Half our taxes pays off interest
MORE THAN 50pc of all income tax is being used by the Government to make payments on the interest on the national debt.
The latest exchequer returns outline that the State paid out €2.6bn in interest in the first five months of the year while collecting €5.1bn in income tax.
The total tax receipts for the five months to the end of May came in only slightly behind forecasts but there continued to be a big slide in the tax take.
The Government is now 0.5pc behind target as higher income tax payments fail to make up for a collapse in taxes paid by companies.
Tax receipts were €70m or 0.5pc below targets set out in the last Budget -- mainly due to a shortfall of ¤140m in corporation tax receipts, the figures show.
That compares with the year to the end of April tax take of €108m, which was 1.1pc above target.
The Department of Finance has indicated that some companies are deferring their payments until the end of the year, but analysts believe that companies are struggling to survive as consumers continue to hold on to their cash.
Economist with Bloxham Stockbrokers, Alan McQuaid, said Government forecasts for a 9.9pc increase in the tax take over 2011 looks "overly optimistic". He described the latest figures as "disappointing but by no means a disaster".