The public finances recorded a surplus in January of €2.8 billion, according to figures published this afternoon by the Department of Finance.

This compares to a surplus of €2.2 billion in January 2022.

On a twelve-month rolling basis, this means the Exchequer is running a surplus of €5.6 billion.

Tax revenue overall is €800 million or 12% higher at €7.5 billion.

VAT receipts, which reflect some spending patterns in the run-up to Christmas as well as post-Christmas sales, were up €600 million or 18.5% on January 2022.

This includes a €200 million amount that was collected in December but held back 'to fund potential repayments' which didn’t arise. If this were excluded, VAT receipts would have been 12% higher than last year.

Income tax came in €200 million or 9.3% ahead at €2.8 billion compared to the same month last year.

January is not a significant month for corporation tax. €50 million was collected in corporation tax last month, down €31 million or 39% on January last year.

June and November are normally the main months when the largest amounts of corporation tax are collected.

The Minister for Finance, Michael McGrath said today's figures show that the strong momentum in tax receipts has continued into the start of this year.

"The strength in income tax, in particular, is a positive signal of the continued resilience in the labour market with close to a record-low unemployment rate of just 4.4% recorded in January," he said.

"Indeed, the latest incoming data, including today’s figures along with the pickup in core retail sales and consumer sentiment suggest that the downturn in the domestic economy may not be as severe as previously anticipated," he added.

The Minister for Public Expenditure, National Development Plan Delivery, & Reform, Paschal Donohoe said over €6 billion was spent on public services across Government in January.

"This year-on-year increase of 6.5% in day-to-day expenditure reflects the Government's Budget 2023 strategy.

"This year nearly €78 billion will be spent on public services across Government. This will provide for investment in the future of our public services. There will be more teachers and Gardaí, more hospital beds and healthcare staff, and increased rates of payment for social welfare recipients," he added.

Tom Woods, head of tax at KPMG, said the receipts reflect VAT collected over Christmas 2022.

"Inflation is the main driver in the increase in VAT receipts as shoppers spent more and bought less," he said.

"While the overall rate of inflation is slowing, vulnerable households and businesses continue to feel the impact of the cost-of-living crisis."

"The Government may, therefore, need to pause the plan to reverse some of the cost-of-living support measures."