The strong economy resulted in a 3.4% increase in taxes collected in the first three months of this year compared to the same period in 2025, official figures show.
Department of Finance data reveal that income tax revenues rose by 6.1%, with workers paying €8.7 billion, a sign that the jobs market remains robust. Value-added tax (VAT), which includes fuel taxes, also saw growth, increasing 5.3% to €8 billion.
Corporation tax collections, however, were down slightly, falling 3.1% to €2.9 billion. Excise duties, which were reduced last month on petrol and diesel, dropped by 1.2% to €1.5 billion. Overall, total tax receipts for the first quarter amounted to €22.6 billion. When one-off payments from Apple in 2025 are excluded, the figure collected this year represents an increase of €700 million over the same period last year.
Despite the tax gains, the exchequer recorded a deficit of €1.2 billion in the first quarter. Officials attributed the shortfall largely to transfers to the State’s two long-term savings funds: the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.
Government spending reached €26.4 billion in the first three months of the year, up 6.4% compared with the same period in 2025, though it remained 1.6% below the Department of Finance’s forecast. The Irish Fiscal Advisory Council has consistently criticised the pace of spending growth in Ireland, arguing that it is much faster than in other European Union countries.
The rise in income tax receipts reflects strong employment levels across Ireland, indicating that the labour market continues to recover from previous years of economic disruption. VAT growth also points to steady consumer demand, despite global pressures on fuel and energy prices.
The slight decline in corporation tax highlights the volatility of revenues from multinational companies, which remain an important but unpredictable source of public funds. Excise cuts on petrol and diesel were designed to ease cost-of-living pressures on households, though they contributed to a minor reduction in overall excise collections.
Overall, the first-quarter figures suggest that Ireland’s economy is on a stable footing, with robust employment driving tax growth and providing the government with resources to fund long-term priorities. Transfers to strategic savings funds reflect efforts to balance current spending with investments in future infrastructure, climate initiatives, and national development.
Officials say maintaining this balance will be essential as Ireland navigates inflationary pressures and rising costs while sustaining economic growth and job creation.
