Tax receipts for year €742m ahead of target

Tax receipts for the year are now €742 million ahead of target, according to the latest exchequer returns.

The figures show the public finances are continuing to benefit from a surge in corporation tax, which came in at €2.67 billion for the six-month period to the end of June, some €505 million or 19 per cent above profile.

Overall, the Government collected €22.5 billion in tax revenue, which was €1.9 billion up on the corresponding period last year.

The other strong-performing tax head was excise duty, which amounted to €2.76 billion for the period, some €401 million or 14.5 per cent ahead of projections.

This was linked to increased imports of cigarettes ahead of the introduction of plain packaging, which is expected to unwind later in the year.

Income tax, the largest of the Government’s four main tax heads, came in at €8.77 billion, in line with department projections.

This represented a year-on-year increase of €462 million or 5.6 per cent and reflects ongoing recovery in the labour market.

VAT, a key indicator of health in the retail economy, generated €6.2 billion, which was €230 million below profile.

On the monthly basis, VAT receipts were also €110 million or 36 per cent behind expectations.

Repayments

A department spokesman said the VAT figures reflected a large level of repayments going out in a non-VAT month.

He also said the underlying trend was consistent with the latest retail sales figures from the Central Statistics Office (CSO).

Total net voted spending came in at €20.8 billion, which was marginally below projections.

The department said spending in 12 of the 16 government departments was below targets set at the start of the year.

Of the four exceptions, the largest overspend was in health, which was 2.1 per cent or €137 million above target.

With new EU rules restricting the use of supplementary budgets, the Government will not be in a position to roll this over into the following year as it did last October.

The latest returns resulted in an exchequer deficit for the period of €1.14 billion compared to a deficit of €292 million for the same period last year, albeit last year's figures were flattered by a €2.1 billion payment generated from the sale of Permanent TSB shares, and a transfer from the national pension reserve fund.