Tax Revenues Spike 7.3%—Is This The Warning Sign Every Entrepreneur Needs to See Right Now?

Isn’t it fascinating how numbers can tell a story of resilience and challenge all at once? This year, the State has pulled in a whopping 7.3% more in tax revenue compared to 2024, setting the stage for a robust October Budget. But here’s the kicker—when you peel back the layers and exclude those one-off Apple back tax payments, the real growth settles at a still solid 4.4%. Income tax and VAT are holding their ground nicely, up by about 4.7% and 4.8% respectively, showing a labor market that refuses to buckle. Yet, corporation tax took a nosedive last August, tumbling 42.8%, a dip the Department of Finance chalks up to last year’s unusually strong figures. Meanwhile, government spending is ramping up too, climbing 7.8%—a stat the Irish Fiscal Advisory Council keeps a wary eye on, flagging it as a potential threat to long-term fiscal health. Think of it as juggling flaming torches: impressive to watch, but a slip could hurt. So, how will these twists and turns shape the government’s financial future and the lives of everyday citizens? Dive deeper to unpack this fiscal balancing act. LEARN MORE.

The State has collected 7.3% more in tax so far this year compared to 2024, placing the Government in a favourable position ahead of October’s Budget.

Excluding one-off payments of back taxes from Apple, the overall increase in revenue stands at 4.4%, according to the latest Exchequer Returns for August.

Income tax receipts are up 4.7% year-to-date, reflecting a resilient labour market, while VAT has grown by 4.8%.

However, corporation tax showed a sharp fall in August, dropping by 42.8% compared with the same month last year.

The Department of Finance stressed that this decline comes against the backdrop of an exceptionally strong August in 2024.

On a year-to-date basis, corporation tax is still 1.1% higher once Apple-related payments are excluded.

Alongside rising revenues, Government expenditure has also increased.

Figures show spending is up 7.8% so far this year.

The Irish Fiscal Advisory Council has repeatedly flagged the pace of rising expenditure as a risk to the long-term sustainability of the public finances.

Commenting on today’s release, Minister for Public Expenditure, Public Service Reform and Digitalisation, Jack Chambers, said: “The figures released today show that expenditure is ahead of the plans set out by Departments, but overall, this remains a variance of less than 1%.”

He added: “Expenditure to this point in the year has supported continued investment in our public services and infrastructure and is delivering on key government priorities including increased weekly Social Welfare payments and investment in our health services.”

The Exchequer recorded a surplus of €3.2bn to the end of August, compared with €3.8bn during the same period last year.

Once the Apple payments are stripped out, however, the underlying position shows a deficit of €100m.

That marks a deterioration of €3.9bn compared with 2024.

This shift has been partly attributed to the Government’s move to transfer €3bn into two long-term savings funds, designed to help future-proof the public finances against demographic and economic pressures