herald

Saturday 10 December 2016

Tax revenues close to boom time levels as state collects an extra €3bn

taxes

Michael Noonan
Michael Noonan

A SURGE in companies making profits along with increased consumer spending has brought the country's cash flow within touching distance of the pre-crash record set in 2007.

Figures to be released today will show that Revenue Commissioners collected almost €500m more tax than predicted for November, and nearly €3bn in the year to date.

The boom-like Exchequer returns, which are primarily driven by corporation tax and Vat, have surprised even the most senior politicians and officials in government.

"They are astronomical and will allow us to balance the country's budget much faster than planned," one source told the Herald.

The figures for the first 11 months of the year will surpass Finance Minister Michael Noonan's targets for the full year - effectively meaning that any monies collected in December are unplanned.

It is understood that companies paid around €300m more in November taxes than anticipated by the Department of Finance and the total corporation tax collected this year is well over €2bn ahead of projections.

The chairman of the Revenue Commissioners, Niall Cody, has written to the Department of Finance to outline that they believe the main reason for the huge rise in corporation tax is "improving trading conditions".

Windfall

He noted that just €300m of the extra money collected could be considered as a windfall that will not reoccur in future years.

For the first time since the crash the Government has a surplus for the year, which is currently around €340m.

The figures are helped by a number of one-off transactions, but even when they are excluded the figures are significant.

In Budget 2016, Mr Noonan announced tax cuts and spending increases of €1.5bn, but indicated that the wiggle room for 2017 would be as little as €500m and €1bn in 2018.

However, sources told the Herald that these figures would be revised upwards if the Government's coffers continue to perform as strongly as the past 11 months.

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