Ireland: Corporation tax revenue surges in August – Country on track to achieve budget surplus

Ireland collected about twice as much revenue from corporate taxes as projected, data showed on Friday, further bolstering a government budget surplus that the government in Dublin plans to use to help businesses and consumers deal with the energy crisis.

Taxes paid by businesses in the country, mainly large multinationals attracted by the country’s particularly low corporate tax rate, have increased in recent years, reaching close to 25% of total revenue.

Ireland’s Treasury had planned to collect €1.2bn from the corporate sector in August, but ended up collecting €2.7bn, compared to €2.4bn in income tax revenue.

In the first eight months of the year, the Republic of Ireland has collected 11.8 billion euros, about 5 billion more than the corresponding period in 2021, mainly due to an increase in corporate profitability, according to Reuters.

The corresponding increase in income tax revenue is 9%, exceeding forecasts by 2%.

Employees of companies such as Google, Apple, Pfizer now represent, with their tax payments, 33% of income tax revenue in the country, as they are highly paid.

With government spending down 3.5% year-on-year due to the pandemic recession, which required fiscal measures in 2021, the budget surplus reaches €5.6 billion on a 12-month rolling basis (end of August).

se sharply to stand at 5.6 billion euros on a 12-month rolling basis at the end of August.

The surplus is expected to reach 2% at the end of the year.

The Irish Fiscal Advisory Council (IFAC) says that, without the rise in corporation tax revenue, the economy was heading for a 2% budget deficit by 2022.