The exchequer deficit hit €11.7 billion at the end of October, including a €1.5 billion drawdown from the rainy day fund.
Weaker corporation tax returns, a fall in tax receipts and an increase in spending were responsible for the deficit according to Finance Minister Paschal Donohoe and Public Expenditure Michael McGrath.
Covid-19 supports for business resulted in additional Government spending in October, the Ministers said in a statement issued today.
Tax revenues in October were down 28 per cent, or €1.2 billion on the same month last year.
October tax receipts were heavily impacted as some €550 million has been held back by the Revenue Commissioners to help pay cash transfers to businesses under the Covid Restrictions Support Scheme, reducing the income tax and corporation tax heads by €275 million each.
Despite the cost, it is appropriate that Government steps in to help businesses during this time
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“Today’s exchequer returns highlight... the level of support given to businesses under the Government’s new Covid Restrictions Support Scheme,” Minister Donohoe said.
"Despite the cost, it is appropriate that Government steps in to help businesses during this time.
"A more medium-term issue is the unreliability and unsustainability of corporation tax receipts. As I have said many times before, we cannot rely on this revenue stream into the future.”
Minister McGrath said the “increased expenditure necessitated by Covid-19 is warranted in view of the exceptional circumstances we face."
He said the spending ensures “our schools remain open, that public services continue to be provided and that community and sporting organisations receive vital support."
