Exchequer returns showing a boost to income taxes and VAT yesterday sparked claims that increased employment and earnings are starting to feed through to the wider economy.
The news comes ahead of official statistics due to be released today that are expected to show a further fall in unemployment last month.
The Department of Finance yesterday published monthly Exchequer figures showing that the total tax take in the 11 months to the end of November was €35.2 billion, 4.2 per cent ahead of the take during the same period in 2012. The total was also ahead of the €34.97 billion budget target.
The numbers also showed Revenue collected €2.35 billion in income tax in November alone, almost 8 per cent more than the €2.2 billion returned during the same month in 2012.
Income tax for the first 11 months of 2013 was up 4.4 per cent, at €14.5 billion, but the total was just short of the Government target of €14.55 billion.
VAT returns rose strongly, delivering €1.63 billion to Government coffers in November, up 9.5 per cent on last year.
Ahead of forecasts
Commenting on the figures, Peter Vale, tax partner at Grant Thornton pointed out income tax was 2.4 per cent ahead of forecasts. "Even more positively, strong earnings are now being reflected in people's spending behaviour, with VAT receipts ahead of target for the first time this year," he said. "We are finally seeing positive employment and earnings growth translating into increased activity in the domestic economy."
He added this should give retailers cause to hope that Christmas spending would be strong.
Ministers heard yesterday the CSO will publish figures today showing unemployment fell again in November. The office last week said the number of people at work grew 58,000 in the first nine months of the year to 1.89 million. Minister for Finance, Michael Noonan, said November was the single most important month for Exchequer returns.
“The strong performance set out in today’s figures is hard evidence that the recovery seen in the high frequency data is taking hold across the economy.”
Total revenues
Total revenues, tax and non- tax, for the 11-month period, were €51.5 billion, 8.3 per cent ahead of the same period last year, and 5 per cent up on the €49 billion budget target.
The Government spent €60.08 billion up to the end of November, 0.8 per cent less than in the same period in 2012, and 4.4 per cent less than its target of €62.85 billion.
