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Irish Tax Take Lacklustre In Q1

by Amanda Banks,

09 April 2010

Announcing statistics on the tax-take for the first quarter of 2010, Irish Finance Minister, Brian Lenihan was hopeful for an Irish recovery in the latter part of the year, despite tax receipts being 3.5% below budget assumptions at EUR7.2bn and 15% lower than during the same period last year.

Lenihan said on April 2 that he expects the budget target of EUR31bn in tax receipts for the year to still be achieved - 6% lower than last year - and is optimistic that an economic recovery in the latter half of 2010 will boost the tax take.

In the first quarter of 2010 an Exchequer deficit of EUR3.95bn was recorded, up from EUR3.72bn in the first three months of 2009, “broadly in line with expectations,” Lenihan said.

Commenting on the figures, Lenihan said:

“The Exchequer deficit at end-March 2010 is generally in line with expectations for this point of the year. At end-March [tax revenues are] below what was collected in the first quarter of 2009. However, a substantial year-on-year decline had been anticipated in the early stages of 2010 and for the year as a whole.”

“The Budget day forecast of EUR31bn, which represents a 6 per cent year-on-year decline, is still a valid target. Tax and expenditure performance to date are broadly in line with my Budget plan [so] I have no reason to change my outlook.”

“The widely held view is that the economy will return to growth in the second half of the year and this should improve tax performance. In overall terms it is clear that the budgetary policy decisions taken by the government in recent months are having the intended impact on the public finances and will aid in the restoration of much needed confidence in Ireland.”

Lenihan concluded

“In terms of international confidence, this is most clearly seen in the cost that Ireland has to pay to borrow – the premium, or spread, over Germany which Ireland pays on its bonds is now about half the rate it was this time last year.".

TAGS: tax | economics | Ireland | fiscal policy | revenue statistics

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