Good outlook for public finances with tax revenues €900m ahead of target
Exchequer returns for August show tax receipts totalled €22.9 billion at the end of last month, €1.5bn ahead of a year ago.
The rate of increase of tax revenues has exceeded the target set by the Government on budget day and indicates the amount it needs to borrow this year to fund public expenditure will be lower than planned.
At the end of August an Exchequer deficit of €629m was recorded, compared to a deficit of €243m in August 2004.
Income tax receipts were up from €6.4bn to €6.7bn, reflecting the strength of the labour market despite recent jobs losses. Income tax receipts also include money netted by the Revenue Commissioners from its special investigations into tax evasion. The buoyancy of the property market helped public finances, with VAT receipts and stamp duty strongly ahead.
“The two big earners between July and August were stamps and excise duty. The summer is not an especially strong time for house sales so we are surprised at the big jump in stamp receipts. Neither is it obvious why excise duty receipts shot up although fine weather may have helped sales of alcohol,” Davy Stockbrokers economist Robbie Kelleher said.
However, corporate tax receipts were down some €400m from the same period a year.
Green Party finance spokesman Dan Boyle said this figure questioned the strength of the economy. “If the Exchequer deficit is rising and if Irish-based companies are seemingly less profitable what does this indicate for the medium term future of the Irish economy,” he said.
“These figures coupled by [Finance] Minister [Brian] Cowen’s failure to anticipate the effect of rising oil prices have eroded his ability for any significant innovation in planning toward next year’s budget.”
Separately yesterday, figures from the Central Statistics Office show the rate of unemployment remained steady last month at 4.3%
The number of people signing on for unemployment benefits increased slightly in August, most due to short term claims. The seasonally adjusted Live Register rose from 158,900 in July to 159,100 people in August.
