The latest Exchequer figures provide more good news for the government, with no obvious signs of a dip in tax revenues.
Income tax figures have been strong all year and continued this trend in May, with year-to-date receipts now 17% ahead of last year. While there was a slight slowdown in growth in May, this would appear to be a timing issue.
May is a "VAT month", with strong receipts reflecting robust consumer spending, including online purchases. While inflation plays a part in the strong returns, it's also clear that so far the crisis in the Ukraine, or the risk of substantial interest rate hikes, has not had a significant impact on consumer confidence.
May is normally the first key month for corporation tax returns. However returns this year have already been exceptional. May continued this trend, with year to date corporate tax receipts now €2.3bn ahead of the same period in 2021.
With more pessimistic economic forecasts for the rest of 2022, we may see a dip in corporate tax revenues next month, as lower profit projections will impact on preliminary tax payments in June and later months of the year.
Overall, while May was yet another good month for the Exchequer, there will be nervousness regarding the impact of a global slowdown on tax receipts for the remainder of the year, in particular corporation tax returns.