Tax receipts up 7% in first quarter as deficit narrows to €966m
VAT is largest tax category as income tax rises but comes in below projections
Minister for Finance Paschal Donohoe noted the fact that all taxes were performing well reflected a sustainably growing economy. Photograph: Gareth Chaney/Collins
The Government spent almost €1 billion more than it collected in taxes and other revenue in the first three months of the year, official figures show.
Exchequer returns show the State collected €14.164 billion in taxes and other revenue in the first quarter of 2019 and spent €15.13 billion.
That left the State with a €966 million deficit for the three months to March 31st, 14.2 per cent less than the €1.114 billion shortfall recorded in the same quarter in 2018.
Tax receipts totalled €12.795 billion over the three months, up 7.1 per cent, or €843 million, on the same period last year.
Non-tax revenue during the first quarter of this year was €1.369 billion, up 29 per cent or €303 million on the same period in 2018.
Government departments spent €11.986 billion, 7.2 per cent or €809 million more than in the same quarter last year, but 2.6 per cent less than projected at the time of the budget.
Non-voted expenditure, including national debt repayments of €2 billion and European Union obligations, rose 6.4 per cent, or €188 million, to €3.144 billion.
The Government blamed extra EU contributions and the timing of the demand by Brussels for this money for the increase.
Minister for Finance Paschal Donohoe noted the fact that all taxes were performing well reflected a sustainably growing economy.
“This provides the resources to fund our public services and the investment to enhance our growth potential and address key infrastructural bottlenecks, with gross expenditure for the quarter up 6 per cent year on year,” he said.
Workers paid €4.973 billion in income tax to the State during the quarter, 6.5 per cent or €305 million more than in same period of 2018.
Department of Finance officials acknowledged this was €171 million below projections but said PAYE and the universal social charge were more or less on target.
VAT, collected on goods and services sold in the Republic, was the biggest contributor at €4.986 billion, 6.6 per cent or €310 million more than during the first quarter of 2018.
The quarter was the first in which hospitality businesses began paying VAT at 13.5 per cent instead of the 9 per cent applied in the recession.
Motorists, smokers and drinkers paid €1.375 billion in excise on fuel, tobacco and alcohol during the quarter, almost 40 per cent or €144 million more than in the first three months of 2018.
Department of Finance officials explained this increase reflected that a year ago, suppliers stockpiled cigarettes ahead of the introduction of plain packaging.
Capital spending, including housing, roads and schools, was €872 million, 10 per cent below target. However, officials argued that the €1 billion allocated to the first quarter was the least significant of the €7 billion that the Government plans spending on infrastructure this year.
The Department of Social Protection, responsible for welfare payments, spent €5 billion in the first quarter, in line with what was expected. Health was the next biggest at €4.2 billion, followed by Education and Skills at €2.33 billion.
Department of Finance civil servants said the exchequer figures showed no evidence of uncertainty over Brexit.