- Today’s Exchequer figures show that tax revenues to end-February were down €830 million, or nearly 9 per cent, on the same period last year;
- VAT receipts to end-February were down by €400 million, or 13 per cent;
- Similarly, excise duties were down by €130 million, or 15 per cent;
- Income tax receipts remain resilient, slightly ahead, by over 1 per cent, of the same period in 2020;
- Total net voted expenditure to end-February was just under €9 billion, €890 million, or 11 per cent ahead on the same period last year;
- Spending by the Department of Employment Affairs and Social Protection was up €1.8 billion year-on-year;
- The 12-month rolling Exchequer deficit stands at just over €14 billion.
An Exchequer deficit of €721 million was recorded to end-February 2021. This compares to a surplus of €1,001 million in the same period last year. The €1,722 million year-on-year deterioration in the Exchequer balance is driven by both a decline in tax receipts and an increase in public expenditure.
February is a non-VAT-due month, but on a cumulative basis VAT receipts of €2,657 million were €400 million, or 13.1 per cent lower than in the same period in 2020. Similarly, excise duties have now fallen by €131 million or 14.8 per cent on the same period last year. February is not generally a significant month for corporation tax and receipts of €350 million to end-February were down by €232 million on the 2020 performance. This is due to a once off payment received in February 2020 and a deduction of €69 million to fund payments under the Covid Restrictions Support Scheme (CRSS). Income tax receipts continued to show a remarkable resilience, with cumulative receipts of €4,034 million marginally ahead of 2020, by €56 million or 1.4 per cent.
Total net voted expenditure to end-February was €8,983 million, €889 million, or 11.0 per cent ahead on the same period last year. Spending by the Department of Employment Affairs and Social Protection was up €1,805 million year on year, mainly due to the cost of the Pandemic Unemployment Payment (PUP) and Employee Wage Subsidy Scheme (EWSS).
Commenting on the figures, the Minister for Finance, Paschal Donohoe T.D. said: ‘Today’s figures show the continuing impact of the pandemic on our public finances. Compared to the same two-month period last year, there has been a negative swing of €1.7 billion in the Exchequer position, demonstrating both the effect of public health restrictions on tax receipts and the unprecedented scale of government support to households and businesses’.
“While the cost to the Exchequer has been substantial, there are grounds for optimism. Reflecting the efforts of our citizens, case numbers have declined over recent weeks. Our vaccination programme continues to gain pace and the ongoing stability in income tax receipts is an indicator of the underlying strength in our economy and a hopeful sign for securing our economic recovery when the virus is brought under control”.
The Minister for Public Expenditure and Reform, Michael McGrath T.D. said: ‘When the Budget was framed the country was at a much lower level of restrictions and the move to level 5 in October has necessitated considerable additional welfare spending. This expenditure was running at €425 million ahead of expectations by the end of February and the Government has recently extended the PUP and EWSS schemes to the end of June as a demonstration of our unwavering commitment to supporting livelihoods while the necessary public health measures remain in place’.
“I am confident that the economy can bounce back strongly later in the year and this will deliver and improvement in the public finances. The focus for now must be on driving down case numbers, accelerating the vaccine roll out and ensuring individuals and businesses have the supports they need to see us through this traumatic phase in the life of our country.”
Fiscal Monitor February 2021
Deborah Sweeney, Special Advisor, Department of Finance — 086 858 6878
Aidan Murphy, Press Officer, Department of Finance – 085 886 6667
Claire Godkin Press Officer, Department of Public Expenditure and Reform – 085 806 3969
Notes to editors:
- Tax revenue last year amounted to €57.2 billion.