Irish Tax Receipts Still Down
October 5, 2010 Taxation in Ireland
Tax receipts for the Government of Ireland are down 6.5 percent for the first nine months of the year, although the Minister of Finance claims that there are emerging signs of stabilization in the tax national economy.
On October 4th the Irish Department of Finance released the latest Exchequer Statement, showing that EUR 22.2 billion of tax revenue was collected by the Government between January 1st and September 30th. The revenue figure is EUR 1.5 billion below the same period in 2009, and only 0.02 percent below the Government’s previous estimates. Brian Lenihan, Minister for Finance, claimed that although revenues had fallen, there are signs of economic recovery and the revenue gap between 2009 and 2010 will narrow further by the end of the year.
According to the statement, customs duties and stamp tax were the only tax revenue sources to have risen over the first nine months of the 2010 year, increasing to EUR 120 million and EUR 710 million respectively. Value Added Tax (VAT) revenues were the most significant monetary source, bringing in EUR 8.16 billion, down from EUR 8.61 billion during the same period in 2009. Corporate income tax were reported to be EUR 2.19 billion, 12 percent better than targeted, but 16 percent below last year’s results. Personal income tax revenues were 4.4 percent lower than official projections and 6.5 percent below last year’s results, at EUR 7.36 billion. Brian Lenihan claimed that the improving corporate tax revenue figure was an encouraging sign of economic growth. However, the low income tax revenue reflect the country’s high unemployment rate, which hovers at above 13.5 percent according to official figures released on September 30th.
After taking into account all Government revenues, expenditures and costs of borrowing, the Exchequer deficit was EUR 13.38 billion. Compared to the first nine months of 2009, the deficit figure has improved by a significant EUR 6.78 billion.
According to international economic analysts, the latest tax revenue results are not good enough for the Government to scrap its controversial EUR 4 billion austerity plan. It is expected that as a series of tax increase measures on December 7th the Government will implement doubled carbon tax rates, raising company tax, increasing road tax, capping public sector pay packets and introducing property taxes.
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