Tax take ahead of target

 

Tax revenues were slightly ahead of target in the first nine months of the year, according to Exchequer figures published today.

Income tax receipts were 1.6 per cent ahead, at €9.25 billion, but the amount of VAT, corporation tax and excise duty collected all fell short of Department of Finance targets.

The Exchequer deficit stood at €20.7 billion, up from €13.4 billion in the same period last year, an increase largely brought about by the cost of recapitalising the banking system.

When banking related payments are excluded, the Exchequer deficit fell by some €3 billion on the same period in 2010.

Expenditure in the first nine months was just under €35 billion, €650 million more than in the same period in 2010.

Just under €24.1 billion has been collected by the Exchequer in total in 2011, some €160 million or 0.7 per cent more than forecast. The total is 8.7 per cent more than what was collected in the same period last year. The Department of Finance said this rise was aided by receipts collected from the pension levy.

VAT receipts at €7.99 billion were €300 million - or 3.6 per cent - behind expected levels and 2 per cent lower than in 2010.

The €2.05 billion of corporation tax gathered in the first three quarters was 1.5 per cent behind target, and 6.1 per cent behind the amount collected in the corresponding period last year.

There was a 2.3 per cent shortfall, or €77 million, in the amount of excise duty collected, but the amount of stamp duty collected is 51.9 per cent ahead of target at €1.1 billion, largely due to the pension levy.

In a joint statement, Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin said: "Our economy has returned to growth and notwithstanding the impact of banking related expenditure on the budgetary numbers, the public finances are clearly moving in the right direction. We are on track to meet budgetary targets for the year as a whole."

"Nonetheless, there can be no room for complacency. The deficit in the public finances remains large, despite the recent improvements, and it is crucial that we continue to reduce the gap between our revenues and expenditure in the coming years," the statement continued.

Total net voted expenditure fell by €749 million (2.2 per cent) to the end of September.

Net voted current expenditure is €471 million (1.5 per cent) below target with the main
underspends on the Social Protection and Agriculture, Fisheries and Food Votes of €115 million (1.1 per cent) and €113 million (16.6 per cent) respectively.

The underspend on the Social Protection Vote is due to higher than expected PRSI receipts, which are offsetting overspends on some schemes, including Jobseekers Allowance.

The Agriculture underspend is due to lower than expected expenditure on a number of schemes, the Department of Finance said.

The justice and health areas showed overspends of €52 million (3.4 per cent) and €17 million (0.2 per cent) respectively at end-September.

The Exchequer figures came on the same day the Central Bank revised its GDP forecast for 2011 upwards and predicted the Irish economy will now grow by 1 per cent.

This is a marginal improvement on the Central Bank’s July quarterly bulletin, when it said GDP would increase by 0.8 per cent.