The Government reported a target-beating €12.8 billion exchequer surplus last year on the back of a record tax haul, providing Fianna Fáil and Fine Gael with greater scope to commit to big-ticket investments in areas such as housing as they resumed coalition talks on Monday.
The year-end exchequer returns, published by the Department of Finance, showed total tax receipts soared almost 23 per cent to a record €108 billion last year.
The increase was driven by the transfer of almost €11 billion from Apple, after the Court of Justice of the European Union (CJEU) ruled in September that the iPhone maker owed the State billions in back taxes and interest. All told, about €14 billion of Apple money is expected to transfer, but the Government had previously only calculated accounting for €8 billion of this in 2024.
[ State tax take hits record €108bn after €11bn Apple boostOpens in new window ]
Other corporation tax receipts surged 18 per cent to €28.1 billion, while income tax rose by 6.6 per cent to €35.1 billion and VAT increased 7.3 per cent to €21.8 billion.
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The surplus was higher than the €11.6 billion forecast at the time of Budget 2025 and compared to a figure of €1.2 billion posted in 2023.
“Looking ahead, there are clearly identifiable risks on the horizon. Navigating through these will require a greater focus on competitiveness and on getting the basics right — especially in areas like energy, water, transport and housing,” said Minister for Finance Jack Chambers. “This is why Government is committed to using the proceeds of the CJEU ruling to expand infrastructure in these critical areas.”
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Mr Chambers and Fianna Fáil colleagues resumed negotiations on a new programme for government with Fine Gael after a break for Christmas. Both sides reported good progress, but sources acknowledged difficult areas of division between them had not yet been broached.
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The talks between the two parties are expected to step up a gear this week, while a parallel series of meetings between the big parties and various independent TDs will also take place in the coming days.
The regional Independent group, convened by Tipperary TD Michael Lowry, said last night it would “negotiate and act as a cohesive group” though doubts persist in Fine Gael and Fianna Fáil about how the group will balance its collective positions and the demands of individual TDs for projects in their constituencies.
Fianna Fáil and Fine Gael will also meet Kerry Independents Michael and Danny Healy-Rae shortly and the Independent Ireland party. Both groups have signalled their willingness to consider supporting a new government.
The strong income tax and VAT figures are seen by economists as signs of strength in the domestic economy. The number of people employed in the Republic rose by 100,000 to a record 2.79 million in the 12 months to September, according to Central Statistics Office figures.
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“The Irish economy has consistently proved its resilience despite nearly a decade of economic and geopolitical turbulence,” said Tom Woods, head of tax at KPMG Ireland. “But it is critical that we use a portion of the tax surpluses to urgently tackle infrastructural challenges to secure current and future waves of business investment and position us for future economic and societal prosperity.”
He added: “Those involved in government formation talks now have a seminal opportunity, given exchequer resources, to devise a programme for government to address these issues.”
Peter Vale, a tax partner with accounting firm Grant Thornton, said the scale of the surplus will give the incoming government leeway to invest in critical infrastructure, even as it will be concerned about the impact of the incoming US administration under Donald Trump on trade and inward investment into the Republic.
“With the potential for significant US tax reform under [president-elect] Trump, it is increasingly difficult to predict the trajectory of corporation tax receipts here,” said Mr Vale. “While there is hope that the scale of any US tax reform will fall short of election promises, a gradual decline in our corporation tax receipts remains a possibility.”
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