The tax receipt of state increased dramatically and the government received €68.4 billion from tax payments in 2021. This shows 20% increase from 2020.
An Exchequer deficit of €7.4 billion was recorded to end-December 2021. This compares with a deficit of €12.3 billion in 2020. The almost €5 billion year-on-year improvement in the Exchequer balance is largely driven by significant increases in tax revenue.
Cumulative tax receipts of €68.4 billion at the end of the year were up by €11.2 billion (almost 20 per cent) on 2020, with strong growth evident across almost all tax heads.
At €26.7 billion, income tax receipts have recovered to above pre-pandemic levels reflecting inter alia the ongoing recovery in the labour market, alongside the strength of wages in sectors less affected by the pandemic. Reflecting the rebound in consumer spending, VAT receipts were €15.4 billion, up 24 per cent on the same period in 2020 (though year-on-year comparisons are affected by significant levels of tax warehousing in 2020).
Corporation tax receipts remained very strong last year at €15.3 billion, up almost 30 per cent on 2020, largely due to significant export sales and profitability in the life sciences/pharma and ICT sectors. As a result, corporation tax receipts are now at similar levels to VAT and account for over 22 per cent of total tax revenue.
Total net voted expenditure was €71.6 billion in 2021. This was €3.7 billion (5.5 per cent) higher than in 2020. The rise in expenditure reflects the continued provision of Covid supports for the economy and public services throughout 2021.