DUBLIN: Ireland is on track to meet its year-end budget deficit forecast of 0.9% of gross domestic product, a finance ministry official said on Tuesday.
Ireland collected 1.5% more tax than expected in the first nine months of the year and finance ministry official John Palmer told journalists the exchequer performance indicated the country would meet the deficit forecast.
Palmer also said that better than expected VAT returns for September indicated that there had been no fall in retail sales due to possible increases in shoppers travelling to Northern Ireland to take advantage of a fall in the value of sterling.
Ireland collected 1.5% more tax than expected in the first nine months of the year as continued outperformance in corporate tax receipts helped offset slower than forecast growth in some parts of the domestic economy.
The government has said it expects its year-end tax take to be 2% higher than forecast following a strong start to the year but the outperformance has waned each month since May when it took in 4.3% more tax than expected.
Corporate tax receipts from the large cluster of mainly foreign firms, which accounted for most of last year’s tax surplus, were 644 million euros or 18% above target as of the end of September, the finance ministry said.
That was more than the total 484 million euro outperformance as income tax and VAT, the two largest tax categories, came in 0.9% and 2.7% below expectations. Still, both categories showed strong year-on-year growth and overall, tax revenues were almost 6% higher than a year ago as the economic recovery continued.
Ireland had a fiscal deficit of 25 million euros over the first nine months after government spending came in 1.5% lower than expected. The government expects its deficit to fall below 1% of gross domestic product by the end of 2016.
