Minister for Finance Paschal Donohoe has warned about the dangers of relying on high levels of corporate tax following a “steep” drop in receipts in August.

The latest exchequer returns show receipts from the business tax fell by 43 per cent to €2.1 billion last month.

The Department of Finance blamed the drop on statistical base effects following an “exceptionally” strong August last year.

It also noted that on a cumulative basis, corporate tax receipts amounted to €18.2 billion so far this year, up €1.9 billion on the same period last year.

But Mr Donohoe said the figures “provided a reminder of the vulnerability in our corporation tax base”.

While the fall last month “had been anticipated after a very strong August last year, corporation tax is now only marginally ahead of 2024 (when once-off receipts from the recent Apple tax ruling are excluded),” he said.

The August exchequer returns incorporate Apple’s end-of-year tax payment as the iPhone maker’s financial year ends in September.

The company is the State’s largest tax payer. Apple’s main Irish arm paid €8.17 billion in corporation tax last year.

The latest exchequer figures indicate the Government collected €64.1 billion in tax revenue overall for the eight months to the end of August, €4.4 billion or 7.3 per cent up on the same period last year, leaving the public finances in relatively good shape going into next month’s budget.

On a cumulative basis, income tax receipts to the end of August were 23.2 billion, up 4.7 per cent on the same period last year while VAT receipts at €15.2 billion were ahead by 4.8 per cent.

“Other revenue streams, particularly income tax and VAT receipts, have been performing steadily and are broadly in line with expectations for this point in the year, reflecting the underlying strength of our economy,“ Mr Donohoe said.

He has previously signalled that the budget would be framed around a €9.4 billion spending and tax package.

The latest figures gave rise to an exchequer surplus of €3.2 billion.

On the spending side, the department said gross voted expenditure stood at €68.6 billion for the eight-month period which was €5 billion (7.8 per cent) ahead of the same period last year.

Planned expenditure for this year is now expected to amount to €108.7 billion, €3.3 billion more than set out in Budget 2025.

In a post on X, the Irish Fiscal Advisory Council (IFAC) said current spending is up 6.1 per cent so far this year.

“Spending is rising quickly in education, children and justice, with those combined areas seeing spending up 7.5 per cent. Budget 2025 only set out growth of 2.5 per centfor these areas,” it said.

 Peter Vale, tax partner at Grant Thornton Ireland, noted that after exceptionally strong corporation tax receipts in July, “there was a big fall in the August numbers compared to the previous year”.

“The figures again underline our dependence on such a small number of companies for such a large portion of our receipts,” he said.

“While year to date corporation tax receipts are marginally ahead of 2024, the unpredictable nature of the monthly figures may make it challenging for the Government to plan ahead of Budget 2026,” Mr Vale said.

“Unfortunately, corporation tax figures for the critical months of October and November will come too late for Budget deliberations,” he said.