The treasury recorded a surplus of 1.2 billion euros in 2023, according to figures issued by the Ministry of Finance.
This compares to a surplus of €5 billion in 2022, with the decline caused by factors including increased public spending and the transfer of €4 billion to the National Reserve Fund (NRF) in February last year.
An underlying deficit of around €6.5 billion is recorded for 2023 when “one-off” factors such as transfers to the National Rescue Fund, proceeds from disposals of bank shares and estimated “excess” corporate tax revenues are excluded.
The latest Treasury returns show corporate tax revenues reached €1.8 billion in December, up almost 20% compared to December 2022.
Annual corporate tax revenues amounted to 23.8 billion euros, an increase of 1.2 billion euros, or 5.3%, over 2022.
Corporate tax has been very volatile in recent months, coming in lower than expected in August, September and October before seeing a strong rebound in November.
“Although it remains the state’s second-largest source of revenue again this year, there has been a significant moderation in growth in this revenue stream compared to recent years,” the Finance Ministry said regarding corporate tax.
Overall, tax revenues of €88.1 billion were generated in 2023, representing an increase of €5 billion or 6% year-on-year, driven by growth in income tax, value-added tax and corporate tax.
Tax revenues worth €6.1 billion were collected in December, an 8.2% increase over the same period in 2022.
Income tax revenues of €2.6 billion were recorded in December, an increase of 4.8% on December 2022.
Overall, in 2023, income tax revenues amounted to €32.9 billion, €2.2 billion more than in 2022, reflecting a strong labor market.
Total VAT revenue reached €20.3 billion in 2023, an increase of €1.7 billion or 9.4% on the previous year.
Stamp duty revenues of €1.8 billion in the year decreased slightly, by €64 million, compared to 2022.
Capital gains tax revenues for this year were €1.5 billion, down €0.2 billion from 2022.
The capital acquisition tax collected in 2023 amounted to €634 million, a slight increase of €28 million, year-on-year.
Customs revenues of €582 million decreased by €54 million in 2022.
Capital revenues for this year amounted to 1.9 billion euros, a decrease of 3.4 billion euros from 2022.
The Finance Ministry said the decline was primarily driven by lower loan repayments to the Social Insurance Fund in 2023, which is generally net neutral, as well as lower proceeds from the sale of bank shares.
Total expenditures for this year amounted to 107.3 billion euros.
Of this amount, total spending voted on was €94.7 billion, i.e. €5.9 billion or 6.7% before 2022.
Non-voting expenditures amounted to 12.6 billion euros, a difference of 0.3 billion euros over the same period in 2022.
Finance Minister Michael McGrath said tax revenues in 2023 were largely as expected.
“It must be recognized, however, that the budget surplus includes unexpected corporate tax revenues, which, if excluded, would result in an underlying deficit,” McGrath said.
“In this regard, it is important to emphasize the more modest growth rate in this revenue stream over the past year as well as the inherent volatility of these revenues.”
He added: “Evidence suggests that the pandemic-era increase in exports in a small number of sectors – which drives corporate profitability in Ireland – is now declining; this means more modest growth in corporate tax revenues in the years ahead.”
NDP Public Expenditure, Implementation and Reform Minister Paschal Donohoe said these numbers reflect the government’s commitment to sustainable investment in public services.
“This significant spending supports continued improvements in public services, social assistance and infrastructure,” Donohue said.
“This support provides benefits to our growing and changing population including child care, health care, education, and increased social assistance payments,” he added.