The exchequer’s deficit reached €6.1bn in May, as pressure on the government’s finances continues with the Covid-19 pandemic.
However, the latest figures show tax revenues are up 1.3% on May last year, due to an unexpected increase in the amount of corporation tax collected.
New figures revealed that corporation tax receipts were €1.2bn higher than May last year, with the Government saying corporation tax receipts “are showing some resilience to the overall economic slowdown”.
A Government statement said that “Information from the Revenue Commissioners is that these payments are based on increased profitability and not one-off factors; a significant part of the May corporate tax take is due to economic activity last year.”
Income tax receipts “have also proven more resilient to the broader economic shock,” according to the Government. They fell by 7.8% year on year.
Spending is up 19% on what was planned, largely due to health and income supports like the €350 weekly Pandemic Unemployment Payment.
The Government said: “The rise in expenditure reflects increased departmental drawdown in response to the Covid-19 pandemic, particularly in relation to the Department of Health and the Department of Employment Affairs and Social Protection.”
Minister for Finance Paschal Donohoe said: “Today’s figures show that the expected steep decline in consumption taxes has been offset by a rise in corporation taxes and relatively resilient income taxes.
“In relation to corporation tax, as I have said many times before, receipts of this order will not last forever. Even if receipts prove resilient during the current crisis, they will decline in the near future.
“As such, excess returns should be used to reduce the extraordinary amount of borrowing the State is taking on to fight this crisis.”
Source: Business News