Exchequer returns February 2025 – Peter Vale commentary

The Exchequer continued its strong start to 2025, with tax receipts running over 12% ahead of February 2024. 

Income tax returns were particularly strong, up 9.4% on the same month last year, despite tax cuts that took effect on 1 January 2025.  

The numbers reflect an economy now technically at full employment, consistent with the latest CSO figures.  

February is a quiet month for VAT but the expectation is that receipts for the year should remain strong, fuelled by greater disposable income, the Budget 2025 spending package and falling interest rates.  

While February is normally a quiet month for corporation tax receipts, a one off payment was received in February which boosted receipts significantly.  An additional payment relating to the Apple case added further to the surplus.

Looking forward, tariffs and tax changes both have the potential to adversely impact our corporation tax receipts.

In addition to their negative economic impact, higher tariffs could reduce the profits of Irish companies selling into the US, with a knock on impact on corporation tax receipts here, in particular if the tariffs remain in place.

We await any new specific tax measures to be announced by the new US administration.  New US tax measures could also further impact corporation tax receipts, although we would not expect any dramatic drop.

Overall, while another solid month for the Exchequer, a lot of uncertainty regarding future corporation tax figures in particular.