Deficit falls by €9.1bn as tax take is 1.7% above target
Ireland’s Exchequer deficit at the end of August was €11.3 billion, down €9.1 billion on the €20.4 billion deficit recorded at the end of August 2011.
The main driver behind the large reduction was lower capital expenditure due to the settlement of the 2012 IBRC promissory note payment with a Government bond and the fact that July 2011 banking recapitalisation payments increased non-voted capital expenditure significantly last year.
The Exchequer position is also improved by increased tax and non-tax revenues and lower net voted capital expenditure. Tax revenues to the end of August, at just under €22.1 billion were €365 million or 1.7 per cent ahead of target. In year-on-year terms, taxes are up almost €1.6 billion or 7.7 per cent.
At end-August three of the “big four” sources of tax revenue were ahead of profile. Income tax was €102 million or 1.1 per cent ahead of target cumulatively although receipts were below target in August for the second consecutive month. VAT is €82 million or 1.2 per cent ahead of target cumulatively at end-August and on a year-on year basis receipts were up €207 million or 3.1 per cent on the same period last year.
Corporation tax continues to perform above expectations and after eight months of the year is €310 million or 17 per cent ahead of profile, according to the Department of Finance.
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