Exchequer returns fail to reach tax target

TAX revenues are continuing to improve on last year but are marginally below the Government’s expectations.

The latest Exchequer figures published yesterday showed that the state’s tax take to the end of May came to €12.79 billion, an increase of €677m, or 5.6%, on the corresponding period last year.

However, the Government had expected to take in €12.86bn by now, meaning the tax take was about 0.5% below target.

Worryingly, corporation tax — which is levied on company profits — was €70m, or 10.4%, behind target for the first five months of the year.

The Department of Finance said that a significant part of the shortfall in corporation tax was due to timing issues.

“It now seems that some corporation tax payments originally scheduled for collection in May will take place later in the year,” it said.

However, independent analysts warned that the dip in corporation tax could signal further trouble.

“Latest reports on the US economy show that it may be heading towards a double-dip recession due to lower than expected employment numbers,” said Frank Walsh of Grant Thornton.

“It is worrying to see these Exchequer figures show that the continued slowdown in the global economy has arrived in Ireland and is affecting our corporate growth rates.”

The figures came as Finance Minister Michael Noonan said Ireland might be able to return to the markets to borrow “in the third quarter of next year”.

Speaking in the Seanad, Mr Noonan also reiterated that Ireland would repay all its debts and meet the obligations of the EU/IMF bailout programme.

“Ireland’s programme is on track and we are doing what is necessary to restore our ability to fund ourselves,” he said.

Separately, Senator Mark Daly called for the Attorney General to appear before the Seanad to explain why the National Asset Management Agency appeared to be breaking the law and costing taxpayers hundreds of millions of euro in the process.

Mr Daly claimed that NAMA, which was set up to take toxic property loans from the banks, was failing to meet legal requirements to sell all assets under its control by way of auction or tender.

“I have been informed by people involved in the industry that there is widespread corruption in this regard,” he said. “People whose assets are in NAMA are now buying back their assets at below market value, which is hard to believe.

“The taxpayer is now losing not tens of millions of euro but hundreds of millions of euro because NAMA is not selling assets in the manner set down by the Oireachtas. These assets should be sold in a transparent manner.”

But NAMA said it was “very surprised” by the senator’s comments. “The senator made similar comments some months ago after which the chairman and chief executive of NAMA met with him and wrote to him asking him to substantiate his remarks and he has not done so.” it said. “The senator should desist from making allegations of such a serious nature with nothing to back them up.”

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