One of the interesting details of April’s exchequer returns was the strength of the income tax receipts at a time when a large part of the economy remains shuttered and 571,111 people were classified by the Central Statistics Office as out of work in March.
Income tax brought in €2.12 billion last month, 3 per cent or €62 million ahead of profile, and 13 per cent up on the same month of 2020, which was effectively the first full month of our Covid-19 lockdown.
Of more significance, as noted by Grant Thornton tax partner Peter Vale, is that it was 6.5 per cent ahead of April 2019. Vale is forecasting an “unexpected surplus” in income tax receipts by the year end.
Another positive was that excise duties of €484 million were 10 per cent ahead of profile and nearly 60 per cent up year on year.
The bad news was that spending by the Department of Social Protection was €1.6 billion up and the 12-month rolling exchequer deficit stood at just under €12.5 billion.
Between January and April, some €6.7 billion was paid out by the Department of Social Protection (including for the Pandemic Unemployment Payment and the Employee Wage Subsidy Scheme), nudging it ahead of the Department of Health as the biggest draw on the exchequer finances.
Government-voted expenditure amounted to nearly €27 billion for the first four months of the year, which was €2.2 billion higher than a year ago and €800 million higher than the target. The figures also give a hint of the impact of Brexit on trade.
Customs receipts of €149 million were collected in the first four months of the year – €49 million up year on year.
“The increase in customs revenues relates to the impact of the UK’s departure from the EU customs union, whereby goods coming from the UK whose country of origin is not the UK are subject to customs duties,” the statement from the Department of Finance noted.
