Irish Fiscal Position Improves In December

by Jason Gorringe, Tax-News.com, London

08 January 2010

Irish Finance Minister, Brian Lenihan, has released details of the Irish fiscal situation, showing that tax receipts for December came in ahead of forecasts, but are down 19% year-on-year.

At end-2009, an Exchequer deficit of EUR24.64bn (USD35bn approx) was recorded. Tax revenue, at EUR33bn was EUR1.357bn or 3.9% behind profile. Total net voted expenditure at EUR47.16bn was EUR221 million or 0.5% less than profiled.

Commenting on the returns Lenihan noted that the Exchequer Returns show that the overall deficit position for 2009 was better than expected in December’s Budget.

“This improvement in the 2009 position is largely due to a better than anticipated performance in tax revenue in the month of December. This is welcome news. That said, tax receipts at just over EUR33bn, were down EUR7.7bn or 19% on a year-on-year basis. The last time that receipts were at this level was 2003,” he explained.

“Throughout 2009, the government has maintained a tight control over public spending and this will continue given the reduced resources of the State,” he added.

Lenihan continued:

“Today’s figures also highlight the impact of our rising debt levels, as debt servicing costs have increased by over EUR1bn in 2009. This is clear evidence of the need to take action to achieve long term sustainability of the public finances.”

“I believe that the 2009 Exchequer Returns demonstrate that the action taken by the government in managing the public finances is working. Given the small improvement in the actual deficit over that anticipated in the December Budget we face into this year’s task with a greater sense of confidence."

"The challenges we face are great but the government is committed to the targets set out in the recent Budget. As I said, economic growth will return during the course of this year and this will assist in the ongoing improvement in the public finances.”

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