Exchequer boosted as recovery increases the tax yield
THE rise in employment is starting to show in the State's coffers, with more cash gathered by the taxman.
The latest exchequer returns show that income tax was up 3.5pc in the first three months of the year, compared with the same period last year, while PRSI also surged upwards.
Experts said this reflected the rise in employment, after the Central Statistics Office revealed that 61,000 new jobs were created during 2013.
VAT was also up 6.4pc compared with the first three months of 2012, although the Department of Finance attributes much of this bounce to an increase in car sales.
Finance Minister Michael Noonan hailed the figures as showing a solid start to the year.
"In line with the improvement in the domestic economy, the reduction in the Live Register and the increase in employment levels, tax revenues are growing and expenditure on public services is within budget," he said.
Public spending was 2.5pc lower than anticipated for this time of the year, but the Department of Health was already fractionally over budget – by 1.5pc.
The Department of Finance said it anticipated that this would be a challenging year for the HSE. But it said it was satisfied that the target for required savings could be met.
Key figures from the exchequer returns show:
- €3.8bn was brought in via income tax in the first three months of the year – up 3.5pc on the same period last year and 0.1pc above target.
- €3.51bn was raised in VAT – up 6.4pc on the first quarter of 2013 and 1.6pc better than estimated.
- Excise was up to €256m – a rise of 11.5pc compared with the same period last year and 11.2pc better than expected, signaling that we are smoking and drinking more than the Government thought.
- €214m was brought in through the property tax – 1.1pc better than expected.
- Receipts from PRSI and the National Training Fund were up 12.1pc.
- Spending, at €10.26bn, was 2.5pc lower than officials had targeted.
- The deficit – the gap between how much the State spends and takes in through taxes and other revenue – was €2.3bn. This compares with €3.7bn at the end of March last year.
Alan McQuaid of Merrion Stockbrokers said it was still too early to read much into the figures.
However, accountants Grant Thornton said it was a very solid start to the year, while specialist bank Investec described it as impressive.