Bumper corporation tax receipts the highlight in latest exchequer receipts.
After several months of weak returns, the key focus today was on corporation tax.
Somewhat surprisingly, given the weak receipts of the last three months, November’s corporation tax receipts have far exceeded all expectations and set a new monthly corporation tax record of €6.3bn, which was almost 27% higher than the same month last year (€5bn).
Year to date, corporation tax receipts of €22bn are now 4.3% higher than 2022 (€21.1bn). This is a remarkable performance given the more recent weak returns.
These exceptional corporation tax receipts most likely reflect the strong performance of the technology sector, which this year has significantly outperformed the pharma sector, with the latter having enjoyed a boom during COVID.
This is consistent with what we are seeing internationally, where to date we see no evidence of behavioural changes amongst large multinational groups based here, despite upcoming international tax law changes.
If there is a pick-up in global economic activity next year, then it is possible that 2024 receipts may even exceed what now looks like being a stellar 2023.
Both VAT and income tax receipts are holding up reasonably well. The economy remains at close to full employment and despite pressure on disposable income, consumers continue to spend.
Overall, while today’s figures far exceeded expectations, they continue to reflect our ongoing reliance on a small cohort of large companies, which underscores the volatility in the corporation tax numbers.
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