DUBLIN: Ireland collected 1.7 percent more tax than expected in the year to October, the finance ministry said on Wednesday, but it will likely need strong receipts in the last two months of the year to meet its annual budget deficit target.
The government has said it expects its year-end tax take to be 2 percent higher than forecast, allowing the annual budget deficit to fall to 0.9 percent from 2.3 percent last year. “We are still on track to achieve this target (of 48.1 billion euros in tax receipts).
However, it will require all tax (categories) to perform strongly in the last two months,” the ministry said in a statement. Expenditure was 2.3 percent less than planned at the end of October. But if the government misses its tax target it will probably also fall short of its budget deficit forecast of 0.9 percent of gross domestic product, said Dermot O’Leary, chief economist at Goodbody Stockbrokers.
“It’s still not certain that the (deficit) target will be received for sure, tax revenue will have to perform well,” O’Leary said. The October numbers, he said, showed a continued reliance on tax receipts from a few large multinationals.
Davy Stockbrokers said in a note that the government appeared to be on target to meet its deficit forecast, but tax receipts in November and December – when 40 percent and 25 percent of corporation and income taxes respectively are collected – would have to perform well.
The budget deficit at the end of October was 2.43 billion euros ($2.70 billion) compared to 2.18 billion euros a year ago.
