Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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108. To ask the Minister for Finance if he will detail where tax revenues stood by the end of October 2022 or the most recent available month in 2022; the way in which it differs from 2021; and if he will make a statement on the matter. [55590/22]

Neale Richmond (Dublin Rathdown, Fine Gael)
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139. To ask the Minister for Finance if he will report on tax receipts and revenues to end-October 2022; and if he will make a statement on the matter. [55874/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 108 and 139 together.

Tax revenues to end-October stood at €63.9 billion, €13 billion or over 25 per cent ahead of the same period last year. With the notable exception of excise duty receipts, which are negatively impacted by Government policy to address the cost of living challenge, virtually all revenue streams are up on last year. Income tax receipts were up by €3.2 billion, or nearly 16 per cent, and VAT was up by €2.9 billion, or 23 per cent. While the year-on-year comparison is exaggerated due to the public health restrictions that were in place last year, this is nonetheless a clear sign of the strength of our economic recovery.

However, as the Deputy will be aware, the headline fiscal position is boosted by the continuing surge in corporation tax. These receipts now stand at €16.2 billion, up by €6.6 billion on last year. While this is, in many respects, welcome, we know that these receipts are highly volatile and should not be relied upon to fund permanent expenditure. Indeed, I do not expect much of the windfall corporate tax received in recent months to be replicated next year.

As part of Budget 2023, the Government published a new metric, the GGB* or underlying general government balance, which presents the fiscal position if estimates of windfall corporation tax were excluded. My Department estimates that as much as €9 billion in corporation tax receipts this year could be classified as ‘excess’: in other words, they are not linked to developments in the domestic economy. Excluding these volatile receipts would mean that, instead of a modest budgetary surplus this year, we would be facing a very significant deficit.

To mitigate this risk, I announced on Budget Day that we will commit part of this excess - €2 billion this year and €4 billion next year – to the National Reserve Fund. This will allow us to take advantage of these receipts while they last to rebuild our fiscal buffers and ensure we are prepared to meet future economic challenges, while not repeating the mistakes of the past by allowing volatile tax revenues to become part of the permanent expenditure base.

Finally, I would caution that while current trends in tax revenue are undoubtedly positive, the overall Exchequer figures do not yet fully reflect the impact of the Budget 2023 cost of living tax and expenditure measures as well as the planned transfer of €2 billion to the National Reserve Fund, which will lead to a lower Exchequer surplus by the end of the year.