Tax trends and economic signals: A strong June for Ireland’s Exchequer
Corporation tax receipts were positive in June, which is very welcome following a surprise year-on-year decline in May. June is an important month for these receipts, as large firms who end their financial years in December face a preliminary tax deadline. These payments are typically based on the 2024 financial year, which was a strong year for profitability, and this is the likely reason for the positive figures.
Despite the lingering threat of economic headwinds, consumer spending has remained robust, which is reflected in the steady VAT receipts recorded last month. Income tax receipts also remained strong as Ireland continues to experience full employment.
Overall, Ireland remains in a strong Exchequer position, notwithstanding the macro policy shifts at global level. From 2014 to 2024, corporation tax receipts grew from €4bn to almost €30bn, excluding the Apple tax windfall. Concerns remain over the policy environment. However, the true impact on the Irish exchequer, if any, is unlikely to be seen until 2026 when most companies will make their payments relating to 2025.
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