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So far...2012 tax take ahead of target

Tax revenues of €8.72 billion are over 10 per cent ahead of end-March profiles with increases in income, corporation and VAT intakes.

BOTH INCOME AND corporation tax intakes were ahead of last year’s figures and above target, according to the latest revenue data from the Exchequer.

VAT – the other of the main categories – also performed well.

Tax revenue in the first three months of 2012 totalled €8.72 billion, up by €1.2 billion on what was collected in the corresponding period of 2011.

The intake is €809 million, or 10 per cent, more than expected. However, the Exchequer warned that two factors had to be considered when looking at the numbers.

Some €251 million in corporation tax receipts which were originally due for payment in December 2011 were not received until January. That said corporation tax was ahead of target at end-March even after allowance is made for this. A contributory factor is a lower than expected level of repayments to companies.

There may be a negative impact seen in future months because of such repayments to companies.

Secondly, the 25.8 per cent year-on-year increase in income tax is the result of a technical reclassification of receipts from employers which they had previously returned as PRSI. The €739 million jump massaged the actual 3.5 per cent which income tax collections were ahead of end-March targets.

Minister for Finance Martin Noonan said given certain policy changes and the continued economic uncertainty, the strong performances of VAT and income tax were particularly welcome.

VAT also up, but excise disappoints

VAT receipts in the month of March, the first to reflect directly the impact of the 2 per cent standard VAT rate increase were €128 million better than planned. VAT is €101 million (3.2 per cent) ahead of target and €182 million (5.8 per cent) up on the same period in 2011.

One category that did disappoint the books was excise duties which recorded a €28 million shortfall in the month, as well as being €42 million short for the first quarter. They are also slightly down (€24 million) on a year-on-year basis.

Each of the four smaller tax-heads – stamps, CGT, CAT and customs – are  generally performing close to profile at this point in the year, the Department of Finance said in a statement.

Noonan said the figures highlight a “strong start to the year” and the “robust nature of the Budget 2012 tax forecasts”.

Non-payment of Promissory Note

Unfortunately, increased tax and non-tax revenues were offset by higher debt servicing costs and higher net voted current expenditure. Overall, net voted expenditure at the end of March was €11.6 billion – €586 million up year-on-year and €501 million ahead of target.

Debt servicing costs were about €70 million less than profiled at €2.4 billion. However, they were €1.5 billion higher than last year because of the timing of the Sinking Fund payment to coincide with a Government bond maturity.

However, the Exchequer deficit at end-March 2012 was €4.3 billion, compared to €7 billion in the same period last year, mainly because of the non-payment of the €3.1 billion Promissory Note due on 31 March.

Capital spends

Net voted capital expenditure at end-March, at €531 million, was €32 million below expectations and €63 million down year-on-year.

Chambers Ireland noted its disappointment at seeing another fall in Capital Expenditure. Chief executive Ian Talbot said the reductions have a “direct impact of reducing stimulus for the domestic economy”.

“Government needs to play its part and drive capital investment rather than relying on the easy option of cutting capital to offset inability to keep current spending within target…The domestic economy needs more support to drive the velocity of money and activity levels. Therefore capital spending cannot be allowed to dip below targets,” he said.

More: Budget body says Ireland could need €400m mini-budget>

Confirmed: Noonan announces deal on promissory notes>

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26 Comments
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    Mute Dublin City
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    Apr 3rd 2012, 5:10 PM

    Great News, let’s hope well see change soon!

    93
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    Mute Ann Reddin
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    Apr 3rd 2012, 6:13 PM

    Lord I beseech you to save us from these out of touch idiots. Moron Noonan has just stated on the 6.01 News that people didnt buy a lot of heating oil this year, thanks to a very mild winter??????? WTF is he really that FN stupid or does he thinks we are all fools. Sack the FN lot of them!

    34
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    Mute Denis
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    Apr 3rd 2012, 6:22 PM

    Is he wrong? Did I miss a cold snap somewhere?
    I thought it was one of the mildest winters in years, no wonder excise from heating oil is well down.

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    Mute Peter 66
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    Apr 3rd 2012, 7:33 PM

    I don’t get this we are up €739million & this morning we are told we need a mini budget to raise €400million, so what am I missing here ?

    44
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    Mute Ann Reddin
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    Apr 3rd 2012, 9:40 PM

    @ Denis – are you serious??? Have you not heard and do you not realise that an awful lot fewer people are filling their Oil tanks because they cant afford to, not just because the price of oil has gone through the roof, but also because they have lost their jobs, not to mention that our OAPs are having their fuel allowance cut by 6 weeks??? Most garages will tell you that they have had a huge rise in the number of people coming into their garages and buying 30 or 40 euros worth of oil to throw in their tanks cause they dont have the money to ring their Oil suppliers.
    And even if you dont know anyone personally, that chap that was on Dragons Den last week (the bloke with the silicone watches) mentioned that he could only manage to buy 30 euros worth of oil at a time from the local garage to heat the house and he had to ration its use to make it last.

    Looks like its not just the politicians that are out of touch with the reality of poverty!!!!!!!!!!!!!!!!!!!!

    26
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    Mute Tom Kenny
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    Apr 3rd 2012, 11:08 PM

    @Peter, you need to get your news from more than the Journal. It was reported by the “think tank” that it was unlikely that a mini budget would be required. So unlikely means there is still a chance. Which is the way the Journal told the story, there is a possibility of a mini budget……………….. Depends who is spinning the story

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    Mute David Higgins
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    Apr 3rd 2012, 5:14 PM

    Welcome news. Corporation Tax, Income Tax and even VAT all steady for revenue and all three won’t be raised in the near future so business and consumers have certainty for the next few years.

    75
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    Mute Joan Featherstone
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    Apr 3rd 2012, 5:20 PM

    On one hand bad news (possible mini budget), and now this good news…my heads melted!!! Fuck off recession, I’ve had enough.

    121
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    Mute Richard Keogh
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    Apr 3rd 2012, 5:43 PM

    The tax rates for income tax may not change but they’ve signed a memorandum to change the bands and credits so no certainty for workers there.

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    Mute Jay funk
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    Apr 3rd 2012, 5:58 PM

    please dont belive the hype,
    first VAT it is up 5.8 % on last year but since it was increased by 10% (20 to 22) it is down by 4.8% of the increase so all that it has done is taken money out or lower paid workers to pay bankers
    second duty down, no suprise as petrol is so expensive you cant afford to drive
    now Corpo tax is only up due to accounting exercises, in reclassing prsi and late payment from dec, when both of these are taken into account its actually a tiny increase but no-where near where FG Lab said we would be
    So basically FG are doing what the banks did in 2008 saying they are doing very well, when in fact they are using accountancy trick, and misleading headline figure which disguise the truly shocking ture figures.

    35
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    Mute Thevoice Ofreason
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    Apr 3rd 2012, 7:49 PM

    @david
    Yea great news. Half my friends have emigrated and most of the others are living in poverty thinking about emigrating but can’t because of property they’ll never sell, but hey we’ve taken in more tax so I’ll sleep a lot better tonight. Thank god for people like you David :-)

    22
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    Mute Jim Walsh
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    Apr 3rd 2012, 8:17 PM

    It’s ironic giving that you’re the one attempting to criticise the government for “misleading headline figures” that most of your assertions are completely misleading in themselves.

    You’re wrong with your assessment of the VAT figure. You can’t compare the Q1 figures directly because you don’t have a monthly breakdown so you don’t know if VAT was down in January or February which could have brought the figure back. So VAT could have been down under the old rate and then shot up under the new rate. You’ll have to wait until Q2 before you can do an assessment of that because then you’ll have three months at the old rate and three months at the new rate. Anyway the figure is ahead of target which is the most important point because its the target that counts.

    As for your assertion that corporation tax is “no-where near where FG Lab said we would be” well actually the figure is ahead of “where FG-Lab said we would be” even when the accounting technicality is taken into place. So your criticism is complete bogus on this point too.

    Finally you fail to point out that its the Exchequer themselves who have pointed out the warning on the figures which undermines your argument that there is an intent to mislead. If they wanted to mislead they would have said nothing about technicalities or repayments later on in the year. They simply would have talked about the headline figures.

    15
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    Mute Thevoice Ofreason
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    Apr 3rd 2012, 9:09 PM

    Could somebody please give me one good reason why I should be paying more tax because other people made criminal mistakes? Why aren’t the people who made mistakes paying for it fully? Why are we still giving these men our money?

    14
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    Mute Stephen Devine
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    Apr 4th 2012, 1:03 AM

    R u a member of FG or Labour David. I hope u r because then one can attribute your comment to ‘spin’ as opposed to gross ignorance. There’s way too much colour behind the headline numbers to be taking them at face value.

    1
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    Mute Thevoice Ofreason
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    Apr 4th 2012, 10:35 AM

    An answer would be nice because I can’t figure out a reason why and it’s really wrecking my head.

    Could somebody please give me one good reason why I should be paying more tax because other people made criminal mistakes?

    1
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    Mute Kevin O'Sullivan
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    Apr 3rd 2012, 5:44 PM

    The awkward moment when the naysayers are proved wrong.

    58
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    Mute Thevoice Ofreason
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    Apr 3rd 2012, 7:51 PM

    Proved wrong about what exactly?

    13
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    Mute The Grim Reaper
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    Apr 3rd 2012, 5:36 PM

    Lets hope the Unemployment figures go down.

    54
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    Mute Ann Reddin
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    Apr 3rd 2012, 9:43 PM

    Ehh wouldnt be holding my breath on that one.

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    Mute James O Mara
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    Apr 3rd 2012, 9:43 PM

    Get them out vote them out

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    Mute Ann Reddin
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    Apr 4th 2012, 12:10 AM

    Lots of GaeLabs here tonight.

    2
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    Mute O'Reilly
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    Apr 3rd 2012, 5:56 PM

    A solid performance from gov. Noise around VAT increase proved wrong…

    47
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    Mute Mike Scott
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    Apr 3rd 2012, 7:37 PM

    O’Reilly, we all know you’re not the brightest star in the sky, but even you should be able to understand what’s going on here! Emergency budget just before government closes down for the summer! Mark my words!

    20
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    Mute Norman Hunter
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    Apr 3rd 2012, 10:41 PM

    But after the referendum i’m sure.

    8
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    Mute jimbo
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    Apr 3rd 2012, 5:15 PM

    So now we see the 2%VAT increase has an effect.
    Clever move noonan take it back down to 21%..

    25
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    Mute Tom Kenny
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    Apr 3rd 2012, 11:14 PM

    Jimbo Jimbo Jimbo, I was going to try and get through to you, but then I thought better of it :)

    2
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