Tax take to be €2bn behind target

Figures released by the Department of Finance figures show that the Exchequer deficit was €22.7bn in the first ten months of the year.

The figures also showed that just over €26bn in tax was taken in the period, just over €1bn below estimates made in the April Budget.

The figures were released as Minister for Finance Brian Lenihan told the Dáil that forecasts show the overall tax take this year is back at 2003 levels.

Minister Lenihan said total tax revenues were forecast to finish in the region of €32bn, compared with the €34.3bn forecast in April.

He also said the Government would have to borrow €22bn this year to fund services.

Asked by Labour's Joan Burton why the tax take would fall €2bn short of his predictions last April, the Minister said that due to wage reductions, half of all income earners were now out of the tax net.

He also said the percentage paying tax at the top rate is down from 21% to 10%.

The Minister also said that unemployment figures for the end of October would show that there was no increase in the Live Register, and he did not accept that unemployment would grow to 500,000.

The Exchequer deficit has been swollen by the €4bn paid to Anglo Irish Bank to save it from going under and the €1.7bn that has been put into the National Pension Reserves Fund.

Responding to the figures, Fine Gael leader Enda Kenny said he had warned the Government on successive occasions that it was not possible to tax its way back to prosperity.

Mr Kenny said it was difficult to accept projections from a Department that had produced a NAMA business plan that asked people to believe the monetary values for assets ten years down the line.

Taoiseach Brian Cowen said the December Budget would address the issue of expenditure.

Labour leader Eamon Gilmore said the country was 'hurtling headlong into a period of conflict, strife and division'.