Strong tax revenue is a rare constant in uncertain times

Tax revenues of €3.9 billion were collected in April, up by €0.9 billion, or 28% on April 2021, with the bulk of the increase driven by income tax receipts. Total tax receipts for the year to date now stand at €21.1 billion, which is €5 billion or 31% higher than the same period in 2021. Corporation tax receipts for the first four months of the year now stand at €2.3 billion.

Commenting on today’s Exchequer figures for April 2022, Tom Woods, Partner and Head of Tax & Legal at KPMG, said that the resilience of businesses in Ireland is reflected in the strong performance of tax revenue for April.  Tom Woods said “the consistently strong tax revenues delivered by Irish businesses is a constant against the backdrop of uncertainty stemming from rising inflation and the war in Ukraine.  Businesses are also dealing with continued uncertainty on the progress of global tax reform.”   

Temporary measures introduced to support businesses through the energy crisis

Tom Woods, Partner and Head of Tax & Legal at KPMG says “The hikes in energy costs experienced by households and businesses to date in 2022 are extraordinary and show no signs of abating.  The Government has taken action by temporarily reducing VAT on the supply of gas and electricity from 13.5% to 9% for six months from 1st May, which is estimated to cost €46 million.  Clearly this measure should be kept under review as the year progresses.”

EWSS has ended but other supports aid recovery

EWSS ended on 30 April but other supports continue to aid recovery of viable businesses from economic impact of COVID.

Commenting on COVID tax supports, Tom Woods, Head of Tax & Legal at KPMG said “While the sun has now set on the EWSS for most of the 51,900 businesses who availed of subsidies worth €7.8 billion, some important COVID supports continue to apply. The reduced VAT rate of 9% for the tourism and hospitality sector continues until 31 August. Qualifying businesses with unpaid taxes accumulated over the lockdowns can continue to warehouse these debts until 2023 and even then, a reduced 3% interest rate will apply on warehoused tax debt which is substantially less than the normal 8%/10% interest rate.  The continuation of these tax supports will hopefully give viable businesses the time they need to recover fully from the pandemic.” 

Get in touch

If you have any queries on the above, please contact Tom Woods, Head of Tax and Legal. We'd be delighted to hear from you.