Goodbody estimates tax revenue to be €2bn more than estimated

Tax receipts could be up to €2bn higher than the estimated target for 2015.

A report by Goodbody Stockbrokers says strong domestic growth is the main reason the tax take is already ahead of schedule this year.

It says the Government should focus the surplus on capital investment and VAT reductions over the next two years in order to sustain the economic recovery.

Chief Economist at Goodbody, Dermot O'Leary, says there has already been a tax overshoot in the first quarter and he expects that to continue for the year.

He said: "It is domestic-lead growth that is leading to this overshoot in tax revenues, we've seen an overshoot of over half a billion euro already in the first quarter of the year.

"For the full year, the overshoot could be up to €2bn because of the momentum that we are seeing.

"The Government has a decision to make, it does has some room for manoeuvre in budget 2016."