Tax revenue for year to date exceeds target
TAX REVENUE in the January-August period stood at just under €22.1 billion – €365 million (1.7 per cent) ahead of plans, according to figures published by the Department of Finance yesterday afternoon.
The better-than-expected performance came despite a second consecutive month in which revenue undershot targets. In August, exchequer revenue stood at €1,761 million, 7 per cent below the month’s target.
Since peaking in the early months of the year, growth in tax revenue has trended downwards. In the June-August period, tax revenue was below the same period last year. This is the first time since 2010 that a year-on-year decline in revenue has been registered for a three-month period.
Although the negative trend has been exaggerated by timing issues surrounding corporation tax and pension-levy payments, even allowing for these factors there is some cause for concern that full-year targets may not be met.
On the spending side, the department said the underlying voted expenditure position in the first eight months of the year was just over €200 million (1.1 per cent) above limits set in the budget. Total voted spending stood at €29.6 billion in the January-August period.
Of the 16 departmental budgets, 12 were within their budget limits for the year up to August.
“Overruns in the social protection and health vote groups, which have been evident for much of the year, remain,” the department said.
In health, the underlying overrun in the first eight months of the year exceeded €250 million, while the social protection overrun reached €379 million.
As has been the case over the year to date, spending overruns in the two high-spending departments have been partly offset by much lower than anticipated capital spending which, thus far in the year, is one-fifth below budget.
Exchequer debt-servicing costs, at just under €4.8 billion, were €188 million (3.8 per cent) less than predicated by the department in early February. However, in year-on-year terms exchequer debt-servicing costs are up some €2.2 billion, with exceptional items explaining half this increase.
The exchequer deficit at the end of August was €11.3 billion. This is well down on the same period last year, largely because of the very large bank recapitalisation costs incurred in mid-2011.
The department does not publish a predicted deficit figure for each month, making assessment of the overall budgetary position more difficult.