A surge in corporate taxes paid in October is unlikely to repeat itself, tax officials warned.
The latest financial reports from the Ministry of Finance, which show the taxes and monies paid by the government, show a deficit of 7.438 billion euros from the beginning of the year to the end of October. In the same period of the previous year, there was a deficit of 11.68 billion euros.
On a rolling 12-month basis, the Treasury recorded a deficit of just over € 8 billion. This gap is funded by borrowing and is largely due to additional expenses related to the Covid pandemic, including wage benefits and unemployment benefits.
The data shows tax revenue of € 5.081 billion in October. That was significantly higher than last year and well above projections, with the main reason being a very strong performance in corporate tax revenues, including € 300 million in tax returns.
Corporate tax revenue of 1.494 billion euros in October versus a target of 964 million euros.
The total amount was increased by the settlement of tax cases, but also reflected disproportionate payments from the life sciences sector, the Treasury said.
“It is not to be expected that such high revenues will be repeated in the coming years,” said the ministry
For the year so far, corporate tax revenues of EUR 9.5 billion are now EUR 2 billion ahead of the profile, a dramatic increase.
Corporate tax revenues have hit new highs in recent years but are extremely volatile, due to the international profitability and corporate structure of tax resident multinationals rather than the performance of the Irish economy.
Treasury Secretary Paschal Donohoe reiterated on Monday that Ireland’s signature of the Organization for Economic Co-operation and Development (OECD) global tax regime changes is likely to increase future corporate tax revenues by around $ 2 billion.
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