Latest news with #taxreceipts
Irish Times
5 days ago
- Business
- Irish Times
Corporation tax surge a sign investors have not been put off by economic uncertainty just yet
We've all heard the stories about corporation tax , how the boom in tax receipts won't last, and how the Government would be crazy to rely on windfall taxes to fund day-to-day spending. For the moment, at least, the gravy train keeps rolling, as shown in the exchequer returns for June which were published a fortnight ago. Now we have some more detail on what's happening thanks to the Government Finance Statistics for the first three months of this year published by the Central Statistics Office on Friday. As is often the case with statistics such as these, the absolute numbers are important but it's really the change that is relevant. Those changes were almost universally positive for Ireland between January and March. At the end the quarter, total Government revenue stood at €30.9 billion, the CSO said. That was €2 billion ahead of the same time last year driven by an increase in taxes of €1.5 billion and social contributions of about €500 million. Much of the tax increase came about because of a rise in, you guessed it, corporation tax. As Grant Thornton's Peter Vale pointed out, 'a key component' of the €1.5 billion increase in taxes was corporation tax, which was 'up 25 per cent over the prior year after excluding the Apple tax case-related payments. While corporation tax figures remain volatile, they continue to trend upwards,' he added. It's a movie we've seen several times at this stage, but Vale spotted a few other wrinkles in the data that are worth noting. Namely, the sharp jump in income from capital gains tax (CGT) . CGT receipts jumped 64 per cent year-on-year. That's a big rise in anyone's language. While it's true that CGT can be lumpy – all it takes is one or two big transactions to skew the numbers – it does indicate that people are still doing deals. US president Donald Trump made his 'liberation day' tariffs announcement on April 2nd, so its impact is not included in the CSO data. Yet it didn't exactly come out of the blue. He had telegraphed the move for weeks ahead of time. Clearly not everyone has been put off by the 'heightened geopolitical and economic uncertainty' that practically every company or politician seems to be citing these days. Whether that will last is another question entirely.
BreakingNews.ie
03-07-2025
- Business
- BreakingNews.ie
Corporate tax receipts surged 25% in key payment month of June
Corporate tax receipts surged by 25 per cent year-on-year in June, a key month when around one-fifth of the year's company returns is usually paid, pushing the overall tax take for the first half of 2025 up 6.7 per cent year-on-year on an underlying basis. The State has collected record levels of tax each year since 2021, mainly due to huge increases in corporate receipts that the Department of Finance had expected to fall a touch this year – excluding one-off Apple's back taxes – before returning to 2024 levels next year. Advertisement Corporate tax receipts fell 30 per cent year-on-year in May, one of the first major payment months of the year. The Department of Finance put that down to one-off factors, and the renewed growth in June left corporate returns 7.4 per cent higher in the year to date, official data showed on Thursday. Most large companies pay the bulk of their corporate tax in two payments, one in June and a larger amount in November. The Republic's huge reliance on the tax paid by a cluster of US technology and pharmaceutical firms has made it especially vulnerable to the tariff and tax plans of US president Donald Trump, who has repeatedly singled out Ireland for "luring away" companies with decades of low corporate tax rates. Advertisement Ireland Tourism tax could help fund 'significant' revitali... Read More The €7.4 billion received last month – which was more than Ireland collected in all of 2017 – suggested the exchequer could be in line for another big increase in November. The corporate tax haul, underpinned mainly by a small number of foreign multinationals, has handed Ireland the healthiest public finances in Europe and allowed it to boost government spending so far in 2025 by 8.2 per cent, 0.7 percentage points more than budgeted for. Growth of 4.3 per cent in income tax receipts and 5.8 per cent in VAT by the end of June – the other two main tax categories – helped bring the underlying exchequer surplus to €1.2 billion in June. The Department of Finance expects to end the year with a total budget surplus of 2.6 per cent of national income.
Yahoo
20-06-2025
- Business
- Yahoo
UK borrowing rises to £17.7bn, adding to pressure on Rachel Reeves
Higher tax receipts were unable to prevent a rise in public sector borrowing in May to £17.7bn, up from £17bn a year earlier and the second highest for the month on record. A poll of City economists had forecast public sector net borrowing – the difference between public spending and income – would be £17.1bn. The figures will add to concerns that the government is struggling to bring down the annual deficit to keep within strict spending rules. While last October's budget allowed for more than £100bn of extra investment spending, the chancellor, Rachel Reeves, has said day-to-day Whitehall budgets must remain within strict limits. However, the measure of the monthly shortfall in day-to-day spending – the current budget deficit – remained below the forecast by the Office for Budget Responsibility (OBR), which provides independent forecasts of the public finances. The OBR said it expected the current deficit to be £13bn in May but it was £12.8bn, marking the second consecutive month when the deficit fell under the OBR prediction. Reeves has introduced extra taxes on businesses – including a rise in national insurance contributions – which were implemented in April. At the budget statement in March, the chancellor said she needed to cut the welfare bill to maintain a near-£10bn buffer in the current budget. Backbench Labour MPs are expected to rebel against cuts to benefits worth more than £5bn in the welfare bill introduced to parliament on Wednesday. Most major economic forecasters, including the International Monetary Fund and the Bank of England have downgraded the UK's growth prospects this year, potentially reducing tax receipts over the longer term and forcing the chancellor to make further spending cuts or raise taxes to bridge the gap. In March, the OBR said it expected borrowing to fall from £152bn in 2024-25 to £117.7bn in the 2025-26 financial year. Alex Kerr, a UK economist at Capital Economics, said the OBR was likely to follow other forecasters and downgrade UK growth when its next economic outlook is published alongside the autumn budget, forcing the chancellor to implement either further welfare cuts or tax rises. He said a recent U-turn on cuts to winter fuel allowance, downward revisions to the OBR's growth forecasts and higher borrowing costs 'may mean that to maintain her current £9.9bn buffer, Reeves has to raise £13bn-£23bn later this year'. Thomas Pugh, an economist at the accountancy company RSM UK, said figures for April and May were better than expected but the longer-term outlook was looking more difficult. 'Looking ahead to the budget in the autumn, the underperformance of the economy and higher borrowing costs mean the chancellor may already have lost the £9.9bn of fiscal headroom that she clawed back in March,' he said. 'Throw in the tough outlook for many government departments announced in the spending review and U-turns on welfare spending, and the chancellor will probably have to announce some top-up tax increases after the summer.' He added that tax increases would probably need to fill a deficit of £10bn-£20bn based on lower OBR forecasts for growth. 'We are pencilling in tax increases of £10bn-£20bn. The good news is that with interest rates likely to be about 4% at the time of the budget, there is plenty of scope for the Bank of England to cut rates to offset the impact of any fiscal consolidation on the economy.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Irish Times
10-06-2025
- Business
- Irish Times
Warnings about corporation tax fall on deaf ears as money keeps rolling in
The Irish public might well have become desensitised to warnings about corporate tax . We've had 10 years of warnings about the concentration risk at the heart of the business tax base – the dangers of having such a large chunk of State income hanging on the fortunes of just a few firms – but it's not obvious anyone is listening any more. And not when receipts keep rising and rising in the face of these warnings. Last year, they reached a record €28 billion (excluding the €11 billion that flowed in from the Apple tax case). And even now, with a tariff-loving, America-first Donald Trump in the White House promising a big clampdown on US multinationals that have offshored their manufacturing operations to the Republic and elsewhere, our corporate tax receipts are projected not to fall but to keep rising. READ MORE The Irish Fiscal Advisory Council (Ifac) says it is predicting another surge in receipts on the back of several favourable trends. First, it expects receipts to rise by about €5 billion from 2026 onwards as additional revenue from the new global minimum tax rate of 15 per cent flows into the exchequer. It also noted that most of the big taxpayers here are not affected by trade tensions and are forecast to report increased profits this year, resulting in higher tax payments this year and beyond. Many of these firms have also been availing of generous tax-cutting capital allowances which are due to run out, meaning they will be liable for more tax. And finally, the current surge in pharmaceutical exports, which jumped by 154 per cent in the first quarter as firms rushed to get merchandise into the US before tariffs, is likely to result in bigger tax payments this year. How to manage your pension in these volatile times Listen | 37:00 Ifac chairman Seamus Coffey said the State's corporate tax base was between €28 and €30 billion, but 'go four or five years you could have a forecast range of plus or minus €15 billion.' If the plus margin of error pertains, that points to a corporate tax base of €40 billion, eight times what it was a decade ago. All of which begs the question: are we making the best use of this seemingly evergreen windfall?
Bloomberg
15-05-2025
- Business
- Bloomberg
Deputy Treasury Chief Says August Is Earliest for X-Date Worries
Deputy Treasury Secretary Michael Faulkender said that federal tax receipts have been coming in higher than a year ago, helping bolster confidence that August is the earliest point for concerns about staying within the federal debt limit. 'We're pretty confident, based upon the receipts that came in from primary tax filing season that an August time frame is the earliest that we need to worry about the X-Date,' Faulkender said in a Bloomberg Television interview. The X-Date refers to the point at which the Treasury runs out of cash and special accounting measures to keep within the debt ceiling and still make good on federal obligations on time.
