Exchequer figures show €14.4bn deficit

The Government tonight announced a €14.4bn black hole in the public purse despite better than expected tax returns.

The latest Exchequer figures showed the State collected €243m more in levies than expected, 1% ahead of the estimates.

Finance officials said payments from businesses for corporation tax dramatically boosted the Revenue books last month while the income tax intake remained low.

Joan Burton, Labour’s finance spokesman, said it was cold comfort with the cost of Government borrowing on international bond markets soaring to new highs.

“The truth is that Ireland is now set to post a world-beating deficit this year equal to nearly a third the size of the entire economy,” she said.

Ms Burton said another €800m in tax could be found by immediately shutting all property based tax relief and reducing relief for millionaire pension pots.

Despite the criticism the Department of Finance insisted forecasts for Budget 2011 would be met.

“The overall Exchequer position for the first 10 months of the year means that the Budget Day targets remain valid,” said the Department of Finance.

Officials noted next month was the most important of the year for tax revenues, with 15% of the annual target due for collection.

Arthur Morgan, Sinn Féin’s finance spokesman, said the poor income tax figures showed the Government’s policy of cuts was wrong.

“Clearly the warped priorities of Government of cutting the economy to encourage growth have failed. The Government needs to learn that the absence of jobs translates to tax shortfalls,” he said.

“This crisis is so severe that we cannot cut our way out.”

The Department of Finance briefing showed:

- Taxes are €1.4bn or 5.4% below the same period last year.

- Corporation tax receipts were €238m greater than expected.

- Smaller surpluses in excise duties and VAT which offset an income tax shortfall of €369m.

Meanwhile the Minister for Finance is expected later this week to publish updated figures for economic growth for the coming years.

Opposition parties have been calling for the figures, claiming they are unable to put together their own alternative budget plans without them.

A spokesman for the Department of Finance said a document containing the figures would be released within a few days.