Irish Tax Collection Close to Projections

August 5, 2010 Taxation in Ireland

Dublin -  Irish Government BuildingTax collections in Ireland for this year are only 1.4 percent behind the Government’s preset target, which is a clear sign of a stabilizing economy, according to the Department of Finance.

The Irish Government collected approximately EUR 17.2 billion in gross tax receipts throughout the first seven months of 2010, according to the latest Exchequer Statement released August 4th. The tax revenue total was only EUR 247 million below the Government’s estimates, and an approximate EUR 1.5 billion less than in the same period last year. A significant drop in income tax collection was the primary contributor to the lagging results. The Government has signaled that its fiscal position is still somewhat fragile, and that EUR 3 billion of public spending cuts will still be considered for the remainder of 2010.

Personal income tax collection for the seven months to July totaled EUR 5.8 billion, representing a 4.7 percent shortfall from the Government’s projections, and 8.4 percent drop compared to the same period last year. Value Added Tax (VAT) collection exceeded expectations by 0.2 percent, reaching EUR 6.5 billion in gross tax receipts. Corporate income tax revenues were EUR 1.6 billion, an approximate 1.8 percent above target. Capital Acquisitions Tax rose 12.4 percent above expectations, with a reported collection of EUR 112 million. The Exchequer Statement also revealed that the Government deficit had shrunk to EUR 10.2 billion, compared to a level of EUR 16.4 billion for the same period last year.

The latest results have invoked mixed reactions from members of the Irish Parliament. Sean Sherlock, Labour Party MP, quickly criticized the Government over the revenue figures, saying that the country’s future growth has clearly been sacrificed if the Budget deficit shrunk in the face of decreased tax revenues. However, the leading Government coalition and the Department of Finance maintained that the tax revenues are only marginally below expectation and it is obvious that the overall 2010 tax targets are “achievable”.

Photo by jmenard48