Pressure mounting on Noonan as tax take fails to hit target
FINANCE Minister Michael Noonan was under increased pressure last night after tax -take figures came in lower than planned with just five weeks to the Budget.
Income tax, VAT, corporation tax, capital gains tax and capital acquisition tax all came in below target in the first 10 months of the year, according to the latest Exchequer returns.
This meant that total tax revenues came in 0.7pc below target at the end of October.
In September, the tax take was 0.7pc ahead of the targets set in the Budget last December.
The State has now collected €26.7bn in tax since the beginning of the year.
That's €184m less than it had hoped.
The figures came as the main European bailout fund was forced to delay a bond action yesterday.
The money raised was to go to Ireland as part of our bailout programme but the delays would have to be repeated several times before it would have any effect on the state finances -- and having money to pay public servants.
Economist Alan McQuaid, of Bloxham Stockbrokers, said: "Overall, these latest Exchequer figures are somewhat disappointing, particularly in relation to the tax side."
He blamed "underlying weakness in domestic demand and the general slowdown in the world economy" for the figures.
While VAT has underperformed fairly consistently since the start of the year, officials are bound to be a little disappointed with income tax which came in 1.2pc below target. Income tax and VAT make up the vast bulk of the taxes collected by the State.
The figures for November, which will be released days before next month's Budget, will now determine whether the Government hits the targets set out in last year's Budget. Many companies and self-employed people file tax returns in late October and November which can have an important effect on the State's coffers.
On the spending side, total expenditure came in 2.5pc less than forecast at €37bn. Spending on things like wages and social welfare (which accounts for the vast bulk of all Government spending) fell 1.6pc while that on buildings and other capital projects slid 12.6pc.
Every government department bar Justice has kept spending below the targets laid out at the beginning of the year.
While income tax came in below forecast, employees are still paying far more tax than they did last year thanks to the introduction of the universal social charge -- a type of income tax introduced in the last Budget.
Total tax revenues at the end of October were almost €2bn, or 8pc, higher than in the same period last year. Income tax was almost 22pc higher due to the new charge.