at least a portion of the tariff cost, meaning a reduction both in sales revenues and profits.

If the tariffs are expanded to include the pharmaceutical sector, the impact on corporation tax receipts could be both significant and immediate.