The tax burden on Ireland’s economy has expanded by 25% year-to-date compared with 2021, according to the state’s October Exchequer returns.

Tax revenue to end-October stood at €63.9bn, which was €13bn ahead of the same period last year. The increase was driven by strong growth in income tax, VAT and in particular corporation tax.

Tax revenues of €6.1bn were collected in October, up by €1bn, with the bulk of the increase driven by corporation tax, which was ahead on last year by over €0.8bn.

Income tax receipts of €2.5bn were recorded in October, 12% ahead of October 2021. On a cumulative basis, the income tax haul stands at €23.9bn, over 15% ahead of the same period in 2021.

Peter Vale, tax partner at Grant Thornton, said the income tax surge reflects a combination of low unemployment levels and wage inflation. “So far any freeze on hiring in the technology sector does not appear to have impacted income tax returns,” Vale added.

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Corporation tax receipts amounted to €2.3bn in October, ahead by over €0.8bn on an annual basis.

The Department of Finance commented: “This is due to increased profitability in a small number of firms in the multinational sector, but it is not expected that these receipts will be replicated in 2023.

"Corporation tax receipts for the first ten months of the year now stand at €16.2bn, which is €6.6bn ahead of the same period last year, driven by significant increases in profitability in the multinational sector.”

Tom Woods (pictured), Head of Tax in KPMG, concurred, commenting: “Clearly this level of performance will be difficult to replicate in 2023 given the headwinds in the international and domestic economies." 

Excise duty receipts of €0.6bn were collected in October, ahead by 1% on the same month last year. For the year to date, receipts are down 2% year-on-year, reflecting the temporary reduction in excise duty on fuels.

Stamp duty receipts to end-October stood at €1.5bn, which was €100m higher than the same period in 2021, primarily reflecting a once-off payment earlier this year.

Capital gains tax receipts to end-October stood at €665m, up by over €200m compared to end-October 2021.

“The large year-on-year increase is due in part to an artificially low base in 2021 due to a technical factor that reduced receipts last year,” according to DoF.

Capital acquisitions tax receipts of €321m to end-October were ahead by €11m on the same period in 2021. Motor tax receipts of €785m were collected to end-October, broadly flat on last year.

Total gross voted expenditure to end-October amounted to €66.5bn, down 1.5% year-on-year.

Exchequer debt servicing costs to end-October was just under €3.6bn, down 1.4% and marginally under official expectations. Total debt service expenditure for 2022 was estimated at €3.9bn in Budget 2023.