Dublin: Ireland recorded a budget deficit of €1.8 billion in February, driven by increased government spending and weaker tax receipts, according to new figures from the Department of Finance.
Officials said large transfers to state investment funds and a drop in corporate tax revenue contributed to the shortfall. Government spending has increased significantly since 2024, a year when the State received €14 billion from the long-running European Commission v Apple State Aid Case. Government data shows that the entire amount was allocated to long-term investment funds.
Rising costs associated with public services and support for refugees have also added pressure to the state’s finances.
Government Spending Continues to Rise
Department figures indicate that total government spending in February exceeded €20 billion. Voted expenditure reached €17.5 billion, representing a 5% increase compared with the same period last year.
Non-voted expenditure stood at €2.8 billion, rising by €1.7 billion compared with 2025. Officials attributed this increase largely to transfers to the Future Ireland Fund and the Infrastructure Climate and Nature Fund.
Tax Revenue Declines
Total tax revenue collected in February was €5.2 billion, slightly below the level recorded in the same month last year. Overall tax receipts for the year to date stand at €13.6 billion, representing a decline of more than 10% compared with the same period in 2025.
However, the Department noted that last year’s figures were boosted by one-off receipts linked to the Apple tax ruling. Excluding those exceptional payments, tax revenue has increased only marginally — by about 1%.
Total Exchequer revenue at the end of February stood at €18.6 billion, down more than 11% year-on-year.
Direct Taxes
Income tax receipts reached €2.9 billion in February, an increase of 10% compared with the same month last year. Cumulative income tax revenue for the year has reached €6 billion, up 5% compared with early 2025.
Corporate tax revenue in February amounted to €800 million, around 20% lower than the figure recorded a year earlier. On a cumulative basis, corporate tax receipts are down by about 22%.
Indirect Taxes
Value Added Tax (VAT) receipts for February were €500 million, an increase of 8% compared with February 2025. However, cumulative VAT receipts of €4.7 billion remain about 4% lower than last year.
Excise duties generated €500 million in February, a modest increase of €13 million year-on-year. Total excise revenue so far this year stands at €1 billion, slightly below the previous year’s level.
Capital and Other Taxes
Stamp duty revenue reached €308 million, broadly unchanged from last year. Capital gains tax receipts amounted to €270 million, representing a decline of more than 21% year-on-year, while capital acquisitions tax generated €45 million, down €8 million compared with the same period last year.
Other revenue included €164 million in motor tax and €93 million in customs duties, with customs receipts showing a modest increase.
Meanwhile, the government has stepped up enforcement on tax arrears, with a growing number of notices being issued—including for relatively small outstanding amounts—as part of efforts to improve compliance and strengthen revenue collection.
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