TAX REVENUES in April were 1.3 per cent down on the same month last year at €2.08 billion, according to Department of Finance figures. This, however, was slightly better than expected on budget day.

Exchequer returns published yesterday show that, over the first four months of the year, tax revenues stood at €10.8 billion, up 12.4 per cent on the same period in 2011 and 3.5 per cent ahead of the budget day target.

Of note were the value added tax returns. At the beginning of the year, the standard rate of VAT was increased from 21 per cent to 23 per cent. There were fears that this increase could have been self-defeating, given already weak consumption.

These fears have thus far proved unfounded, as VAT revenues have exceeded the Governments expectations in the first four months.

Those expectations were, however, modest. The two percentage point rise in VAT was budgeted to generate an increase in revenue of just 1.4 per cent in the first third of the year.

Non-tax exchequer revenues, which are mostly accounted for by fees the banks pay for the State guarantee of their liabilities, stood at €710 million in the January-April period.

The exchequer revenue figures, combined with separate figures on the numbers of welfare claimants and the rate of unemployment in April, also published yesterday, suggest a weak but stable economy at the beginning of the second quarter of the year.

Exchequer spending was running 64 per cent ahead of revenues in the first four months of the year, standing at just under €19 billion.

There was a small increase in “voted” spending compared to the same period in 2011. On budget day, the Government had planned that, by this stage of the year, a small decrease would have been recorded.

Overspending in the two biggest budget departments – welfare and health – accounted for the missing of the targets. Most other departments spent less than planned, thus partially offsetting the overshooting welfare and health bills.

“Non-voted” spending, which is dominated by the servicing of the national debt, rose sharply. According to the Department of Finance, debt-servicing costs rose by €400 million between January and April 2012 compared to the same period in 2011.

The deficit between spending and revenues in the first four months of the year stood at €7.1 billion, down from €9.9 billion in the same period of 2011.

The exchequer figures are prepared on a cash basis and can be subject to greater distortion than accruals-based figures.

The monthly exchequer figures also provide only a partial picture of public spending and revenue.

The more comprehensive general government accounts, which were published last week, showed that total revenue last year stood at €56 billion last year.

Exchequer revenues, which exclude social insurance contributions, among other revenue streams, stood at €34 billion in 2011.