Tax revenue up as consumer spending boosts VAT receipts
TAX revenues have continued to improve, keeping the public finances in line with expectations, new figures show.
The Government took in €3.1bn in January, with VAT receipts in particular coming in stronger than many economists expected.
There were fears the snow of December and early January would hurt consumer spending, but VAT receipts were up 3.6pc.
Overall tax receipts for January are 1.9pc ahead of this time last year and are in line with expectations, said the Department of Finance.
Income tax however, continued to drag the numbers down, coming in 6.2pc below the amount collected last year.
Tax increases in the Budget are not showing yet.
Corporation tax, as expected, continues to be the fastest growing tax head, rising by 77pc in January, although few companies actually make their tax return this early in the year.
Excise was also ahead by 8.2pc, bringing in €281m.
The exchequer deficit to the end of January stood at €483m, compared with €780m in the same period last year. Spending at €3.9bn was €196m, or 4.8pc, lower.
The January tax returns make up 9pc of the year target.
The Government is hoping to increase the tax take this year by 9.9pc. This will be made easier by the recent tax increases which amounted to €1.1bn.
The department also revealed yesterday that the State will have to repay up to €5bn in debt interest this year, which is measured against €34.9bn of tax revenue likely to come in.
It is understood the Government has drawn down its first tranche of IMF/EU funding. However, drawing down further tranches will depend on meeting certain "milestones'' set by the EU and IMF.
One of these relates to putting fresh cash into the banks after they are restructured.
Reacting to the figures last night, Bloxham stockbrokers chief economist Alan McQuaid said there were still dangers for the public finances.
He said it was not clear that exports, which are growing, will be enough to offset the loss of tax coming from cautious consumers. He warned that further austerity could not be ruled out at this stage.