Exchequer returns December 2025- Peter Vale commentary

Exchequer returns ended the year on a high, up 8.9% year on year, after excluding one off windfall receipts. 

Despite a flat December, income tax returns for the year were 4.3% ahead of 2024, reflective of an economy at close to full employment and also suggesting that wage inflation remains a feature in the Irish market.  With few income tax changes in the Budget, income tax returns should continue to climb in 2026.

The Capital Gains Tax receipts are interesting, up 25% year on year.  There is clearly significant wealth being generated in the Irish economy, which is reflected in the strong VAT figures, up 5.1% year on year.  Consumers are continuing to spend, notwithstanding the geopolitical uncertainty. 

The January VAT figures will be critical as they reflect holiday period spending – they are unlikely to disappoint.    

After stripping out the Apple tax receipts, corporation tax receipts for the year are 17% ahead of 2024, boosted by robust returns in the key months of June and November.  December itself was another strong month.  The profitability of MNCs operating in the pharma and technology sectors underpin the exceptional figures. 

2025 corporation tax receipts are triple 2019 returns, which is an incredible statistic.  With agreement reached yesterday with the US on key aspects of the global minimum tax rules, the future of the 15% corporation tax rate looks secure, meaning that the Exchequer will be further boosted in 2026.  Corporation tax receipts for 2026 are likely to post another record, potentially hitting €35bn.

Overall, another good year for the Exchequer, reporting a solid surplus even after stripping out the one off Apple tax receipts.