Department of Finance anticipates increased tax take in 2018

New figures published by the Irish Department of Finance indicate that the government will receive a 7% increase in tax revenues this year. Ireland is forecast to collect €54.17bn in 2018, with the biggest increases expected to come from VAT and income tax.

Income tax receipts remain the largest revenue stream for the state, amounting to almost two-fifths of tax income. The data, released this month, predicts that €21.45bn will be generated in income tax alone this year. The department is also anticipating a 6% rise in VAT receipts, rising to a total of €14bn, with corporation tax also generating an additional €8.5bn – a year-on-year increase of 4%.

The only tax that’s set to experience a decline in 2018 is excise duties. According to the department, excise duty receipts will generate €5.8bn this year, representing a 2% year-on-year drop in income for the state. The decline has been attributed to the front-loading of excise duty on tobacco, following the implementation of ‘plain packaging’ last September.

The department also noted the change in the way property and motor taxes will be directed from 2018. Property tax, which is worth a projected €470m this year, will be paid directly to the local government fund (LGF) as opposed to the exchequer. Motor tax, which used to be paid directly to the LGF, will now be paid straight to the exchequer, worth up to €985m in 2018.

Nevertheless, the department confirmed that the changing classification of these taxes would have no bearing on the government’s general balance.

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Last updated: 15th February 2018