Ireland: Tax take up again in May as budget adjustment of less than €2bn expected
05 June 2014
Posted by: Author: Colm Kelpie
Authors: Colm Kelpie, Fionnan Sheahan and Ailish O’Hora (Independent.ie)
The amount of tax collected in the first five months of the year was almost 3pc ahead of target, new figures show.
Both income tax and VAT were better than expected in May, signaling the improvement in employment and boosting hopes of an easier than expected Budget in October.Finance Minister Michael Noonan has strongly signaled that the Budget adjustment could be less than the planned €2bn given the better-than-expected tax revenues.
Some €15.59bn worth of tax was collected in the first five months – up €831m or 5.6pc on the same period last year."We’d be well ahead of the profiles above budget at the end of the fifth month and the year on year figures across the tax heads are quite significantly better,” Mr Noonan said.
He added: "I don’t think €2bn is the relevant figure, the relevant figure is to get the deficit below 3pc of GDP."With the tax numbers coming out this afternoon and a couple of other things on the horizon it might be possible to get below 3pc without an adjustment of €2bn."
"But it is only June so there is a lot of things will more. We will have a better idea as we get closer.”An exchequer deficit of €3.5bn was recorded to the end of May, compared with €5.3bn over the same period last year."
The Department of Finance said the main drivers behind the improvement were increased tax revenue, lower spending, and a significant reduction in bank guarantee payments associated with the liquidation of IBRC.
Income tax totalled €6.6bn to the end of May, an increase of €476 million (7.8pc) year-on-year and up €114m (1.8pc) from what was expected.VAT receipts totalled €5.21bn, up €39m or 0.7pc from the target and 4.4pc better than the same period in 2013.
This article first appeared on independent.ie.