Tax take ahead of target but VAT below
The State took in over a half a billion euro more in tax than targeted for the first four months of the year, but VAT receipts are weaker than expected.
Some €12.86bn in tax was collected up to the end of April, 4.2pc or €518m more than forecast, according to the latest Exchequer returns.
But the tax take for April was below expectations by €27m, or 1.1pc.
The amount of money collected through VAT, which is a gauge of consumer confidence, for the year to the end of April is less than forecast.
For the first four months of the year, €4.03bn was collected in VAT, around €43m less than expected.
However, compared to the same period last year, VAT receipts were up €377m, or 10.3pc. VAT receipts for last month were also down 22.2pc, but the Department of Finance said this was due to the fact that April was not a VAT month.
Income tax receipts were down 5.2pc last month, or €83m. The Department said this was wholly due to weaker DIRT receipts on the back of lower interest rates.
However, monthly figures can be prone to volatility, and for the year-to-date, income tax receipts are 0.9pc, or €53m, above profile.
Net spending, for the first four months of the year, totalled €13.7bn. This was around €218m below profile, but €65m higher in year-on-year terms.
The exchequer deficit at the end of April stood at €2.32bn, compared to a deficit of €4.75bn at the same time last year.
Davy Stockbrokers said it still expects the deficit to come in below 2pc of the value of the economy this year - well ahead of the target laid down by Europe.
Chambers Ireland said the data showed the need for caution.
"While overall tax take for the year thus far is ahead of expectations, the month of April was behind profile," said Mark O'Mahoney, communications director.
"This demonstrates the ongoing fragility of our economic recovery and reaffirms the need for Government to be prudent with October's budget."
Peter Vale, tax partner at Grant Thornton, struck a more upbeat tone, saying the figures showed the trend of robust tax receipts were continuing.
"Coming so soon after the positive Spring Statement by the Minister, the figures further increase the likelihood of significant tax cuts in October," Mr Vale said.