Exchequer deficit at €14 billion in 2012

Friday 04 January 2013 14.11
Corporation tax, VAT, stamp duties, capital gains tax and customs were all ahead of profile in 2012
Corporation tax, VAT, stamp duties, capital gains tax and customs were all ahead of profile in 2012

New figures show that the Exchequer deficit at the end of last year was €14 billion, which is €10 billion lower than at the end of 2011.

Tax revenue was up €2.6 billion on the year before to €36 billion, while non-tax revenue was €45m higher.

The Department of Public Expenditure and Reform figures show that spending in Health and Social Protection resulted in aggregate overspends, but this was offset by underspends in other areas.

The Minister for Public Expenditure and Reform, Brendan Howlin, said the Government is still committed to reducing the deficit in the coming years.

Overall, the figures were better than the Government expected.

A strong increase in the amount of tax paid in December left the Government €270m ahead of target for the year, instead of €210m behind, as feared. 

The increase was mainly from two multinational companies and some late payments by self-employed people.

That tax gain, a better than expected result from selling off the old analogue TV signal to mobile phone companies, and some spending control means a significant improvement in the budget deficit.

So if the deficit for 2012 comes in below 8%, and the target for this year is 7.5%, then the Government should reach that target.

The figures mask continuing concerns about the heath of the domestic economy.

Any help for small business and the self-employed could improve the outcome for 2013 and beyond, as would some relief on the Promissory Note payments.

On the tax side - corporation tax, VAT, stamp duties, capital gains tax and customs were all ahead of profile in 2012, according to the figures.

Income tax, excise duties and capital acquisitions tax were below target for the year.

Spending at the Department of Social Protection was 4.2% higher than forecast, at €13.9 billion for the year.

The Department of Health overspent by 2.2%, at €12.4 billion.