Income tax revenues are €230 million behind target
Income tax revenues were over €230 million, or 1.6 per cent, behind expectations at the end of November, according to the latest exchequer returns published by Department of Finance.
Over the 11 months to November, tax revenues are €171 million, or 0.5 per cent, behind target. However, compared with the same period in 2011 tax revenues at €33.8 billion are almost €2 billion, or 6.2 per cent, up.
The main reason for the lower tax revenues is a €300 million income tax shortfall in the month due to lower than expected revenues from the self-employed.
The Department said income tax revenues were 4.5 per cent higher year-on-year.
Value added tax was again ahead of expectations last month, up by €74 million in the month, and annual is now €180 million ahead of profile.
Corporation tax revenues are marginally behind expectations by €21 million (0.5 per cent), at €3.8 billion.
Excise duties, the fourth of the major tax revenue sources were 4.2 per cent, or €179 million, below target at the end of last month.
On the spending side, total net voted expenditure, at €40.6 billion, exceeded the target by 0.6 per cent or €249 million.
The returns were published less than 24-hours before the Government publishes its budget for 2013.
Tánaiste Eamon Gilmore said the Government is seeking to “protect the most vulnerable” as part of an adjustment of €3.5 billion to the economy.
While admitting that measures adopted will be “very tough,” Mr Gilmore said those who have more will have to pay more.
“It is a budget that is going to get us to 85 per cent of the adjustment that has to be made and will therefore put the end in sight for these type of measures and these type of budgets," he said this morning.
“What we’re seeking to do is to protect the most vulnerable and to have those who have [the] most [will]contribute [the] most,” he said.
Speaking earlier at Government Buildings, Minister for Education Ruairí Quinn said he was “satisfied” with decisions taken on the education budget. He said there had been “tensions” between the Labour Party and Fine Gael as final decisions were being taken, but they were not personal or negative.
"We are two separate parties with two separate traditions and ideologies," he said. "We agreed on 90 per cent of the changes without much difficulty."
Mr Quinn made his comments after Minister for Finance Michael Noonan dismissed reports of acute strain between the Coalition parties over tomorrow’s budget, saying most of the plan had been agreed for weeks.
Some details of tomorrow's budget have emerged. The new property tax to be announced will be reduced slightly as a result of the late addition of the so-called mansion tax for properties worth over €1 million.
Government sources yesterday confirmed that the levying of a higher tax rate on high-value properties will have a knock-on effect for middle and lower income households but conceded it would be marginal. The rate to be unveiled by Mr Noonan tomorrow is expected to be 0.18 per cent of the value of the property, with a rate of 0.25 per cent for properties worth over €1 million.
The new rate would mean a tax bill of €450 per annum for a house worth €250,000 as opposed to €500 if the rate were 0.2 per cent.
The new tax will yield some €250 million for the exchequer in 2013 after it is introduced in July, and €500 million in a full year.
Some Fine Gael Dublin backbench TDs said homeowners in the capital would be more adversely affected by the tax.
While most of the €3.5 billion in adjustments were signed off by Cabinet after a fraught meeting on Saturday, negotiations involving the two biggest spending departments, Health and Social Protection, were continuing last night, as Minister for Public Expenditure Brendan Howlin attempted to finalise the adjustments .
Government sources confirmed the targeted cuts for both departments had been reduced by €150 million each. The target for cuts in Social Protection has been reduced from €540 to €390 million, while the overall adjustment in Health will be €780 million, down from €920 million. Mr Howlin and Mr Noonan have found savings elsewhere and the more modest targets will allow both Ministers, Joan Burton and James Reilly, to row back from making the most severe cuts.
Backbench TDs from both Coalition parties voiced discontent about various aspects of the budget. A number of Labour TDs expressed disappointment that there would be no increase in the universal social charge for those earning over €100,000.