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Figures show tax take E548m over target

Tuesday, August 05 17:24:12

Latest Exchequer figures for the seven months to the end of July show that tax revenues are running E548m ahead of target, leading to a deficit that is now E800m less than a year ago.

The Exchequer deficit stood at E5.18 billion at the end last month.

Total tax revenue collected to the end of July amounted to E22.37 billion, an increase of E1.45 billion, or 6.4pc, on the same period last year.

The total tax take was nearly E550 million, or 2.5pc, ahead of target.

Tax revenues for the month of July alone were E327 million above the monthly target, although that outcome was inflated by better corporation tax receipts, which should have been accounted for in June, but were delayed by the new SEPA payments procedure.

Corporation tax receipts for the seven months to July were down 1pc, or E21 million, compared to the same period last year, but are E69 million, or 3.4pc, above profile.

Income tax, VAT and excise duties are all ahead of target.

Stamp duties and local property tax receipts were in line with profile coming in at E438 million and E338 million respectively.

Overall spending in the first seven months came in at E24.17 billion, 0.7pc lower than the same period last year and 0.3pc below profile.

Analysts say that the figures will add to the call for a much smaller adjustment in this October's Budget or even no cuts and new taxes at all.

Peter Vale, tax partner at Grant Thornton comments on today's Exchequer Returns released by the Department of Finance: "The latest set of positive tax figures will give further support to those advocating little or no adjustment in October's budget. In particular, ongoing positive VAT numbers indicate that people are continuing to spend, reflecting much of the positive data we have seen in recent weeks and months. It's reasonable to expect that people moving out of negative equity has helped increase consumer confidence."

"Taxpayers are likely to see some respite in their annual tax bills in the budget, possibly through an increase in tax credits or a widening of the tax bands. While any such adjustment will still leave tax payers considerably worse off versus their position in 2007, a decrease in their monthly tax bill in the region of E50 per month could be expected. In the background, the debate around the future international tax landscape rumbles on. This is hugely significant for Ireland and we can expect a statement on our future tax strategy in October. This may be a commitment to continue our participation in the various global talks but could also potentially see a more radical adjustment to our corporate tax residence rules."

For more visit: www.businessworld.ie