EXTREMELY bouyant corporation tax revenues would give the Minister for Finance, Mr Quinn, scope for significant tax cuts in next year's budget, according to Goodbody Stockbrokers.
The strength of domestic demand means that the tax revenues may be £400 million more than predicted by the Minister when framing his budget for the current year.
This in turn means that the Government would have to borrow substantially less than the £729 million budgeted for by Mr Quinn, according to Mr Han de Jong, economist with Goodbody Stockbrokers.
Goodbody predicted the Exchequer Borrowing Requirement (EBR) for 1996 would be £375 million, or 1 per cent of the Gross National Product (GNP).
Mr de Jong predicted that this would become apparent next week - when the Government publishes the figure for the amount of money borrowed by the Government to the end of July. "Given the strength of the corporation tax receipts in July this year we expect the EBR to be very close to zero," he said.
This is despite the EBR figure for the end of June standing at £455 million.
The figure for the end of June was artificially high because of delays in payments to the exchequer due from the European Union under the Cohesion and Regional Development funds.
If we include the latest data on corporation tax in the calculation, we roughly estimate that tax revenue is some 10.9 per cent ahead of 1995, against a target of 6.5 per cent," Mr de Jong said.
The growth in corporation tax revenues would more than compensate for increases in borrow to meet unbudgeted expenditure including the increase in the provision to cover the cost of compensation payments awarded by the Hepatitis C tribunal.
"Our main conclusion at this point is that the very buoyant tax income would enable the Minister of Finance to push the EBR this year to a very low level," said Goodbody.
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