Strong growth in tax revenues and decreased pandemic spending this year have significantly shrunk the Exchequer deficit, new figures from the Department of Finance show.
Big increases in corporation tax, income tax and VAT continued in April, cutting the deficit to €1.1bn in the year to date, or just €800m on a rolling 12-month basis.
The deficit at the same time last year was €7.6bn, reflecting high levels of Government spending on Covid support schemes at the time.
Tax receipts in the first four months of the year have come in at €21.1bn, or 31pc higher than the same period in 2021. Meanwhile, total expenditure was €31bn, or €2.4bn less than last year.
Much of the increase in April was driven by booming income taxes of €2.7bn - the bulk of the €3.9bn collected during the month.
On a cumulative basis, income tax stood at €9.5bn at the end of April – the largest tax heading and €1.5bn ahead of the same period last year.
That figure was 28pc higher than April 2021, but the Department attributed the large increase to partly to the end of tax warehousing this year and partly to an extra weekly pay day being included in the figures.
Corporation taxes were similarly affected by timing issues, according to the Department.
So far this year corporation tax receipts stand at €2.3bn, or €1.7bn more than the first four months of 2021. But companies don’t necessarily pay taxes on a rolling basis and only the final figures in the last quarter of the year will be definitive.
April was a non-VAT month for businesses, so only €200m was collected, but total VAT revenue of more than €6bn in the year to date is 29pc ahead of last year’s number of less than €4.7bn, indicating a strong rebound in post-Covid consumer activity.
Government spending on Covid has tapered significantly this year as the Employment Wage Subsidy Scheme (EWSS) and other supports have been gradually wound down.
Just €73.4m was spent on EWSS in April, the second lowest on record since the scheme came into effect in July 2020, replacing the earlier Temporary Wage Subsidy Scheme. The subsidy has been phased out for most businesses, after nearly €8bn in direct payments and PRSI foregone over nearly two years of operation.