Exchequer tax take remains below target in November

Tax receipts for the first 11 months of the year were 1.6 per cent or €520 million below projections, according to exchequer returns published today.

The figures for the key month of November, which includes returns for corporation tax and self-employed income, showed tax revenues for the year to date stood at €31.8 billion.

While this was €2.3 billion or 7.9 per cent higher than the same period last year, it was below the €32.3 billion originally targeted by the Department of Finance.

Part of the shortfall was explained by the ongoing weakness in VAT receipts, which came in €81 million behind target for the month.

VAT, which is due to go up by 2 per cent in next week’s Budget, is now €464 million or 4.6 per cent below projections for the year.

Falling VAT revenues reflect a weak domestic economy and low consumer confidence.

Corporation tax was also €236 million or 6.3 per cent off target for the year, while income tax receipts were down €272 million or 2.1 per cent on what was projected.

Income tax receipts, which stood at €12.7 billion for the year, were 22.5 per cent up on last year primarily as a result of extra taxes introduced in budget 2011, such as the universal social charge.

Stamp duty was €442 million or 51.6 per cent ahead of target primarily as a result of the pension levy, introduced earlier this year.

The figures showed the deficit stood at €21.4 billion, up from €13.3 billion at the same stage last year.

The Department said the €8 billion increase was mainly due to a €10.1 billion increase in non-voted capital expenditure, composed of a €7.5 billion bank recapitalisation payment made in July and €3.1 billion in promissory notes given to Anglo Irish Bank, Irish Nationwide and the EBS.

On the spending side, total net voted expenditure at the end of November was €40.7 billion, which was just €94 million or 0.2 per cent below the same period in 2010.

Net voted current expenditure at €37.7 billion was up €1.2 billion or 3.3 per cent year-on-year while capital spending at €3.1 billion was €1.1 billion or 29.5 per cent down on last year.

The Government is planning a €3.8 billion adjustment in next week’s budget, which will include €1.6 billion in tax measures and €2.2 billion in spending cuts.

“The domestic economy remains extremely weak," Alan McQuaid, chief economist at Bloxham in Dublin, said. "The Government needs a turnaround in private demand if it is to reach the sort of annual growth rates necessary to make inroads into its debt."