Irish Tax Receipts Continue To Deteriorate

by Jason Gorringe, Tax-News.com, London

08 October 2009

Irish tax receipts continue to wane despite evidence that the economic crisis is subsiding, according to new figures released by the government.

Irish Minister for Finance, Brian Lenihan announced on October 2 that at the end September the Exchequer deficit had further drifted out to EUR20.2bn, from EUR9.4bn at end-September last year, with the Irish tax-take deteriorating below expectations.

Tax revenue, at EUR23.7bn was EUR965m or 3.9% behind profile, and is down 16.8% year-on-year. Total net voted expenditure at EUR34.7bn was EUR514m or 1.5% less than expected. Non-tax revenue in the nine months to the end of September was EUR659m, growing from EUR603m recorded at September 2008.

Commenting Lenihan said:

“The end-September Exchequer returns published today show the stabilisation measures the government has introduced so far are working.”

“Total net voted expenditure is slightly less than anticipated for this stage of the year, demonstrating the government’s effective management of public spending. Furthermore, given the easing in the rate of increase in unemployment, which has been stable for the last two months, it is expected that some savings will be achieved on the sums allocated for the Live Register. This will improve the underlying position. While there are pressures emerging in other areas, Departments are expected to manage within their overall allocations.”

“The likely taxation shortfall will be in the region of EUR2bn for the year with income tax and VAT continuing to be weak.”

“The economic and financial conditions globally are showing signs of improvement. The recent success of our two main banks in raising funds without the use of the State Guarantee is evidence of the improved conditions and positive international sentiment towards the government’s plan to deal with the crisis in the Irish financial system."

“The consensus of economic forecasters is that the outlook for the Irish economy is now better than it was at budget time. If we, the government, continue to take the correct action, we will see economic growth in the second half of 2010.”

Recommended