Revenue €500m ahead of target due to buoyant corporation tax
THE tax take is running ahead of government targets, with almost €500m more revenue collected than expected at this stage of the year, according to the latest Exchequer figures.
Buoyant corporation tax returns were the main reason for the trend in November, with companies which export recovering strongly despite the problems in the domestic economy.
Most self-employed people file their tax returns for November and there was concern before the release of the figures that the take could be down severely, but this did not happen and economists said the returns were reasonably healthy.
Corporation tax is €589m ahead of government forecasts at this stage, leaving the tax take overall 1.6pc ahead of government projections.
Peter Vale, tax partner with Grant Thornton, said corporate tax performance was significant.
"A substantial portion of the November corporation tax receipts is advance payments by companies in respect of their expected 2010 profits.
"The figures suggest that companies are performing far better in 2010 than expected,'' he said.
Despite the health of firms, tax returns from individuals remain sluggish with income tax down 3.3pc on the Government's forecast at €10.3bn, almost €360m below targets.
VAT, to the surprise of some analysts, remained relatively stable when measured against the government target.
In November, VAT returns came to €9.8bn, marginally ahead of target, while stamp duty was also stable at €855m, although this is down hugely on its returns during the boom.
The vital tax take for November is the final piece of the Government's budgetary jigsaw.
The Cabinet met last night to finalise the details of the Budget, which Finance Minister Brian Lenihan will announce on Tuesday afternoon.
Last night Fine Gael said the Exchequer returns exposed a deep divide in Irish society.
The party's finance spokesman Michael Noonan said the multinational sector and large firms were enjoying a moderate resurgence.
"But large numbers of Irish families have been stranded on the other side of this divide. The income-tax take revealed in the latest Exchequer figures has again come in under target, with a shortfall of 3.3pc for the month," he said.
The Labour Party said the Exchequer figures showed the difficulty of meeting repayments agreed with the IMF and EU.
The party's finance spokeswoman Joan Burton said that after three years of haemorrhaging tax revenues, there is now some evidence from the figures that revenue has stabilised, "albeit at a far lower level".