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Varadkar announces unexpected €100m Budget surplus

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Leo Varadkar speaking to the media at Government buildings today

Leo Varadkar speaking to the media at Government buildings today

Leo Varadkar speaking to the media at Government buildings today

TAOISEACH Leo Varadkar has revealed that there was an unexpected Budget surplus of €100m last year.

It's the first Budget surplus since the economic crash, barring one year when there was a windfall from the sale of AIB shares.

The announcement came after finance minister Paschal Donohoe briefed Cabinet on the latest Exchequer Returns.

Mr Varadkar said the surplus came a year ahead of schedule.

He said it occurred for two reasons, firstly a €250m underspend.

He said this was "non-voted" expenditure and was not in any particular government Department and mainly related to debt service costs.

He said the second reason was "a very big increase in the amount of tax taken from corporations".

Mr Varadkar said corporation profit tax receiptes came in between €1bn and €2bn ahead of projection.

He maintained that the surplus: "means that we’re very well-prepared for a downturn or for an economic shock if that were to affect us, much more prepared than other countries."

He said the majority of European countries - including the United Kingdom - are still running deficits.

Mr Varadkar said the government expect a small Budget surplus for 2019 as well.

But he also warned: "It’s absolutely something we can’t take for granted or be complacent about.

"It largely happened because of a surge in Corporation Tax receipts and we’re not taking them for granted. We know they’re volatile.

"We know they relate to the profits of a small number of companies that have operations here in Ireland.

"So in our Budgetary plans for 2019 we’re actually projecting a fall-off in tax-take from corporations so that if they pay the same amount in 2019 as they did in 2018 it will be a pleasant surprise."

He argued that this shows "we’re planning ahead and being prudent".

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