The latest Exchequer figures show that by the end of March the Government was running €600m behind target on its revenue.
In the first three months of 2008 the Government recorded a deficit of just over €354m. This compares with a surplus of €1.8 billion in the first three months of last year.
According to the figures published this afternoon, the Government spent €66m, or 0.6%, less than expected.
On the receipts side, the capital gains tax take was close to 40% lower than in the same period of last year, at €546m. Stamp duties were 43% lower at €529m. This reflects adverse conditions in equity and property markets.
The corporation tax take was 11% lower at €819m. Meanwhile the VAT take was flat at €4.5 billion and income tax rose by 5% to €3.1 billion.
Total tax revenues came in at €11.1 billion for the first three months of the year.
Finance Minister Brian Cowen said that international risks identified at budget time have materialised, and in the light of increases in oil and currency movements, the 5% year-on-year increase in income tax is a welcome indicator of resilience in the Irish economy.
Minister Cowen said it is crucial that all government departments adhere to their agreed spending limits this year.
This is expected to exert considerable pressure on the Department of Health, where day-to-day spending is already €83m above target.
Reaction to Exchequer figures
Opposition leaders have criticised Brian Cowen for the poor figures released today, some blaming his mishandling of the construction industry for the fall in revenue – not the international economy.
Ulster Bank analysts said they expect to revise their forecast to a tax shortfall of at least €1.5 billion for the year.
Analyst Alan McQuaid at Bloxham said today’s tax figures are another clear indication that the Irish economy is in a significant readjustment phase. He said it is hard to see much improvement in the short term.
