Pandemic deficit erased; Exchequer recorded surplus of €5 billion

DUBLIN: The economic recession and the challenges of Covid pandemic have not stopped Ireland’s economic growth. The Department of Finance confirmed that despite all the crisis, the government managed to generate a five-billion-euro surplus in the exchequer at the end of July.

The government’s achievement in a year is significant when you realize that it had a €5.7 billion deficit at the end of July last year.

This makes Ireland the third richest country in the world in terms of per capita income.

The Finance Department explains that the government’s financial position has improved due to higher tax returns and lower levels of Covid-related expenditure. Strong growth in corporation tax, income tax and VAT contributed to the strong revenue record.

For the seven months of the year until the end of July, income taxes were up €2.4 billion. This is a 17% increase over the same period last year. VAT receipts were €11.9 billion, a €2.2 billion (23%) increase over the same period in 2021. VAT receipts were 13% higher in July 2022 than in July last year. Corporation tax is up 51% at €9 billion.

Multinational companies in the pharmaceuticals and computer services sectors have caused an increase in corporation tax. Lower expenditure compared to the same period in 2021 also benefited the exchequer.

Tax revenues also increased by €6.6 billion in July, an increase of 15% compared to July 2021. Tax revenues were €43.5 billion as of the end of July, an increase of €8.3 billion, or 23.5%, over the same period last year.