Irish Economy 2014: Income tax receipts were below target in April while total receipts were up 2% in the year to date.
The Irish Times has a more cheery headline for ministers in this election month: "Boost for exchequer as tax revenues up more than 5% - - Income tax, the biggest heading, rose by 7% to €5.4bn in four months to April."
Michael Noonan, finance minister, highlighted the comparison with the first four months of 2013 when Fine Gael launched its campaigns for the European Parliament and local elections, this week.
What is important about the 2014 target is that it was set in early October 2013 before Budget 2013, when Q2 2013 employment data was available, which showed that 33,800 jobs had been added in the year.
Last March the CSO reported that 61,000 jobs were added in 2013. However, it estimated that 'Agriculture, forestry and forestry' added 27,000 in 2013 and self employment (without employees) added 29,000 to return the total to boom time levels in 2007.
We know that in the real world that 27,000 jobs were not added in Agriculture etc in 2013.
If all these 61,000 jobs are actually real in terms of earnings, then the total tax receipts would be expected to be higher than 2% as this high job creation level was not in the October 2013 target.
An Exchequer deficit of €4.8bn was recorded to end-April 2014. This compares with a deficit of €6.1bn to end-April 2013.
The main drivers behind this year-on-year improvement in the Exchequer deficit are increased tax revenue, lower voted expenditure and "a significant reduction in bank guarantee payments associated with the liquidation of IBRC (former Anglo Irish Bank/Irish Nationwide)," according to the Department of Finance.
Total tax revenue of €11.56bn was collected at end-April, an increase of €612m (5.6%) on the same period last year. In addition, cumulative tax revenues are €222m (2.0%) ahead of target. April tax revenues of €2.32bn were €35m (-1.5%) behind the monthly target.
Income tax totalled €5.41bn to end-April, an increase of €362m (7.2%) year-on-year and up €106m (2.0%) on target which the Department said was "reflective of an improving labour market. However, in the month of April income tax receipts are €3m (-2.8%) behind the monthly target mainly as a result of lower than expected DIRT receipts."
VAT receipts for the year to date totalled €3.65bn, down €51m (-1.4%) on target and up €177m (5.1%) in year-on-year terms.
Corporation tax receipts of €297m to end-April are €125m (-29.6%) down year-on-year, but €8m (14.8%) above target. For the month of April corporation tax receipts of €1m are exactly on target.
Excise duties, at €1.494bn for the first four months of the year, are €88m (6.2%) up year-on-year - - reflecting a jump in new car sales - - and up €82m (5.8%) against target. However, in April excise receipts were €30m (-7.2%) behind the monthly target.
Stamp Duties were down €168m (-45.9%) year-on-year, to €98m and down €8m (-3.8%) on target. Excluding once off payments, mentioned in previous information notes, stamp duties are up €m (1.0%) compared to the same period last year.
Capital Gains Tax of €06m were up €9m (36.9%) year-on-year, which is €m (3.7%) above target.
Local Property Tax (LPT) receipts of €60m were collected to end-April, up €7m (7.2%) on target. In terms of April’s performance, LPT receipts were up €5m (47.3%) on the monthly target.
Taken together, the remaining smaller tax-heads -- Customs and CAT -- are up €15m (15.6%) year-on-year.
On spending, total net voted expenditure of €13.65bn was €315m, or 2.3%, down on 2013 and €167m below forecast.
The cost of servicing the national debt was €3.7bn so far this year, a fall of €256m or 6.5% on last year.
Conall Mac Coille,
chief economist at Davy, commented - -
"There was little of note in today’s exchequer returns. Tax revenues remain
ahead of schedule by 2.0%, growing by 5.6% in the first four months of 2014
compared with 2013. Spending discipline is being maintained in most departments
so that overall current expenditure is 0.2%, or €37m, below the Budget 2014
Net Voted Expenditure [pdf]
Alternative Presentation [pdf]
Gross Voted Expenditure [pdf]
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