Revenue surplus of £655m in July

The Republic's Exchequer surplus grew by £655 million (€831 million) last month, fuelled by large increases in income tax and VAT revenues. The surplus, which measures the difference between what the State spent and what it took in as tax and other revenue, stood at £3.588 billion at the end of June.

The headline figure was down considerably from the June 1999 figure of £5.825 billion, which included the £3.5 billion that the Government got from the sale of Telecom Eireann last June. This year, the State got £1.139 billion under a clawback from KPN and Telia, the Dutch and Swedish telecommunications companies which were major investors in Telecom prior to the flotation.

When Telecom Eireann-related issues are stripped out, the June 2000 surplus is £133 million ahead of the June 1999 surplus.

The biggest increases were in income tax, which was up 13 per cent on the June 1999 figure at £3.9 billion. VAT receipts were up 20.2 per cent on a year-by-year basis at £3.6 billion. Excise duties, which include the tax on cigarettes and tobacco, also showed a marked increase on last June, growing 11.7 per cent to £1.985 million.

The figures are further confirmation of the continued rapid growth of the economy, according to Mr Jim Power, chief economist with Bank of Ireland Treasury. Bank of Ireland is predicting that the end-of-year surplus will be between £2.2 billion and £2.3 billion, well ahead of the Department of Finance estimate of a £1.8 billion surplus.