Irish tax take down 6.9% at end-November, corporates bounce back
DUBLIN (Reuters) - Ireland's tax take fell 6.9% in the first 11 months of 2020 but a worrying slide in corporation tax in October was not repeated in November, the most important tax month of the year when around 15% of revenue is collected.
Ireland's Finance Ministry had forecast in April that state revenues would fall 16% this year due to pandemic disruption. But a strong pre-crisis start to the year, better than expected income tax take since and a surge in corporate tax receipts meant revenues were little changed in the first six months.
Corporate tax, mainly sourced from Ireland's large foreign multinational sector, soared in recent years and for the first nine months of 2020, but a big dip in October prompted a warning from the finance minister over its sustainability.
The state collected 3.1 billion euros (2.8 billion pounds) in corporate tax in November, ahead of the 2.9 billion euros expected. However, the November returns included 170 million euros in unused funds from a state scheme compensating firms hardest hit by COVID-19 curbs.
A further 260 euros of unused COVID funds were also included in the November income tax take of 2.5 billion euros. That was 4% lower than expected and down 29% year-on-year but the deferral of the deadline for some returns to December meant meaningful like-for-like comparisons are limited, the department said.
VAT, the other large tax category in November, came in 21% lower than expected at 2.1 billion euros, even though most of last month's tough COVID-19 constraints on shops and hospitality will only be accounted for in the January VAT returns.
Ireland will reopen those parts of the economy this week and a range of other data has shown the economy suffered far less damage over the last six weeks than in the first wider lockdown.
(Reporting by Padraic Halpin; Editing by Toby Chopra)
