Exchequer deficit declines but tax take falls short of expectations
Latest Exchequer returns for January and February published yesterday, show a deficit of just under €1.95 billion for the period.
This was down from a deficit of just over €2.4bn for the same period last year.
However, a shortfall in VAT receipts meant that tax revenue is running behind government targets by nearly €130m.
The two months’ total tax take taking in everything from income tax, excise duty, corporation tax, capital gains and acquisitions tax, stamp duty and VAT amounted to €4.84bn, which is 2.2% up on the €4.74bn recorded in the corresponding stage of last year.
Increased excise duties drove the annualised increase, while the universal social charge will be measured in next month’s returns. Tax revenues, however, are still behind government targets and this has been criticised by industry groups.
“As in the past, various excuses will be trotted out to explain the failure to meet government targets, but there are no excuses for what is happening at a time of rampant unemployment in the construction industry and economy,” said Tom Parlon, director general of the Construction Industry Federation.
“It’s extremely regrettable that capital investment is already falling behind target, continuing the trend of recent years. The Public Capital Investment Programme has borne a disproportionate burden of Ireland’s fiscal adjustment, so the failure to meet the very slimmed down targets for 2011 is very serious for employment in the industry and for activity in other parts of the economy.”
While income tax receipts increased in the period, those for corporation tax and VAT decreased on a year-on-year basis.
But reaction to the latest figures hasn’t been universally negative.
Davy Stockbrokers said that the latest overall tax revenues remain “broadly on track” to meet the government’s targets.
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