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Cowen Releases September 2007 Exchequer Return Figures

by Jason Gorringe, Tax-News.com, London

04 October 2007


Ireland's Tánaiste and Minister for Finance, Brian Cowen, on Tuesday released details of Exchequer returns at the end of September.

According to Mr Cowen, an Exchequer deficit of EUR3,100 million was recorded in the first nine months of 2007. This compares to an Exchequer deficit of EUR136 million in the first nine months of 2006, and a budgeted deficit of EUR546 million for 2007 as a whole.

The Current Account Balance at end-September showed a surplus of EUR1,530 million compared to a surplus of EUR2,335 million in the same period last year, and a budgeted surplus of EUR8,050 million for 2007 as a whole.

The Capital Account Balance at end-September showed a deficit of EUR4,630 million compared to a deficit of EUR2,471 million in the same period last year, and a budgeted deficit of EUR8,597 million for 2007 as a whole.

Commenting on the results, Cowen observed that:

“Income tax and corporation tax are performing well and when taken together with VAT and excise duty, the four main taxes, which were forecast to account for around 85 per cent of total taxes this year, are exactly on target."

"This points to a healthy economy as was portrayed by the recent strong CSO data for the first half of the year, which showed that GDP increased by 6.7% and employment rose by 3.9%."

He continued:

"Current expenditure is very much in line with expectations and strong growth in capital expenditure largely reflects the progress being made under the National Development Plan."

"However it is now expected that there will be some shortfall in overall tax revenues reflecting developments in some taxes such as stamp duty. While this will be somewhat compensated for by positive developments on other elements of the Exchequer account, an Exchequer deficit of up to EUR1 billion now seems likely."

"The Exchequer Returns for the first nine months of the year underline the need to continue to implement prudent, sensible fiscal policies while at the same time giving spending priority to those areas which enhance our productive potential.”

With regard to revenue, the figures published on Tuesday revealed that total current receipts in the first nine months of 2007 amounted to EUR31,898 million, compared to EUR30,098 million in the same period in 2006.

Tax revenue, at EUR31,462 million was EUR490 million below profile at end-September.

Year-on-year, tax receipts were up 6.1%. The best performers were corporation tax (+EUR296 million ahead of profile) and income tax (+EUR56 million). Capital gains tax, VAT, excise duty and stamp duty were all behind target, at -EUR107 million, -EUR132 million, -EUR225 million and -EUR401 million respectively.

Non-tax revenue in the first nine months of 2007 was EUR436 million. This compares to EUR439 million in the same period last year.

Capital receipts in the first nine months of 2007 amounted to EUR909 million, compared with EUR1,479 million in the same period last year. They were broadly in line with expectations.

Finally, with regard to expenditure, the Finance Minister revealed that total net voted spending was EUR31,962 million at end-September compared to EUR27,082 million in the same period last year, an increase of 18%. This was EUR274 million, or 0.9%, ahead of the published profile, and compared to the planned increase of 14.2% for the year as a whole provided for in the Revised Estimates.

The full text of the end-September Exchequer figures can be found in the Tax-News Resources section.

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