THE IRISH EXCHEQUER recorded a surplus in the first month of 2013, in spite of a fall in overall revenue – thanks largely to the proceeds of a sale of capital notes in Bank of Ireland.
Figures published by the Department of Finance show an increase in tax revenues of almost €109 million, or just under 3 per cent, but non-tax income fluctuated significantly and ended up falling by €122 million when compared to the equivalent period last year.
Income tax receipts for January rose by €126.5 million, to €1.387 billion, while VAT income rose by just under 1 per cent to €1.74 billion. Meanwhile, excise duty rose by over 10 per cent to €318.7 million.
The figures are given an unfairly unhealthy complexion, however, by a major fluctuation drop in corporate tax returns in January 2013 when compared to January 2012. Only €18.6 million was received last month, compared to just under €271 million this time last year.
Last year’s corporation tax figure was artificially inflated by a delay in a large payment that was actually due in December 2011, however, and the likelihood is that these receipts will even out over the course of the year.
In non-tax income, there was a significant drop in fees paid by banks in exchange for cover under the State guarantee scheme, which dropped by just over a quarter to €210.4 million. Miscellaneous small payments fell from nearly €55 million to just €158,000.
Motoring fines absent
However, other payments increased significantly: minor receipts collected by Departments and other state bodies rose from €1.1 million to €4.8 million and fees from the property registration authority rose from €1.9 million to €2.9 million.
Unusually, the State collected no motoring fines in January 2013 – having picked up €420,000 in January 2012 – but in a manner similar to corporation tax, this will probably be made up in future months.
On the spending side, net ‘voted’ spending – governed directly by the Budget, as opposed to catered for in other Acts of the Oireachtas – rose by 4.1 per cent to €3.874 billion, which was attributed to the timing of public service and social welfare paydays.
Public servants are usually paid every fortnight, with money arriving in employee accounts on a Thursday. Quirks of the calendar meant there were three such paydays in January 2013, when last year’s only contained two.
In all, the Exchequer returned a surplus in January 2013, of €704 million. This is partially as a result of a €1.057 billion windfall from the sale of contingent capital notes in Bank of Ireland, and can also be attributed to a significant decrease in capital spending.
The cost of servicing the national debt was €568 million, down from €750 million in January 2012 due to what the Department of Finance described as “a combination of technical and timing factors”.
Peter Vale, a tax partner at accountancy firm Grant Thornton, said the increase in income tax receipts was a “big positive” and indicated stability in the labour market, but expressed concern at the VAT figures, which would reflect retail sales from November and December.
“VAT receipts were a mere 0.9 per cent ahead of last year, despite the increase in the VAT rate to 23 per cent from 21 per cent in the comparable period,” he said.
“This is perhaps explained by the relatively weak retail sales over the Christmas period reported last week.”