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VAT take soars as extra €3.5bn in tax brought in last year

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Finance Minister Michael Noonan said that he welcomed the IMF’s statement

Finance Minister Michael Noonan said that he welcomed the IMF’s statement

Finance Minister Michael Noonan said that he welcomed the IMF’s statement

THE tax take last year was €3.5bn larger than in 2013, the latest Exchequer Returns show.

Reflecting the recovery in the economy, €41.2bn was collected in tax during 2014 – beating  the targeted figure of €40.04bn.

VAT receipts were €413m, or 3.8pc, better than forecast, signalling improving domestic demand and consumer sentiment, according to Exchequer Returns for December released this afternoon.

Last month, VAT receipts were €100m, or 43.6pc, above target at €331m, although the Department of Finance said December was a ‘non due’ month, signalling it had lower expectations of what would be filed.

Income tax for the year was 0.7pc better than targeted at €17.16bn.

On a monthly basis, the tax take in December was €114m bigger than targeted, or 3.8pc, at €3.13bn.

The deficit at the end of December had narrowed to €8.18bn, down from €11.5bn in the same period last year.

This is €1.4bn better than what was expected when Budget 2014 was delivered in October of last year, thanks to increases in tax and non tax revenue.

Public spending, at €42.2bn, is 2pc higher than targeted.

Current spending at €39.02bn is €638m higher than expected, driven by overspends in Health of €649m.

Capital spending was up €137m year-on-year and €204m above target.

Finance Minister Michael Noonan said the numbers show an underlying improvement in the Irish economy.

"Overall, the Exchequer returns show that the tax base continues to grow in line with targets and provides a solid foundation going into 2015.

"Budget 2015 is designed to support this recovery and I would expect that this strong exchequer performance will continue into 2015."

A breakdown of the Exchequer figures showed increases in income tax and VAT of 9% and 8% respectively compared to the take for 2013.

Mr Noonan said this was a direct result of more people being at work and more money being spent.

Brendan Howlin, Minister for Public Expenditure and Reform, said spending was being managed in line with targets.

"On foot of the better than expected tax revenues, Government agreed to provide some additional funding to support the continued delivery of health services," he said.

"Around 100m euro extra was spent on capital projects around the country, such as the storm damage repairs arising from the severe storms earlier in the year."

Analysis of the tax take showed income tax, including the universal social charges, was up 8.9% on 2013 figures to 17.1 billion euro while VAT was up 7.9% to 11.1 billion euro.

Corporation tax was up 8.1% to 4.6 billion euro while excise duties were up 2% to 4.9 billion euro.

Stamps were up a massive 25.9% to 1.7 billion euro for the year, in part thanks to the revival of the property markets in some areas and alongside that boost 491m euro was collected in local property tax.

The message from the two ministers as the figures were published was that the country's public finances are under control.

In a joint statement, they said: "Overall, the Exchequer performance in 2014 is real evidence of recovery, and job creation throughout the year.

"Stable public finances are an absolute necessity for a growing economy and job creation. As we move into 2015 people will begin to see the increases in their pay cheques due to measures announced in the recent budget.

"The priority now is to continue to get more people back to broaden and strengthen the recovery in 2015."

Online Editors