The exchequer collected just more than €8.1 billion in taxes in the first two months of the year, an increase of €293 million or 3.7 per cent on the same period in 2018.
Figures published by the Department of Finance on Monday show that the exchequer had a surplus of €138.6 million at the end of February, down 36 per cent on the €217 million recorded at the end of the same month last year.
Total taxes collected in January and February came to €8.106 billion, 3.7 per cent more than the €7.8 billion collected during the first two months of 2018. The department said the total was €50 million below the target set in the budget.
Workers contributed most, paying €3.47 billion in income tax, up from €3.33 billion during the same period last year. VAT receipts rose to €2.9 billion from €2.77 billion. February is not a big month for VAT receipts.
Excise duty – charged on fuel, alcohol and tobacco – was the third biggest contributor to State coffers at €854.5 million, slightly down on the €857 million collected from this source in the opening months of 2017.
Government's non-tax revenues for the period were €1.359 billion. That figure included €225 million from the liquidators of Irish Bank Resolution Corporation (IBRC), the State institution which took over insolvent lenders Anglo Irish Bank and Irish Nationwide.
That payment was part of a €600 million dividend that Minister for Finance Paschal Donohoe confirmed last year the State was due to receive as an unsecured creditor of IBRC.
Budgeted amounts
Voted expenditure, the budgeted amounts spent by each government department, was €7.957 billion for the two months.
The Department of Health was the biggest spender, accounting for €2.72 billion of the total during the period. Current spending on health at €2.66 billion was €155 million or 6.2 higher than a year earlier.
The Department of Employment Affairs and Social Protection was the next biggest at €1.75 billion, which was in line with the same period in 2018.
Non-voted spending, which includes items such as interest repayments on the national debt and contributions to the EU budget, was €1.372 billion.
A near €850 million contribution to the EU accounted for the biggest share of government spending under this heading.
The cost of servicing the national debt declined by €53 million in the first two months of this year when compared with the same period in 2018.
The Department of Finance noted that non-voted expenditure was up 6.6 per cent or €85 million in the first two months of the year.
“The increase was driven by a greater EU contribution due to both Ireland’s increased share of EU obligations and the timing of funds called up by the [European] commission,” the department said.
Budget target
Conall MacCoille, chief economist with stockbroker Davy, noted that the returns showed current government spending up 7.6 per cent in the first two months of the year, but 0.6 per cent within “generous” limits set in the budget.
“Overall, the items that feed into Ireland’s general government balance are €131 million ahead of the budget target,” Mr MacCoille said.
Peter Vale, tax partner with accountants Grant Thornton, predicted that higher disposable incomes should feed through to VAT returns next month.
“However, a hard Brexit later this month would almost certainly depress tax figures significantly,” he warned.
“In such an event we might see no further reductions in income tax rates in the budget later this year, and, indeed, potential increases in other taxes, such as property taxes.”
