Tax payments in May eclipsed Government forecasts by €216 million, prompting analysts to predict the full-year outturn could exceed official targets by as much as €1 billion.

A strong set of exchequer returns, which said revenues for the first five months of 2015 were €734 million ahead of target, came amid warnings from Irish Fiscal Advisory Council and the Oganisation for Economic Cooperation and Development.

The Department of Finance said tax revenues to the end of May rose to €17.29 billion, €1.69 billion better than in the same period in 2014. The figures point to increased revenues in each of the major tax heads, although excise and stamp duty returns last month came in below target.

Expenditure remains under control, with €17.03 billion in voted spending to May coming in €306 million less than forecast and €165 million less than in 2014. Current health spending was €21 million or 0.4 per cent greater than forecast in the first five months.

“The Government’s April ‘stability update’ projections for the deficit to equal 2.3 per cent of nominal GDP already look dated - based on tax revenues exceeding the budget 2015 forecast by €1 billion in the entire year,” said Davy stockbrokers’ economist Conall Mac Coille.

“So today’s out-turn reinforces our view that the deficit will fall below 2 per cent of GDP in 2015.”

Economist Alan McQuaid at Merrion Capital said the likelihood of receipts beating expectations would enable the Government “to deliver a fiscal stimulus to the economy and workers ahead of the general election.”

According to Peter Vale, tax partner at Grant Thornton, robust incom e tax returns might give the Government confidence “that any further reduction in income tax rates in the budget later this year will not result in any fall in income tax receipts in 2016.”

Such assessments, however, came as the Fiscal Council questioned the Government’s spring statement and the OECD said fresh measures may yet be required to stabilise property market.

Some €7.04 billion in income tax was collected to end-May 2015, a year-on-year increase of €440 million or 6.7 per cent. “For the month of May, income tax was on profile,” said the department.

VAT receipts, which reflect consumer spending, were €496 million higher in the first five months than in the same period of 2014, rising to €5.71 billion. This was €90 million above profile.

“VAT receipts for the month were €133 million (8.6 per cent) above profile, which are reflective of the March/April trading period,” the department said.

Corporation tax receipts to end of May were €1.53 billion, up €546 million on 2014.

The exchequer was in surplus by €641 million at the end of May compared to a €3.47 billion deficit one year earlier.

Such figures embrace a €500 million increase in surplus income from the Central Bank, the proceeds of debt and share sales in Permanent TSB, and a €1.63 billion transfer into the exchequer from the National Pension Reserve Fund.

Excise duties reached €2.02 billion to end of May, a year-on-year increase of some €88 million but down €20 million against profile. Receipts in May amounted to €400 million, €61 million below profile.

Stamp duty receipts to the end of May reached €372 million, up €82 million year-on-year and €47 million greater than the target. In May, however, stamp duties were €16 million below profile.

Local property tax receipts to end of May amounted to €283 million, down €6 million in year-on-year terms and €10 million below profile. “In May, local property tax receipts were €4 million (25.3 per cent) above profile,” said the deparment.