Tax take from big two falls short

Monday 04 April 2011 16.57
Exchequer figures - €7 billion deficit in first quarter
Exchequer figures - €7 billion deficit in first quarter

Figures from the Department of Finance show that the gap between government borrowing and spending in the first three months of this year was just over €7 billion, up from €3.9 billion in the same period last year.

The Exchequer deficit was swollen by €3 billion paid to Anglo Irish and Irish Nationwide, the first portion of the money committed to the two institutions last year.

Tax receipts in the period were €7.5 billion, €136m or 1.8% below the Government's target. This was mainly due to weakness in income tax and VAT. The income tax take - including the universal social charge - was €125m short of target, while VAT was €179m below expectations.

But corporation tax was €78m or 56% ahead of expectations, while excise duties were €60m or 6.4% ahead.

Finance Minister Michael Noonan said the tax shortfall was not significant overall, but he expressed concern about the performance of income tax and VAT, saying they would need to be closely watched in the coming months.

Compared with the same period last year, the tax take was up 3.7%. VAT receipts are 3.3% below last year, though income tax is almost 10% ahead due to the inclusion of the universal social charge.

Total spending was €10.9 billion, €255m below target. Current spending is slightly below projections, but capital spending is more than 11% short.

The total cost of servicing the country's debt in the first quarter was just over €1.4 billion, up €663m from the same period last year.