Booming tax revenues have led to an overall Exchequer surplus of £2.4 billion (€3 billion). It is the highest surplus yet recorded, although it is £75 million lower than the amount forecast by the Minister for Finance, Mr McCreevy, at the time of the Budget in December.

The figure far exceeds the Department of Finance predictions at the beginning of last year, when it estimated the surplus would amount to £1.6 billion.

The £75 million shortfall would have been greater but for lower spending on teachers' pay, on unemployment payments and interest savings on the national debt. The surplus is now running at 4.6 per cent of gross domestic product, the highest in the EU. The general Government debt has provisionally fallen to 39 per cent of GDP from 50 per cent in 1999 and is expected to fall to 33 per cent in 2001. Tax revenue in 2000 was £21.3 billion, 14.9 per cent higher than in 1999, compared with a Budget target rise in 2000 of 9.6 per cent but lower than the 15.8 per cent forecast in the 2001 Budget.

Continuing strong employment and pay growth meant income tax was up 13.5 per cent compared with a 5 per cent target. Unexpected DIRT returns from the financial institutions added £600 million, second secretary Mr Donal MacNally said.

Corporation tax rose 13 per cent, slightly lower than the original Budget target of 16 per cent. Department officials said they were not aware of any reason for this.

VAT was also up strongly to just more than £1 billion, 20.6 per cent ahead of last year. In contrast, excise duties were up 5 per cent, compared with a 7 per cent target.

Capital taxes came in 54.4 per cent ahead compared with a target of 21 per cent, mostly because of higher than expected capital gains tax.

Spending also came in slightly lower than predicted in December at £13.16 billion - an overrun on the original Budget target of about £242 million and an increase of 8.7 per cent on 1999. Health spending accounted for £211 million of the overrun, mainly due to the conclusion of the non-consultant hospital doctors dispute. Education spending overran by £209 million, mainly because of additional grant payments and a shortfall in European social fund receipts. Social welfare supplied savings of £110 million.

The capital deficit came to £3.09 billion compared with a Budget target of £2.95 billion and a December estimate of £3.02 billion.

Funding for Luas came to less than expected as did IDA and Enterprise Ireland grant spending. These were offset by increased spending on infrastructure and refugees.