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Public finances show deficit of €1.1bn at end of April

There was a deficit in the public finances of €1.1 billion at the end of April.

This compares to a deficit of €7.6 billion in April 2021.

According to the latest Exchequer figures from the Department of Finance, the improvement in the public finances means that on a rolling 12-month basis, the deficit has been reduced to €800 million.

Gross revenue is up 16% or €4.2 billion to €29.9 billion in the first four months of this year compared to the same period last year.

Tax revenue is up by €5 billion or 31% to €21.1 billion compared to the same period in 2021.

Total expenditure was down €2.4 billion to €31 billion.

Cumulative income tax receipts this year up to the end of April were €9.5 billion, up €1.5 billion or 19% ahead of the same period in 2021.

The Department says some of the increase is due to the postponement of some income tax due last year under Covid business support schemes.

Corporation tax receipts were €400 million ahead of April 2021 but cumulatively are just under three times the amount collected over the same period in 2021 at €2.3 billion.

Last month, the Department explained this was due, in part, to some large companies paying their corporation tax in March rather than later in the year, which is customary.

April is not a VAT due month and receipts last month were broadly in line with April 2021.

However, cumulatively VAT receipts are running €1.4 billion or 29% ahead of 2021 at €6 billion for the first four months of the year.

The Department says some of the wide disparity can be explained by a temporary reduction in VAT which was in place for part of 2021 and the imposition of Covid restrictions in the early part of last year which suppressed consumer spending.

Minister for Finance, Paschal Donohoe

Minister for Finance, Paschal Donohoe said today's figures show that the strong momentum in tax receipts has continued into the start of the second quarter.

"While the annual comparisons are distorted due to a number of factors, in particular the level five restrictions that were in place last year, the underlying trends are a positive sign of the strength of the economic recovery," he said in a statement.

"It is also important to stress that today’s figures are, of course, backward looking. We expect economic activity and the public finances to be significantly affected by the war in Ukraine.

"We have faced many challenges in recent years – Brexit, Covid-19, and now war in Europe. In each one of these, this Government has demonstrated our ability to be agile and responsive. We know that there are difficult times ahead but we also know that we face them from a strong position," Minister Donohoe said.

Michael McGrath, Minister for Public Expenditure and Reform

Meanwhile, Minister for Public Expenditure and Reform, Michael McGrath said the Government continues to support the economy and public services with expenditure of over €25 billion in the first four months of the year.

"This is marginally below profile by €111 million and €1.4 billion lower than the same period in 2021. This lower level of expenditure reflects the gradual unwinding of labour market and business supports as Ireland emerged from the Pandemic," he said.

"At the end of April, Social Protection continues to show expenditure ahead of profile by €0.3 billion, reflecting measures to support employees and businesses through the recent Omicron wave of infections.

"The Department of Health spending is €0.1 billion ahead of profile, largely due to the ongoing response to Covid-19 in the Sector," Minister McGrath said in a statement.

He said Government departments continue to respond to the Ukrainian refugee crisis.

"27,000 refugees have arrived in Ireland and they are being provided with social welfare, health, education and accommodation supports where needed.

"While costs are still being determined as number of arrivals increase, it is expected that these can be met from within the overall Government Expenditure Ceiling in 2022.

"The recently published Stability Programme Update provided for funding of €3 billion to address the crisis in 2023. These costs will be examined as part of the Summer Economic Statement and Mid-Year Expenditure Report," he said.

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