herald

Wednesday 7 December 2016

Tax take was €805m better than expected

exchequer

The state took in €805m more than expected in tax in the first half of the year.

The take at the end of June was €20.6bn compared with a targeted figure of €19.8bn.

Some €54m more than expected was taken in via income tax in the first six months, while VAT was €36m above profile.

Compared with the same period last year, the tax take was €2.16bn higher, or 11.7pc.

About €478m more in income tax was taken in so far this year compared with the first half of last year, while €441m extra was taken in via VAT.

On a monthly basis, income tax was bang on target at €1.27bn. Overall, the tax take for June was €3.34bn, €71m or 2.2pc better than expected.

VAT receipts were €54m below profile for June, but June is a non-due month for receipts.

June is regarded as being important for corporation tax receipts. Corporation tax was up €121m, or 10.8pc, on profile.

At the end of June the exchequer recorded a deficit of €292m compared with €4.9bn in the same period last year.

The Department of Finance said the improvement in the exchequer balance was driven by increased tax and non-tax receipts as well as a number of one-off transactions.

Without the one-off transactions, the improvement would be €2.7bn.

Philip O'Sullivan, an economist with specialist bank Investec, said the data showed a strong performance for the first half of the year.

Peter Vale, tax partner at consultants Grant Thornton, said the half-year figures show the Government is well on track to meet its end-of-year targets.

confidence

"The figures tie in with both independent surveys and anec- dotal evidence of increasing consumer confidence," he said.

"Despite this increased confidence, a significant portion of additional disposable income is still being used to repay debt or put on deposit.

"If consumer confidence continues to increase, you would expect this to be reflected in spending."

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