- Today’s Exchequer figures show that tax revenues to end-March were up €130 million, or 1 per cent, on the same period last year;
- VAT receipts to end-March were up by €350 million, or 8.4 per cent reflecting the severity of the spring 2020 lockdown;
- Income tax receipts remain resilient, up by 4 per cent, on Q1 2020;
- Total gross voted expenditure to end-March 2021 amounted to €19.5 billion; €2.5 billion, or over 14 per cent, ahead on the same period in 2020;
- Gross spending by the Department of Employment Affairs and Social Protection up €2.7 billion year-on-year;
- The 12-month rolling Exchequer deficit stands at just under €14 billion.
An Exchequer deficit of €4,172 million was recorded to end-March. This compares to a deficit of €2,535 million in the same period last year. The €1,637 million deterioration in the Exchequer balance is driven by an increase in current expenditure. On a 12-month rolling basis — a better indicator of the trend — the Exchequer recorded a deficit of €13,953 million.
March is a VAT-due month and receipts were up 69.2 per cent to €1,827 on the same month last year. The significant year-on-year increase reflects forbearance and accelerated repayments made by Revenue last year to assist business at the outset of the pandemic. Year-on-year comparisons now compare receipts to returns during the early part of the pandemic. Income tax continued to show resilience, with receipts of €1,835 million in March, up 10.2 per cent on the same month last year.
On a quarterly basis VAT receipts of €4,484 million were €347 million, or 8.4 per cent higher than in the same period in 2020. Corporation tax receipts of €583 million to end-March were down by €287million on the 2020 performance. This is largely due to deductions of €227 million to fund payments under the Covid Restrictions Support Scheme (CRSS). CRSS payments are also made from the income tax receipts, but to a lesser extent. Deductions of €42 million have been made in 2021 to-date. Income tax receipts of €5,869 in the first quarter are up €226 million, or 4 per cent, on the first quarter in 2020.
Total net voted expenditure to end-March was €15,489 million, €1,899 million, or 14 per cent, ahead on the same period last year. Spending by the Department of Employment Affairs and Social Protection was up €2,694 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 significant level of support that continues to be provided by Government. More than €2.5 billion additional funding has been spent by the Department of Employment Affairs and Social Protection alone over the last three months compared to last year. Together with the range of other supports available to people and businesses, including the Covid Restrictions Support Scheme, the impact on the public finances has been severe’.
“However, while the cost to the Exchequer has been substantial, there are grounds for optimism. As the tax figures show, businesses and consumers have adapted. The economic impact of the current set of restrictions is not as severe as last year, as companies innovate and consumers respond. This shows the fundamental strengths of our economy and business sector and bodes well for our recovery over the coming months”
The Minister for Public Expenditure and Reform, Michael McGrath T.D. said: ‘Since the onset of the pandemic, we have now spent €12 billion in direct income supports through the PUP and wage subsidy schemes. In addition, we have helped businesses through a range of initiatives including grants, a commercial rates waiver and liquidity measures and undertaken considerable Covid related spending in the Health, Education, Transport and Cultural sectors. The amount allocated for Covid-related supports across 2020 and 2021 is in excess of €28 billion. This extraordinary level of fiscal support has been and remains necessary to help our country and our people to get through this awful pandemic’.
“The sheer scale of this expenditure underlines the Government’s determination to support incomes, put in place the necessary health expenditure to treat patients and roll out the vaccine programme, and give businesses the best opportunity to benefit from the recovery that we all eagerly await. Ultimately, the acceleration in vaccine administration will allow all of those sectors of the economy which are currently closed or severely curtailed to contribute to narrowing the deficit.”
https://www.gov.ie/en/publication/475b1-fiscal-monitor-march-2021/
ENDS
Contact:
Deborah Sweeney, Special Advisor, Department of Finance — 086 858 6878
Aidan Murphy, Press Officer, Department of Finance – 085 886 6667 Press Office, Department of Finance pressoffice@finance.gov.ie
Press Office, Department of Public Expenditure and Reform pressoffice@per.gov.ie
Notes to editors:
- Tax revenue last year amounted to €57.2 billion.