Exchequer figures for the first five months of the year show the Government is running a deficit of €10.6bn.
While tax returns are sharply down on last year, the returns in May were broadly in line with the Government's forecast in the Emergency Budget.
The extent of the slowdown in the economy can be seen clearly in today's exchequer figures.
Overall, taxes are down 21% on an annual basis.
Stamp duty and capital gains taxes are down over 63.5 and 68.6% respectively, reflecting the collapse in the property market.
VAT and excise rates are also down sharply, reflecting reduced spending in the economy, although excise duties came in better than the Government forecast.
Overall, the tax take is broadly in line with what the Government forecast in the Emergency Budget.
On the spending side, Government Departments have also kept their spending broadly in line, although spending is up 2.9% on an annual basis.
The Budget deficit stood at €10.6bn at the end of May.
Earlier, Taoiseach Brian Cowen said he is optimistic about the country's economic future.
Speaking in NUI Maynooth, Mr Cowen said the Government was determined to keep people at work and create new jobs in the IT area.
He said it is encouraging that we are expecting today's tax returns to come in on target.
In a speech delivered to IT specialists and academics, the Taoiseach said there are hopeful signs nationally that this recession is bottoming out.
Mr Cowen did not stop to speak to reporters as he left the function.
