'The key focus in the latest Exchequer figures was on corporation tax receipts. June is a key month as it provides a good indication as to where the full year corporation tax numbers will land.
The positive news is that June corporation tax figures were significantly ahead of target, leaving the year to date position c.€250m ahead of what was a very strong performance last year.
While global tax changes leave considerable uncertainty regarding future corporation tax receipts, the robust figures year to date show how key sectors such as pharma and technology have been left relatively unscathed by COVID. With income tax receipts remaining remarkably resilient, it now looks like there were be a large tax surplus at year end, possibly as large as €3bn (over forecast). Add in the fact that VAT receipts have returned to pre COVID levels - a remarkable achievement - it shows how well the Irish economy has weathered COVID.
It leaves the government in an interesting position approaching Budget 2022. There may now be scope to consider reductions to our relatively high marginal income tax rates, although this could prove politically challenging.
Overall this was another very strong set of Exchequer figures, resulting in a surplus over target of almost €1.5bn at the mid-year point.
