Positive Exchequer returns for year to August 2014
Exchequer returns for the year to date to end of August 2014 indicate that Irish tax revenues were almost €1bn above target for the year to August 2014. This has led to speculation that a less austere budget than expected might by delivered by Finance Minister Michael Noonan later this year. Mr. Noonan however, while noting that the figures “and in particular the strong performance of income and consumption taxes are further evidence that the recovery is strengthening as the year progresses” noted that “we continue to borrow an average of €800m per month and this gap needs to be further reduced.” He added that “In Budget 2015, we will target a reduction in deficit to below 3%.” The Minister did further note though that “It is clear from the strong exchequer performance to date that the level of adjustment through tax and expenditure cuts required to achieve this will be significantly less than forecast at the start of the year. This is due to the growing economy generating extra tax receipts and ongoing control of expenditure."
Total tax revenue of €24.9bn was collected in the year to date to end of August, an increase of €2bn or 8.7% on the same period last year, and €971m or 4.1% ahead of target for this year. This breaks down across the different tax heads as follows
Tax Head Receipts Increase on PY +/- Target
Income tax €10.6bn €880m (9.1%) €172m (1.7%)
Corporation tax € 2.4bn €121m (5.4%) €186m (8.5%)
VAT € 7.4bn €577m (8.5%) €261m (3.7%)
Excise duty € 3.1bn €172m (5.8%) €156m (5.2%)
Other € 1.4bn €254m (22%) €196m (16.2%)
The Exchequer deficit of €6.3bn is €1.3bn ahead of target, mainly thanks to the increased tax receipts and reduced expenditure, with much the publicised overspend on health being compensated for by lower than expected spend in other areas.