Tax take is €1.1bn ahead of target on back of rising employment and growth in VAT receipts

Tax returns this year are running almost €1.1 billion ahead of target after a surge in revenues last month, new figures show.

While health expenditure was €323 million ahead of target in the first ten months of the year, the Department of Finance said the overspend "is partially offset" by underspending in most other departments.

Exchequer returns for October show the Government collected €3.1 billion in tax, €389 million or 14.3 per cent more than targeted for the month at the beginning of the year.

Some €220 million reflected revenues received in October which were delayed from the September pension fund levy. Other tax revenues in October were up €169 million or 6.2 per cent, with VAT, corporation tax, excise and stamp duties each ahead of target.

Income tax and local property tax returns were below target last month, however. Receipts in the year to date from property tax stand at €409 million, 5.2 per cent under profile.

Income tax receipts in October stood at €1.36 billion, €84 million or 5.8 per cent below profile. “The primary reasons for this shortfall was weak DIRT receipts. However, it should be noted that underlying income tax performance has been strong,” said the Department of Finance.

The Government has collected a total of €13.13 billion in income tax since the start of the year, €52 million above target, reflecting rising employment.

Consumer confidence

Similarly, VAT receipts of €9.32 billion since the start of the year are €344 million or 3.8 per cent ahead of target.

“This is reflective of improved consumer confidence [for the year] as evidenced in recent retail sale figures,” said the Department.

Corporation tax receipts for the year to date were €2.95 billion, €225 million above profile. Excise duties were €4.06 billion, €234 million above profile. Cumulative stamp duties, at €1.5 billion are €196 million ahead of profile.

The figures, released yesterday, show that total tax revenue since the start of the year was €31.98 billion, €1.09 billion or 3.5 per cent ahead of profile.

The exchequer deficit at the end of October 2014 was €8.51 billion compared to €10.52 billion in 2013. The figure represents a €1.76 billion improvement on the official target, thanks to rising tax receipts, an increase in Central Bank surplus income and reduced interest expenditure.

Non-tax revenues of €2.29 billion were down €106 million, mainly due to lower bank guarantee fees. “This reduction is somewhat offset by increased dividends and Central Bank surplus income,” said the Department.

Gross voted expenditure of €44.23 billion in the first 10 months of the year was €416 million or 0.9 per cent above profile. Net voted current expenditure is €32.94 billion, 0.6 per cent or €207 million above profile, with health overspending the main reason. Net voted current expenditure in the first 10 months of 2014 is €518 million lower than in the same period in 2013.

Net voted capital expenditure to the end of October amounted to €1.86 billion, up €11 million year-on-year and €124 million below profile.