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Irish income tax take beats expectations again in July

Written by Business World, on 6th Aug 2020. Posted in Financial

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Ireland collected far more income tax than it expected to for the third straight month in July, helping to keep the year-on-year decline in the country's overall tax take so far in 2020 at 2.5%.

Ireland took in 1.6 billion euros compared with the 1 billion euros forecast, the finance ministry data showed on Wednesday.

State revenues have been expected to fall 16% this year due to the impact of the coronavirus, though the better than expected income tax take along with a surge in corporate tax meant they were little changed in the first six months.

Income tax was still down 8% year-on-year in July, however, reflecting the fact that parts of the economy remain closed due to the pandemic.

While monthly VAT returns came in 1.7% ahead of forecast at 1.6 billion euros, they were 30% lower than the same period a year ago. July is a relatively inconsequential month for company returns.

Ireland has taken a more cautious path out of lockdown than most of Europe. It delayed the fourth and final stage of its exit plan for a second time on Tuesday, keeping nightclubs and many pubs closed and promising them additional help.

The unprecedented level of stimulus so far pushed government spending up 29.5% year-on-year at the end of July, the data showed. Ireland expects to run a budget deficit of up to 30 billion euros or 10% of gross domestic product this year.

The deficit stood at 7.4 billion euros last month.

"While there continues to be unprecedented uncertainty in the outlook, the relatively strong performance of income tax remains a potentially encouraging indicator as the economy emerges from the most severe period of the pandemic impact," the ministry said in a statement. (Reuters)

Source: www.businessworld.ie

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