Ireland collected slightly less tax than expected in the first half of the year, but the shortfall narrowed sharply in June thanks to strong corporation tax receipts, the finance ministry said on Tuesday.

Ireland's tax collection was 0.5% below target in the year to the end of June up from a shortfall of 2.4% reported two months earlier, a level that had raised questions about the government's spending plans.

The improvement was mainly due to corporation tax, which was 12.5%, or 205 million euros, ahead of target in June, one of the most important months of the year for the tax.

Corporation tax and VAT were ahead of target in the first six months of the year while receipts from income tax and excise duties were below target.

Overall tax revenues were up 4% year-on-year by the end of June, improving from the increase of 0.5% reported at the end of April.

Ireland's economy has been the best performing in the European Union for the past three years, swelling the tax take in the process. The finance ministry has forecast that tax revenues will grow by 5.2% in 2017.

With expenditure 1.4% less than planned, the exchequer posted a 2.485 billion euro surplus at the end of June, compared with a deficit of 1.14 billion at the same point a year ago, the ministry said.

Ireland aims to cut its deficit to 0.4% of gross domestic product this year as it moves towards its first balanced budget in a decade. (Reuters)

Source: www.businessworld.ie