The Government has taken in more than €750m more than expected in taxes in the first five months of the year.
Exchequer returns published this evening show a €125m shortfall compared to a surplus of €641m at the end of May last year.
But the Department of Finance has said this is due to one off receipts last year and that there is actually an improvement in the public finances of almost €1.4 billion euro compared to a year ago.
New car sales, taking in more money from the sale of tobacco and a continuing surge in corporation tax are the main reasons for the improving exchequer figures.
Commenting on the figures, tax partner at Grant Thornton, Peter Vale said: "Overall, it's another strong set of figures, with figures for the year to date ahead of target, driven by particularly strong corporation tax and excise receipts.
"The main focus today was on the VAT figure as VAT receipts for the year to date were lagging behind target. The VAT receipts for May show a return to positive figures, with the numbers both ahead of target and last year."