DUBLIN: Ireland income tax rose 12 percent in January from a year ago and spending fell 5 percent to swing the state’s finances into a rare surplus, a further sign economic recovery is gaining momentum.
A sharp rebound would meant Ireland’s economy probably grew faster than any other in the European Union in 2014. The Irish central bank raised its economic growth forecast for 2015 on Tuesday, citing stronger consumer and investment spending.
That recovery has boosted tax revenue — data on Tuesday showed that 34 percent more tax was collected than a year ago. The finance ministry said the increase was more like 12.3 percent, or 460 million euros ($525 million), once a technical delay in tax receipts a year ago was taken into account.
Surging tax revenue has allowed the government to cut the rate of income tax for the first time in seven years. It wants to do so again next year while also bringing its budget deficit below 3 percent of gross domestic product (this year.
“We were giving income tax relief in January and yet income tax receipts went up by 4 percent … this is a very strong set of figures,” Finance Minister Michael Noonan told Ireland’s TV3.
