The Department of Finance has blamed the introduction of a new European wide payments system for a year on year €644m decrease in tax income for the month of January.
The 17.1% drop, from €3.774bn to €3.130bn was because of the introduction of the Single Euro Payments Area (SEPA) which slowed down Revenue’s receipt of certain taxes from three days to seven days.
The department insisted it was “a technical timing issue” and would not alter the tax forecast for 2014 as it is expected January tax revenues have grown about 5% year on year.
SEPA has been introduced to make it easier to do business in 33 countries across Europe.
The largest single source of revenue for the exchequer, income tax, totalled €1.236bn for the month, down 10.9%, or €151m year on year.
Vat receipts were also well down, making it difficult to assess if there was a rise in spending at Christmas. Vat was down 21.4% or €372m to €1.369bn.
Corporation tax receipts were down 60%, but the department said it was also hit by the delayed direct payments system
Excise duties at €342m were up €24m, a large part of which benefited from the increased duties announced in Budget 2014. Due to an increase in car sales, Vehicle Registration Tax was also up.
Stamp duties were down €181m to €52m, but this was primarily due to a €170m receipt in January 2013 in relation to health insurance policies renewed in the last five months of 2012.
An exchequer deficit of €1.1bn was recorded in january 2014, compared to a surplus of €0.7bn in January 2013.
Net expenditure for January was €4.134bn, a year on year increase of €152m.
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