New figures from the Department of Finance show that tax revenues for the seven months to July are up 3.5% on the same time last year and 0.3% ahead of expectations.

Exchequer figures from the Department show that total tax revenues rose by €719m year on year to just over €21 billion.

Today's figures show a deficit of €5.167 billion up to the end of July. This compares to a deficit of over €9 billion the same time last year.

The figures were boosted by €1.3 billion from the sale of Irish Life, while €52m was received in Local Property tax payments during the month. This brings the total collected in property tax so far this year to €179m.

Breaking down the figures, they show that income tax fell 5% short of Government targets on a monthly basis.

But the Finance Department said that overall, income tax receipts remain broadly in line with its targets with €8.59 billion collected in the first seven months of the year compared to an expected €8.677 billion. The Department pointed out that ''encouragingly'' PAYE and self-employed tax receipts are broadly in line with expectations, which it said is consistent with recent jobs figures.

Corporation tax receipts were over 13% behind target, while excise duties came in 8.2% lower than expectations and VAT receipts showed a shortfall of 1.6% as consumer spending remains weak.

However, capital gains tax and stamp duties came in ahead of Government targets.

Overall, tax revenues in July were 2.7% lower than expected on a monthly basis.

The figures show that non-tax revenue is down 5.9% at 2.215 billion, due mainly to lower Government guarantee scheme fees as the scheme ended in March.

Spending by the various government departments are at or under profile, and net voted expenditure by the Government came in 2.6% lower than expectations for the seven month period.

But the Finance Department said the cost of servicing the national debt - at €5.178 billion - to the end of July was 13.4% higher than the same time last year.

Commenting on the figures, Davy economist Conall MacCoille said they show that the Government is still on track to beat its 7.4% of GDP deficit target.

''Tax revenues remain ahead of schedule in the year to July. Discipline is being maintained on the expenditure side, with all the main spending departments close to their budget targets,'' he added.

Investec economist Philip O'Sullivan said that today's figures show that the public finances should come in slightly ahead of target for the year.

''However we would caution against using this to justify any divergence from the planned fiscal consolidation come October's Budget, given the still large gap between day-to-day revenues and expenditure and the further heavy lifting required to get the deficit to the target of below 3.0% of GDP by 2015,'' he added.

Peter Vale, a tax partner at Grant Thornton, said the one lingering concern from today's Exchequer returns is the weaker than expected VAT receipts. He said this reflects nervousness among consumers to spend, while excise receipts are also down.

''It will be interesting to see if an increase in confidence in the property market flows through to an increase in consumer confidence generally and releases some much needed spending into the domestic economy,'' he added.