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Exchequer returns January 2024 – Peter Vale commentary

Satisfactory start to year for Exchequer

Tax receipts for January 2024 exceeded January 2023 by 4.8%, which will likely be seen as a satisfactory start to the year given ongoing uncertainty in the global economic environment.

Income tax receipts for January were 2.9% ahead of January 2023. With signs of a levelling off in income tax receipts in the latter half of 2023, it’s not surprising to see only a small increase in January.

Furthermore, while numbers in employment remain high, a reduction in taxes for most employees from 1 January will have pushed down income tax returns.

There was good news on the VAT front, with strong spending over the holiday period leaving VAT receipts 7% ahead on an adjusted basis over the 2023 equivalent. With interest rates likely to have peaked, there will be optimism that this level of spending and resultant VAT receipts can be maintained throughout the year.

While inflation is a factor, the strong VAT figures point to more than inflation underpinning the growth.

January is a quiet month for corporation tax receipts, with €57m collected during the month. It will be a number of months before we know whether the stellar figures of 2023, in particular November receipts, can be matched or even exceeded this year. Again, much depends on the profitability of a small number of large MNCs based here.

Overall, a quiet start to the year but likely nothing to alarm the Department in the figures.