Latest Exchequer returns €500 million ahead of target

Tax revenues for the first six months of the year were ahead of target, according to the Department of Finance.

The latest figures show tax revenues were €500 million or 3.1 per cent ahead of forecasts in the year to June and an estimated 8.3 per cent ahead of the same six-month period last year.

Three of the four main sources of tax revenue; corporation tax, income tax and VAT, were ahead of expectations.

Corporation tax was €274 million, or 16.1 per cent, ahead of target with the monthly corporation tax target in June, the second largest for the year. Receipts in the month were €108 million better than expected.

Income tax was €215 million or 3.1 per cent ahead of profile and is up an estimated 13.5 per cent year-on-year on an underlying basis.

At the end of June, VAT receipts totalled €29 million, which was 0.6 per cent ahead of target. Receipts were up 2.2 per cent on the same period last year.

Meanwhile, excise duties were almost exactly on target in June and are now just €35 million, or 1.6 per cent, below forecasts.

The four smaller tax groups; stamp duty, capital gains,capital acquisition and customs duties, were exactly in line with expectations for mid-year.

The Exchequer deficit at the end of June was €9.443 billion compared to €10.828 billion in the same period last year.

The cost of servicing the national debt to the end of June was €4.511 billion, some 2.5 per cent or €118 million less then the target figure published earlier this year. However, it is €2 billion higher when compared with the same  six month period in 2011.

Minister for Finance Michael Noonan said the figures were encouraging.

"The strong performance of income tax is especially noteworthy given that in Budget 2012 we introduced changes which removed over 333,000 low income earners from the universal social charge and income tax rates remained unchanged," he said.

"There are significant targets to meet in the second half of the year, but tax revenue is on an upward trajectory and at this point I am confident that our overall tax revenue target for 2012 will be achieved."

Minister For Public Expenditure and Reform Brendan Howlin cautioned that spending pressures remained.

"Given the importance of meeting our budgetary targets again this year, I will continue to stress to my Cabinet colleagues the need to adhere to the 2012 spending targets, as was done last year so that overall aggregate expenditure can be brought more in line with profile in the second half of the year," he said.