Tax receipts lower than expected, but public finance stabilising overall

The Department of FInance has said that income tax receipts remain weak, despite a stabilisation of the public finances.

Exchequer figures for the first six months of the year published this evening show an improvement of almost €6bn compared to this time last year.

Broadly the tax take is on target as set out on Budget Day last December. The shortfall is about €227m.

VAT and corporation tax returns have performed better, but there is concern that income tax is 5.8% - about €300m - below target. This is a sign that people are still losing their jobs, working fewer hours, and for less money.

Finance officials say there also may be an element of a black economy, but that this is just speculation.

Minister for Finance Brian Lenihan said his overall target for the full year to take in €31bn in taxes remains achievable.

The Government needs €51bn to run the country, so about €20bn will have to be borrowed.

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