Figures for the first two months of 2007 show tax revenues continuing to exceed Government expectations, but the rate of growth in the tax take has slowed significantly.
According to Exchequer returns published by the Department of Finance yesterday, the Government tax take in January and February was €8.25 billion. The out-turn compares favourably with the €7.3 billion received in the same period of 2006. But while the annualised rate of growth, 12.8 per cent in the year to date, compares favourably with a Government forecast for the period of 10 per cent (8 per cent for the full year), it marks a slowdown compared with last year's 16 per cent growth.
The slowdown in growth from stamp duty receipts was particularly marked. While still strong - receipts so far in 2007 are 22 per cent ahead of the year ago period - revenues from this source grew by 36 per cent in the same period last year.
The Government had expected a more marked slowdown in receipts: stamp duty received in the period amounted to €669 million, compared with an expected amount of €602 million, and with €547 million received last year.
The latest permanent tsb/ESRI index, published yesterday, shows house prices remained flat in January, suggesting that stamp duty receipts could continue to slow in coming months.
Corporation tax receipts of €761 million exceeded expectations by €183 million and were €214 million higher than the same period of 2006.
However, receipts disappointed expectations across a number of categories. Capital gains tax undershot forecasts by €64 million and income taxes were €19 million down on expectations while excise duties were €26 million behind target
Together with revenues from non-tax sources, total revenue for the period was €9.1 billion. Day- to-day spending was €6.9 billion, resulting in a Government surplus for the period of €2.2 billion.
Data so far suggests the Government will improve on its Budget target of a deficit of €546 million for the full year. However, the spending total reflected strong acceleration in the rate of day-to-day spending growth, which was 18 per cent ahead of the same period of 2006.
Alan McQuaid of Bloxham stockbrokers said continued growth in revenues was likely, but should not be taken for granted. "There are lots of uncertainties."
