Exchequer Returns: Budget deficit improved by almost €1bn but surprise drop in income tax
The Budget deficit improved by close to €1bn in the period to the end of August compared to last year but August saw a surprise drop in income tax.
The end of August saw the Exchequer record a deficit of €329m, compared to a €1.291bn over spend in the same period last year, according to the Department of Finance.
The improvement was driven primarily by a hike in the tax take, including higher than expected corporation tax receipts, and came despite higher spending.
The latest figures show tax revenue of €29bn was collected in the first eight months of the year. That is up €1.7bn on the same period last year.
However, tax revenues for the month of August were down €196m, primarily due to an under-performance in Income tax and Excise duties. The close to €50m decline in income tax paid during the month are a surprise, because there was no drop in the number of people at work.
The drop in Excise receipts was expected. It reflects front loading early in the year of tobacco purchases ahead of a new packaging rules.