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
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
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.
Irish Economy 2014: Did Ireland add 61,000 jobs 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
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
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
That said, as in previous years, Health spending is 2.1%, or €91m, above its
budget allocation, compensated for by under-spending in other departments.
Capital expenditure is 9.9% below the Budget 2014 plans,
providing an additional €64m safety margin to ensure that the 4.8% of GDP
deficit target is met. We still expect the government will beat its targets,
achieving a 4.4% deficit in 2013.
Tax revenues in April were actually 1.5%, or €43m, behind expectations.
Nonetheless, tax revenue is still ahead of expectations year-to-date. Income
taxes have grown by 7.2% in the first four months of 2014, 2.0% ahead of target.
VAT receipts are 1.4% below target, up 5.1% on the year. Both corporation taxes
(14.9%) and excise duties (5.8%) are ahead of Budget targets.
Gross current expenditure is 0.2% the Budget 2014 plans. Spending discipline is
being maintained in Education, -2.8% below target, and in other departments,
-1.9%. However, the budget over-run in Health has continued, exceeding
expenditure targets by +2.1%. As in previous years, gross voted capital
expenditure is being reined in aggressively to provide an extra margin of
safety. Year-to-date, capital expenditure is €64m, or 9.9%, below Budget plans.
The overall exchequer balance was €4.75bn in the year to April, down from €6.1bn
Voted Expenditure [pdf]
Voted Expenditure [pdf]