Tax cuts likely as State revenues soar

Tax cuts were signalled by Finance Minister Michael Noonan yesterday after exchequer figures revealed State revenues soared over the past year.

The tax take outperformed expectations by €1.24bn to push revenue to €41.3bn, 3% higher than anticipated, triggering talk of an easing of austerity.

The only worry for ministers in the figures was a 10% poorer than expected return from Local Property Tax, with the number of people pre-paying the levy halving year-on-year.

Total tax revenues rose by €3.48bn, or 9.2%, in 2014.

Mr Noonan said the figures meant he could repeat reducing the burden of the Universal Social Charge and income tax in the autumn. “We will at least be able to afford to do something similar next year as we did last October,” he told TV3.

A €649m emergency overspend in the Department of Health saw public spending edge above expectations.

Income tax rose by €1.4bn, or 8.9%, to stand at €17.16bn, which was €112m ahead of forecasts.

Vat was up €413m to €11.15bn, with corporation tax up €344m to €4.61bn.

Monies from the property tax were €58m below profile to stand at €491m.

Better economic news saw the deficit target of 5.1% of GDP passed, with estimates it will fall to 4% in final calculations.

However, Sinn Féin accused the Coalition parties of engaging in “propaganda” rhetoric with talk of USC cuts and tax tweaks. Party leader Gerry Adams called for a general election.

Taoiseach Enda Kenny indicated he expected 40,000 jobs to be added in 2015 and said next week’s Cabinet meeting would set out a fresh economic programme.

Public Expenditure Minister Brendan Howlin defended the level of higher than forecast spending, saying €100m was needed to deal with storm damage at the beginning of last year, and the health budget needed a boost.

“Monies were also directed to stimulus projects announced in 2014,” said Mr Howlin.

“As well as the stimulus monies and storm repairs, Government agreed to approximately €100m additional capital expenditure for 2014 for essential transport and Garda fleet replacement.”