Friday 20 October 2017

Tax take down a 'puzzling' €344m despite fall in unemployment

Exit taxes on life assurance policies coming in below target and lower-than-expected DIRT receipts were also blamed. (Stock picture)
Exit taxes on life assurance policies coming in below target and lower-than-expected DIRT receipts were also blamed. (Stock picture)
Colm Kelpie

Colm Kelpie

Tax receipts for the first four months of the year are €344m below profile, dragged down in part for the second month in a row by lower-than-expected income and corporation tax receipts.

The Department of Finance last month blamed a "puzzling" below-par performance in Universal Social Charge (USC) returns for the lower-than-expected income tax receipts.

The performance appears to run counter to data showing a fall in unemployment. The Department of Finance said USC receipts were slightly behind target, and that officials were working with the Revenue Commissioners to get to the bottom of it. Income tax receipts to the end of April totalled €6.18bn, down €198m, or 3.1pc, against target.

Exit taxes on life assurance policies coming in below target and lower-than-expected DIRT receipts were also blamed.

Corporation tax receipts, at €587m, are a massive €223m, or 27.6pc, below expectations. The department said April was not a key month for corporation tax receipts, which it said can be "lumpy". It said the key months are May, June and November, which account for more than 60pc of the receipts. VAT is €257m above target at €4.77bn, while excise, at €1.7bn, is 6.3pc below target. Overall, the tax take for the first four months of the year totalled €14.1bn, down 2.4pc, against profile. The tax take is just fractionally above where it was in April last year.

Separate figures show employment by US companies here reached almost 116,000 in 2015, a sharp rise of 4,000 compared with the previous year.

By contrast, the number working for UK firms has been falling since 2013, according to the study of multinational investment here. The agency carried out the analysis following the dramatic 26pc surge in Irish economic growth in 2015, due to the accounting activities of the multinational sector rather than any dramatic increase in activity in the economy.

Irish Independent

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