Stronger April Exchequer returns as expectations of Budget income tax cuts grow
THE Government collected income tax of €1.47bn in April or 6.5pc more than the same month last year.
Income tax collected so far this year has risen 7.2pc as more jobs are created, according to the latest exchequer figures released this afternoon.
Overall, the Exchequer deficit stood at €4.8bn compared to €6.1bn in 2013.
The main drivers of this improvement in the deficit were reduced guarantee pay-outs, increased tax revenues and a reduction in net voted expenditure
The news means that the Government has more wriggle room and is sure to raise expectations of tax cuts in October when Finance Minister Michael Noonan is due to unveil his next Budget.
Mr Noonan, speaking at a Fine Gael event in Dublin yesterday, said the current level of income tax, particularly for lower-paid workers, was a major inhibition and barrier to people getting jobs.
He signalled clearly that he intends raising the bands to increase the level at which people begin to pay the higher rate of tax.
"The greatest inhibition in the income tax code is that on an income of €32,800 people go on the higher rate of income tax," he said.
While he has suggested tax cuts previously, Mr Noonan's comments represent the most tangible signal of his intentions for the Budget.