DUBLIN: Ireland collected 1.8 percent more tax than expected in the year to November, the Finance Ministry said on Friday, putting it closer to the target of cutting its budget deficit below one percent of GDP while funding extra spending. Ireland is relying on its year-end tax take being 2 percent higher than it had forecast at the beginning of the year to cut its budget deficit to 0.9 percent of gross domestic product from 2.3 percent last year.
After the outperformance waned in recent months, the Finance Ministry said a strong end to the year would be needed to meet that goal, particularly in November when 30 percent and 15 percent of corporation and income tax respectively is collected. Corporate tax, which mainly comes from Ireland’s cluster of multinational firms and has surged over the past two years, came in 8 percent ahead of target for the month and is 16 percent or almost 1 billion euros above expectations year to date.
Income tax closed the month 8.8 percent above profile, although some of the overall outperformance was offset by weaker than expected excise and VAT receipts. The ministry said the softer VAT returns were due to larger than expected repayments which it has previously put down to increased business investment as firms claim VAT back on the purchase of goods.
All the major tax categories were also significantly up year-on-year, suggesting momentum remains strong in the European Union’s fastest growing economy even as growth slows in some indicators like retail sales and consumers remain cautious. Expenditure was 2 percent less than planned by November but the department said that reflected timing issues that are expected to reverse this month after much of the surplus tax take was committed to fund extra spending earlier this year. The Exchequer recorded a surplus of 1.5 billion compared to one of 343 million a year ago in the 11 months to November, it said.
