Tax recovering but debt remains high, says Central Bank
Published 02/10/2015 | 02:30
Income tax now accounts for about 40pc of the total tax revenue - up from just 26pc in 2007, a Central Bank paper shows.
The latest Exchequer Returns today - the final figures before the Budget - are expected to show the tax take well ahead of expectations.
Ahead of this the Central Bank yesterday published a paper pointing out the strong recovery in income tax in recent years. It also urged the Government to put any unexpected, non-tax revenue towards paying down debt.
The paper, published ahead of today's Central Bank quarterly bulletin, states the overall level of government debt remains high and needs to be brought down to safer levels.
The paper said that support provided to the financial sector had added significantly to the debt pile.
"There would appear to be a strong case that any unexpected or windfall gains from these sources be used exclusively for debt reduction purposes," the paper states.
"Similar arguments could be made in relation to any future income receipts arising from either the IBRC related special portfolio and the expanded Asset Purchase Programme."
The paper also pointed out that the contribution from income tax to total tax revenue went from a third in 2000, to about a quarter by 2006.
The contribution from stamp duty and capital gains tax, by comparison, doubled in the first half of the decade against the backdrop of a booming housing market. Income tax now represents about 40pc of tax revenue, according to the paper.
The Department of Finance will today publish the final set of Exchequer Returns before the Budget, which is expected to show all tax heads ahead of expectations. Exchequer Returns for August showed that the taxman collected about €1.4bn more than forecast in the first eight months of the year, meaning the take for the entire year could end up close to €2bn healthier than thought in last October's Budget.
The data confirmed the pattern drawn by previous Exchequer releases, and came on the back of a number of positive economic reports. Meanwhile, new data from the Hughes Blake SME Examinership Index reveals that uptake on the mechanism has slowed as the economy has steadily improved.
Some 168 SME jobs were saved in the third quarter through examinership, the Index showed.
* MONEYLENDERS have been warned by the Central Bank it will impose sanctions if they illegally top up consumers' loans. The warning in a newsletter comes three months after this newspaper exposed the practice where consumers are given new loans before existing ones are paid off. The Central Bank wrote: "Of particular concern in the context of licensed moneylending is the issuing of additional loans to consumers who have not repaid, or cannot repay, an existing loan, leading them into a continuous spiral of debt."