Tax revenues off target by €115m on eve of troika visit
The latest revenue figures have been published on the eve of this week’s visit to Dublin by the IMF/EU/ ECB bailout troika.
Finance Minister Michael Noonan moved to play- down the figures, insisting it would be righted by year’s end. However, he still warned another harsh budget was on the way.
Figures for the six months to June show tax revenues at €15.279 billion and the budget deficit growing to €10.8bn from €8.9bn at the same point last year due to €3bn being pumped into Anglo Irish, INBS and EBS.
Income tax receipts soared 21.5%, but this was due to the impact of the controversial universal social charge.
Corporation tax dropped 11.6% year on year and stands €116m below expectations. VAT was also down sharply, which the Government blamed on bad weather in February.
However, Department of Finance officials warned health spending could cause concern if it continued to rise above expectations, but social protection spending is €122m below forecasts.
Mr Noonan said cuts and revenue measures totalling nearly €4bn next year would be “difficult”.
“Looking forward to next year we have a correction of about €4bn to make and that is going to be difficult for Government departments because all the low hanging fruit has been taken so next year’s cut backs will be more difficult to achieve.
“Although there is some weakness in certain tax- heads, the Budget Day target for tax revenue in 2011 of €34.9bn remains achievable. Corporation tax and VAT were a little weaker than expected.
“On a more encouraging note, income tax is in line with what is a very large target due to the introduction of the universal social charge and other budget measures.”
The minister said the tax take was only 0.7% down and the deficit was in line with forecasts.
The troika returns to Dublin this week to inspect of how Ireland is coping with financial targets imposed on it as part of the emergency bailout deal.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
