herald

Tuesday 6 December 2016

Tax take half a billion euro ahead of target

EConomy

The state took in over a half a billion euro more in tax than targeted for the first four months of the year, but VAT receipts are weaker than expected.

Some €12.86bn in tax was collected up to the end of April, 4.2pc or €518m more than targeted, according to the latest Exchequer returns.

But the amount of money collected through VAT is proving to be less than thought. For the first four months of the year, €4.03bn was collected in VAT, around €43m less than expected.

However, compared with the same period last year, VAT receipts were up €377m, or 10.3pc. VAT receipts for last month were also down 22.2pc, but the Department of Finance said this was due to the fact that April was not a VAT month.

Income tax receipts were down 5.2pc last month, or €83m. The Department said this was wholly due to weaker DIRT receipts on the back of lower interest rates.

Although we have been in a low interest rate environment for some time, the is the first month this year when income tax receipts came in lower than expected. However, monthly figures can be prone to volatility, and for the year-to-date, income tax receipts are 0.9pc, or €53m, above profile.

Net spending for the first four months of the year totalled €13.7bn. This was around €218m below profile, but €65m higher in year-on-year terms.

The exchequer deficit at the end of April stood at €2.32bn, compared to a deficit of €4.75bn at the same time last year.

It comes as the European Commission said Ireland's economy would grow 3.6pc this year.

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