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Exchequer

Tax intake €2 billion higher than last year but still behind target

New figures from the Exchequer also show its deficit has blown up to €22.2 billion due to payments made to recapitalise Irish banks.

THE EXCHEQUER HAS taken in €26.7 billion in taxes during the first ten months of 2011, marking an 8 per cent (or €2 billion) increase on the same period last year.

The jump, although not as high as last month’s 25 per cent increase, is due mainly to the introduction of the universal social charge.

However, tax revenues are still €184 million, or 0.7 per cent, below target. This shows a dis-improvement on end-September figures, when the tax intake was 0.7 per cent ahead of expectations.

The Exchequer said it was expecting the shortfall because of the early payment of income taxes in April and July.

According to the figures published today, stamp duties recorded a 52 per cent year-on-year increase because of receipts from the Jobs Initiative pension levy.

Excise duties are also up marginally but VAT and corporation tax received fell in the year to end-October.

This is the fifth consecutive monthly fall in the VAT take, reflecting weak domestic demand. The category is now showing a shortfall of €383 million.

Corporation tax is about €109 million short of its target. November is the key month of the year for such receipts so the next figures published by the Exchequer will be the real indicator for the end-of-year outturn.

Expenditure

If capital and current spending is taken into account, expenditure was down 0.5 per cent or €176 million at the end-October.

There were significant “underspends” noted at the departments of Education & Skills, Agriculture and Social Protection. However, there were “overspends” in the Health and Justice departments.

The Exchequer deficit has blown up from €14.4 billion in the first ten months of 2010 to €22.2 billion in the corresponding period this year.

The €7.8 billion increase is mainly due to promissory note payments to Anglo Irish Bank, Irish Nationwide Building Society and EBS, as well as other payments relating to the July recapitalisation of the banking sector.

Between January and October, Ireland has spent €4.2 billion servicing its debt.

The Exchequer said excluding the amounts used to restructure the country’s banks showed a fall in the deficit by more than €1.8 billion.

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