Tax take rises as S&P backs recovery

The Government’s tax take for November was more than 2% or €177m ahead of target, largely driven by another strong month for corporation tax. It is the most important month of the year for tax receipts.

The figures also mean the Government remains on track to meet its budget deficit targets.

“Total revenues are now €777m above expectations while spending discipline is also being maintained, at €784m below profile,” said David McNamara of Davy Stockbrokers.

“This leaves the exchequer deficit, related to the general Government balance, at €407m compared to €1.7bn in the same period in 2015, and the Government is well on track to hit its deficit forecast of 0.9% of GDP.”

Latest Exchequer returns, published yesterday by the Department of Finance, showed total tax receipts for the first 11 months of the year amounted to just under €45bn, nearly 2% ahead of target and up 6.5% for the year.

Corporation tax was the star performer, as expected, with receipts totalling €170m for the month, 8.1% above target. For the year so far, corporate tax take is now over €7bn, which is 11% higher and nearly €1bn more than expected.

Vat receipts closed the month 6.6% behind expectations mainly due to larger-than-expected repayments and are now 3.2% below profile for the year.

However, income tax receipts of €252m were nearly 9% ahead of target for the month and are nearly 1% ahead of schedule for the year.

Boosted by a strong performance from the self- employed sector, income tax take is now nearly 6% higher.

Meanwhile, Finance Minister Michael Noonan welcomed ratings agency S&P’s latest affirmation of its A+/A-1 scores on Ireland’s long and short-term sovereign rating and its statement that its outlook for Ireland remains ‘stable’.

“I welcome the assessment by S&P Global Ratings that Ireland’s economy is in a positive position and their agreement that Ireland’s economy is forecast to grow further,” Mr Noonan said.

“This assessment is in line with the Government’s own predictions. Indeed, the EU Commission and the ECB also affirmed that Ireland’s economic prospects remain bright.

“As the Exchequer returns have shown, the public finances remain healthy, have improved on last year and are ahead of projections for this year.

“It is, of course, true that each of these indicators published today note that we must remain vigilant and continue our prudent management of the economy.”