Figures from the Department of Finance show that the public finances deteriorated further in July.
Tax receipts are now €2.2bn short of what had been expected at Budget time.
The Exchequer deficit was €6.7bn. The total tax take was €22.7bn, compared with the €24.9bn estimated by the Government at the start of the year.
Following the half-year figures last month, the Government said it expected tax receipts to fall short by €3bn for the full-year.
A breakdown of the July figures shows that VAT receipts are running more than €1bn behind target, while stamp duties are around €300m lower and capital gains taxes are around €350m worse than expected.
Ulster Bank economist Pat McArdle described the VAT shortfall as 'breath-taking'. He said he now expected a €4.5bn shortfall in tax receipts for the full year, adding that this meant the Government's announced spending curbs may not be enough to prevent the Government deficit breaching the EU limit of 3% of GDP.
'It is unlikely that additional spending cuts can be implemented in the short term. However, the pressure to achieve cuts much greater than the announced €1b in 2009 will now intensify,' the economist says.
Stockbroker Davy said it was sticking to its forecast of a €4bn tax shortfall this year. 'Ireland may not breach the 3% deficit limit this year, but it will be very tight,' Davy said.
