The State collected 4.5 per cent less tax than expected in the first three months of the year due to a sharp fall in corporation tax receipts.
However, Minister for Finance Michael McGrath said this reflected a timing issue that "will almost certainly be made up" later this year.
The State has collected record levels of tax in each of the last three years, and the Department of Finance has pencilled in another 5 per cent rise for this year, driven by stronger income, VAT and corporation payments.
While only 15 per cent of corporation tax was due to be collected in the first quarter, March is the first month of the year when significant returns are made. First-quarter company receipts were 25 per cent lower year-on-year and 32 per cent or €1.1 billion below expectations.
"It is our understanding based on our engagement with the revenue commissioners that the shortfall in March will almost certainly be made up for later in the year," Mr McGrath said.
The highly concentrated corporation tax revenues, mostly paid by a small number of major multinational companies, have surged in recent years, and more than doubled between 2020 and 2022 to make up 27 per cent of the entire tax take.
These tax receipts proved particularly volatile last year, falling sharply in some months and rising by an even greater margin in others to finish with another record haul.
The latest figures showed that income tax receipts were 2.8 per cent ahead of forecast at the end of March, with VAT 1.3 per cent below expectations. Income tax, VAT and corporation tax are due to make almost nine of every €10 in tax collected this year.
An exchequer deficit of €0.3 billion was recorded in the first quarter, with spending, excluding capital projects which are generally back loaded towards the end of the year, coming in 1.3 per cent ahead of expectations.
That compared to a €1.9 billion surplus a year ago on a like-by-like basis.
The Government said last year that it expected to deliver a budget surplus of €8.3 billion or 2.7 per cent of gross national income in 2024, which it intends to invest in a new sovereign wealth fund.
-Reuters
