September Exchequer figures: Strong tax returns highlight Budget 2026 considerations

The September Returns represent a solid performance for the Irish Exchequer. The good news continues for now on the corporation tax front, as receipts were 20% ahead of the same month last year. This tells us corporate profitability was strong in 2024 as September is the final deadline for balances relating to 2024 profits to be paid. Given the macro-environment, 2025 may be more challenged in profitability terms, but it will be November by the earliest before we get any indication of this in these figures. However, the strength of the 2024 numbers do give additional comfort.

VAT receipts were 4.7% ahead of the same month last year, which indicates a solid performance in the domestic economy, including the hospitality sector. Income tax was 2.2% lower year-on-year, which reflects a slight increase in unemployment over that period, albeit overall employment levels remain strong.

Ahead of the Budget, one of the big talking points is the mooted VAT reduction for the hospitality sector. These figures underscore our view that this should be considered very carefully. Hospitality businesses are facing a number of cost pressures, which include VAT but also things like wage inflation, PRSI increases, auto-enrolment, energy and more. It is debatable as to whether a VAT cut would meaningfully address the challenges the sector faces.