Monday 23 October 2017

VAT receipts help boost revenue, but income tax below target

Tax take: Finance Minister Michael Noonan. Photo: Steve Humphreys
Tax take: Finance Minister Michael Noonan. Photo: Steve Humphreys
Colm Kelpie

Colm Kelpie

The amount of tax collected so far this year is €44m better than expected, even though income tax has fallen short.

Income tax is 6pc below the target for February, which runs counter to data showing a steady fall in unemployment.

But the Department of Finance said this was due to exit taxes on life assurance policies coming in below target.

So far this year, €7.47bn has been collected in taxes - €44m, or 0.6pc, ahead of target.

The total has been boosted by better-than-projected VAT receipts, which are €212m ahead of profile even though February was a non-VAT month.

The better-than-expected performance was helped in part by lower than projected repayments to companies.

Strong

Peter Vale, tax partner at Grant Thornton, said Finance Minister Michael Noonan would be hoping that ongoing strong VAT receipts and corporation tax collections prop up any further underperformances.

"However, longer term, both VAT and corporation tax receipts remain susceptible to developments elsewhere, including Brexit and potential US tax reform," he said.

Davy Stockbrokers struck a more upbeat tone, saying the data paints an encouraging picture.

"The highlight so far is VAT receipts, up 17pc on last year," Davy economist Conall Mac Coille said.

"The public finances are already €130m ahead of the Government's €1.2bn deficit target for 2017."

So far this year, income tax is 3.8pc below target, corporation tax is 4.7pc lower, excise is 7.3pc below, and stamp duty is 12.9pc under. VAT is 8.1pc above target.

Irish Independent

Also in Business