Exchequer returns show tax revenues up €2.6bn in 2012
The Exchequer deficit – a measure of the difference between central Government spending and revenue - was smaller in 2012 compared to 2011, end of year figures released by the Department of Finance have shown. The figures were better than expected on budget day just one month ago.
Although all Government spending and revenue figures are not yet available, Minister of Finance Michael Noonan said today that the widest deficit measure - and the one watched most closely by financial markets and the EU-IMF bailout troika - will come in below 8 per cent of gross domestic product for 2012.
On budget day less than a month ago this measure – known as the General Government deficit - was expected to stand at 8.2 per cent of GDP in 2012. A year ago the target was 8.6 per cent.
Today’s figures will add momentum to the Government’s efforts to exit the bailout and are likely further to boost international investor sentiment towards Ireland.
Among the most positive out turns from today’s figures was a very strong surge in tax revenues in December compared to the same month a year earlier.
An increase in receipts of almost 30 per cent was the second highest year on year increase for a single month since the recession began. Much of the increase was accounted for by unexpectedly large payments of corporation tax by two (unnamed) foreign multinationals.
For the full year, tax receipts were up by €2.6 billion on 2011, a 7.7 per cent year-on-year increase. When adjustments are made for one-off factors, the increase is somewhat smaller, a 5.3 per cent. Total tax receipts for 2012 stood at €36.65bn.
Exchequer expenditure in 2012 was in line with target, with overspends in health and social protection offset by underspending in other areas.
The non-voted capital expenditure was down by €8.3bn as “a result of the settlement of the IBRC promissory note with Government bonds and the fact that July 2011 banking recapitalisation payments were not repeated last year” according to officials.