TAX REVENUES in May were slightly ahead of target, in line with the trend over the first four months of the year, according to the Department of Finance.

The exchequer return figures – on both the tax and spending side – provided no significant surprises, either negative or positive.

Over the January-May period, total tax revenues came to €14.4 billion. This was just under 3 per cent ahead of the Government’s Budget 2012 target and 12.5 per cent higher than the amount collected in the same period last year.

The three taxes which generate the lion’s share of revenue – income tax, value added tax and corporation tax – were all ahead of budget projections over the first five months of the year. Most other taxes were below target.

Exchequer spending was also slightly higher than anticipated when the budget was drawn up. In the first five months of the year, net departmental spending stood at €18.8 billion. This was 1.6 per cent above target.

Spending figures are broken down between current (day to day) expenditure and capital (investment) expenditure.

Current spending, at €17.9 billion in the first five months of the year, overran by 3.3 per cent. Health and welfare continued to account for this overshooting.

By contrast, there was a large underspend on the capital side, with €917 million leaving the exchequer for this purpose in the January-May period.

Another fast growing spending item is the servicing of the national debt. In the first five months interest payments came to €4 billion. Although this was sharply up on the same period of last year, it was €111 million lower than expected by the department.

The shortfall in revenue to cover spending came to €6.5 billion in the first five months of the year. This is well below the €10.2 billion deficit recorded in the same period of 2011.

Much of the reduction in the size of the deficit relates to the accounting treatment of the promissory note used to prop up the banking system.

While the revenue figures continue to suggest a weak underlying economy, the broader exchequer returns picture shows that the budgetary targets contained in Ireland’s EU-International Monetary Fund bailout remain on track.

Approaching the half-way point in the year, the probability is much reduced that the Government will have to consider introducing extra measures before the next budget.