Corporate tax receipts fell by 30 per cent in May, amounting to a loss of over €1.1 billion when compared to the same month last year, amid signs US tariffs may be denting the profitability of multinationals in Ireland.
The latest exchequer returns for May, published by the Department of Finance, indicated that the Government collected just under €2.5 billion in corporate taxes last month, compared to almost €3.6 billion in May last year.
The department insisted, however, that “once-off factors” had boosted receipts in May last year which distorted the year-on-year comparison.
Nonetheless with most EU exports currently facing a 10 per cent levy in the US, possibly rising to 50 per cent if negotiations between Brussels and Washington fail, exporting companies here may be predicting lower earnings
On a cumulative basis, receipts from the business tax were up by €1.1 billion at €7.4 billion but this reflects once-off revenues from the EU court ruling against Apple.
When they are removed, corporate tax receipts to the end of May were down 9.4 per cent at €5.7 billion.
Minister for Finance Paschal Donohoe said: “May is one of the more important months for tax revenues, and the steady growth in most tax headings points to an economy that is in a relatively good position.”
“The most notable feature of the May exchequer returns was in respect of corporation tax, which saw a marked year-on-year drop,” he said.
“While this reflects once-off factors last year, it nonetheless highlights the degree of concentration in the corporate tax base, wherein a small number of multinational firms can significantly impact on the overall tax yield,” Mr Donohoe said.
“In a context of unprecedented uncertainty in the international economic landscape, this serves as a timely reminder of Ireland’s exposure to changes in the global trading environment, and of the vital importance of adhering to a sensible and sustainable budgetary strategy,” he said.
Overall the latest exchequer data show the Government collected €38.2 billion in tax revenue during the first five months of the year.
This was up nearly €3 billion or 8.5 per cent on the same period last year aided by positive increases in income tax and VAT.
Income tax receipts, the Government’s largest tax channel, generated €14.5 billion, €630 million more than last year, reflecting the State’s strong labour market.
Separate figures, published on Thursday, put the headline rate of unemployment near a historic low of 4 per cent.
VAT receipts for the year so far were also up by €600 million at €11.4 billion. The sales tax reflects consumer activity.
On the spending side, total gross voted expenditure for the five-month period amounted to just under €42 billion, up by €3.1 billion (8.1 per cent) on last year and €37 million (0.1 per cent) behind profile.
At a headline level, an exchequer surplus of €4 billion was recorded compared to a surplus of €0.8 billion last year, an improvement of €3.2 billion.
Excluding the once-off receipts arising from the Apple tax case, the underlying surplus was €0.7 billion.
