Irish Exchequer Returns for January, issued by the Department of Finance this afternoon, show that the deficit was €483m, down from €780m in the same month last year.
Tax revenues, at just over €3.1bn, were €57m or 1.9% up on the same period in 2010. Net expenditure, at just over €3.9bn, was €196m or 4.8% lower.
Tax revenues in January amounted to €3.13bn. This was €57m or 1.9% above the same month in 2010. Tax revenues fell 3.9% in 2010. The amount collected in January represents 9% of the annual target and is consistent with expectations.
A year-on-year decline of €65m in income tax was more than offset by combined year-on-year increases in VAT, corporation tax and excise duties of €58m, €31m and €21m respectively.
The Department said the forecast growth rate in tax revenues for the year as a whole is 9.9%. This is driven by two significant factors:
(i) The reclassification of health levy receipts, which up to now had been collected as a Departmental receipt paid directly to the Department of Health & Children, to form part of the new Universal Social Charge, to be collected as part of income tax, and
(ii) The large Budget day tax raising package, primarily on income tax, of €1.1bn.
These factors did not benefit tax revenues in January as the bulk of income tax receipts paid into the Exchequer in January relate to earnings and employment in December.
Total spending in January was €3.94bn, a €196m or 4.8% year-on-year decline.
Net current expenditure, at €3.72bn was €24m or 0.7% up on January 2010 due primarily to the reclassification of health levy receipts which increases net voted current expenditure. These receipts had previously been paid directly to the Department of Health & Children and had the effect of offsetting gross current expenditure.
Net capital expenditure was €214m in January, down €221m on the corresponding period in 2010. The Department said given the once-off nature of much of capital expenditure, year-on-year comparisons are not particularly relevant so early in the year.
The cost to the Exchequer of servicing the national debt was €288m lower in January than in the same month last year. However, the majority of the expenditure used to service the national debt in the early months of 2011 is being funded from the Capital Services Redemption Account (CSRA) rather than the Exchequer. It was signalled at Budget time that €600m in debt servicing expenditure in 2011 would be funded from the CSRA.
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