The Department of Finance has reiterated that there was no sign that cross-border shopping was affecting the State’s finances as Vat revenues fell short of expectations last month.
At €201m, Vat revenues in a so-called non-Vat month brought in €82m, or 29%, less than expected in October, because of large repayments, the Department of Finance said. And over the full 10 months, Vat revenues performed much better by bringing in almost €11.22bn, coming up short of expectations by €118m, or 1%.
Exchequer figures to October showed the amount the Government collected in taxes came to over €38.98bn which was almost exactly on target. In October, overall revenues of almost €3.77bn exceeded the target by €219m, or by 6.2%. However, in the month there were large out-performances by corporate taxes, excise duties and capital gains taxes, as well as the large under-performance by Vat.
Corporate tax revenues brought in €753m in October, which was 6.6% above target. There was a similar picture over the full 10 months with corporate revenues of over €5.42bn so far bringing in €216m more than expected.
In recent years, corporation tax revenues have strongly outperformed targets mainly because of the growth of profits by multinationals based in Ireland and the huge accounting moves by a small number of the world’s largest companies transferring intellectual property into the State.
In the latest month, income tax revenues at over €1.64bn brought in slightly more than expected. Thus the shortfall in the 10 months narrowed to 1%. In the early part of the year, income taxes had under-performed.
Excise duties posted an outsized contribution but the Department of Finance said this was again caused by tobacco firms building up stocks before the introduction of plain packaging. At €733m in the month, excise duties brought in €165m, or 29%, more than expected. The exchequer spent about €5.83bn servicing the state’s debts in the first 10 months, down €592m on last year.
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