The exchequer took in €43m less than it anticipated last month as unexpectedly-large Vat repayments dented overall tax revenues.
Vat is one of the big four tax-rich sources of revenue for the Government.
Exchequer figures showed Vat contributed only €321m in revenues in February €69m less than the department had budgeted for from that tax source.
That meant that revenue collected from all tax sources, at over €2.79bn in the month, was €43m behind its target. On the spending side, Ireland’s additional contribution to the EU’s budget significantly increased the amount the Government allocated for non-voted expenditure.
The issue of repayments of Vat was a feature over a number of months last year and affected the assessment of the Government tax figures on months when Vat is not due to be paid, as was the case in February.
In January, Vat revenues flowed strongly, reflecting the payments over the Christmas period from retailers. A department spokesman said that non-Vat months had in the past skewed the figures because repayments can “significantly” affect the net amount the tax delivers in any single month. The other three major tax heads were strong, the spokesman said.
At over €1.58bn, income tax was the single largest tax source in February — contributing €17m more than its target for the month. That will likely soothe concerns that the trend in the early part of last year, when income tax revenues underperformed despite the strong growth in jobs, will not be repeated in 2018. Its February performance was described as robust by the department. Excise duties were the second largest source of revenues in the month — collecting an above-target €379m. At €188m, corporation tax receipts were almost 8% below target for February. For the whole of 2017, the exchequer collected €8bn in corporation taxes, with the bulk collected in the latter part of the year. And at €83m, motor tax undershot its target by €5m.
Among other smaller tax heads, capital gains and customs revenues performed better-than-anticipated. On the spending side, the Government has still to execute its expenditure plans so far this year, said Conall Mac Coille, chief economist at Davy.
The figures showed ‘voted expenditure’ of over €7.36bn for the first two months was €100m short of the amount the Government had planned to spend. However, a large annual rise in non-voted expenditure “was driven by a higher EU budget contribution due to Ireland’s increased share of EU budget obligations and a timing issue”, the department said.