Exchequer returns October 2024 – Peter Vale commentary

While October is one of the quieter months for the Exchequer, the latest tax returns will make for positive reading for the Government, so close to an election.

Income tax again performed well, up 8.9% on October 2023 receipts. While the income tax cuts announced on Budget day will kick in from 1 January 2025, buoyancy in the employment market should see receipts remain strong in 2025.

October is a quiet month for VAT, with receipts year to date ahead by 7.7% over 2023. The large Budget day spending package should see VAT receipts remain buoyant for the rest of 2024 and into 2025.

Corporation tax receipts for October were heavily distorted by the receipt of proceeds following resolution of the Apple tax case. However even after stripping out these receipts, corporation tax returns year to date have again outperformed.

November is by far the most significant month for corporation tax receipts and indications are that the figures next month will be strong, leaving the Government with an expected large year end surplus. 

The US election may have a significant impact on future corporation tax receipts, regardless of the outcome. Both candidates are likely to push for tax reform that could adversely impact Ireland’s attractiveness from a tax perspective, with knock on consequences for future tax receipts here.

We would not expect any dramatic fall in corporation tax receipts, but a gradual decline is a possibility if the US implements significant tax reform. However the ability of either candidate to implement such reform is far from certain.

Overall, another strong month for the Exchequer, with all eyes on the critical month of November.