Saturday 21 July 2018

Tax take to end of February of €7.8bn slightly below target

(stock photo)
(stock photo)
Colm Kelpie

Colm Kelpie

The tax take to the end of February was fractionally below target thanks in part to lower than expected VAT receipts.

But the Department of Finance said this was due to higher VAT rebates to firms than expected last month. February is also a non-VAT month in terms of payments.

Corporation tax was also below target, but the Department again stressed that it is too early in the year to make any judgement.

Overall, €7.8bn in tax was brought in in the first two months of the year, €43m, or 0.5pc, below target.

Income tax, at €3.3bn, was 0.2pc above target. VAT, at €2.77bn, was €78m, or 2.8pc below target. Corporation tax receipts, at €213m, were €16m, or 7.1pc lower than expected.

Analysts aren’t concerned by the slighter weaker than expected tax take.

“While both VAT and corporation tax figures are now lagging behind last year, we wouldn’t read too much into these figures.,” said Peter Vale, tax partner at Grant Thornton.

“The early months of the year are not major months for corporation tax receipts.  After a strong January, there was some slippage in the VAT receipts for February, although again this is a quiet month for VAT receipts.”

David McNamara said the latest exchequer returns show the public finances broadly in line with Budget expectations year-to-date.

“Tax revenues are slightly behind profile but still up 4pc on the year, while spending discipline is being maintained across departments,” he said.

“While early in the year, the data suggest that the government is on track to hit its deficit target of 0.2pc of GDP in 2018.”

The Department said an Exchequer surplus of €217 million was recorded to the end of February.  This compares to a surplus of €587 million in the same period last year.

The reduction in the Exchequer balance was primarily due to an increase in current spending, which the Department said was somewhat offset by increased tax revenue.

Excise duties closed the month €6 million above target. On a cumulative basis, receipts of €857 million are now up 5.6pc or €46 million in annual terms.  

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