Tax revenues €460m ahead of last year

The public finances are off to a flying start in 2015 with tax revenues in January advancing some €460 million ahead the same period last year.

Exchequer figures released on Tuesday afternoon show the Exchequer is taking the benefit of the recovery in the labour market and in consumer spending.

The Department of Finance said the State collected almost €4.2 billion in tax last month, with VAT receipts increasing strongly and income tax on the rise as well. Corporation tax returns rose, as did returns from the local property tax and excise and stamp duties.

Net voted current expenditure stood at €3.74 billion, down €254 million year-on-year largely as a result of reduced social protection payments.

Although revenues at the start of last year were distorted by the introduction of the single European payments system (Sepa), the department said the year-on-year revenue increase was “in the order of €460 million” when taking the payment system into account.

The public finances were in surplus at the end of January to the tune of €781 million, compared to a €1.14 billion deficit in the same period in 2014. Taking Sepa’s introduction into account, the year-on-year improvement in the exchequer balance to end January was €680 million.

The department said figures for increased returns in individual tax bracket were readjusted “where relevant” to remove the Sepa distortion.

VAT returns reached €1.97 billion in January, as receipts came in from trading in November and December.

“This represents an increase of €225 million or 12.9 per cent, when compared to the corresponding month last year. The strong performance is in line with the positive retail data and consumer confidence from December,” the department said.

Labour market The State collected €1.5 billion in income in January, an increase of €58 million or 4 per cent on the same month in 2014. “This performance is consistent with the recovering labour market with solid employment growth as evidenced by the quarterly national household survey,” the department said.

Corporation tax receipts reached €49 million, representing a €35 million increase compared to the same period in 2014.

The department attributed a €62 million rise to €94 million in local property tax returns to a shift in payment patterns.

Excise duty returns reached €388 million in January, up by some €48 million year-on-year.

The State collected €72 million in stamp duty, up €19 million on January 2014 .

Non-tax revenues reached €266 million, up €47 million year-on-year, following the receipt in January of a special dividend from the ESB in connection with the State assets disposal programme.

Net voted capital expenditure rose €48 million to €181 million, driven by increased capital expenditure in the Departments of Defence, Children and Arts.

Total exchequer debt servicing costs in January stood at €285 million. This represents a year-on-year decrease of €83 million, when a transfer from the current accont to the capital account ius exluded. The decrease was primarily due to lower bond interest after the maturity last month of a 4 per cent treasury bond.

The requirement to make an annual sinking fund payment was removed in the Finance Act 2014.