A solid set of tax returns for January means the exchequer is a pretty strong position as Taoiseach Enda Kenny goes to Áras an Uachtaráin on Wednesday to set a date for the election.

The really big question to be answered in coming weeks is whether Kenny and Tánaiste Joan Burton take the political benefit from the improvement in the public finances and in economic conditions generally.

Positive economic data after an existential crash are one thing; first-preference votes quite another.

While economic competence will be the mantra of Fine Gael and Labour, polls suggest their support is still far off the level required to secure a smooth return to office.

Yet the data is good. The tax returns came as separate figures showed unemployment hit 8.6 per cent in January, down 1.5 percentage points year-on-year.

Global markets

All of this comes after a month of turmoil in global financial markets amid uncertainty over the outlook for China, Brazil and other emerging markets.

None of that, however, would be expected to disrupt short-term momentum in the rapidly expanding Irish economy.

Thus the exchequer returns for the first month of the year point to continued progress.

The figures reflect strong VAT returns from the Christmas period, as increased consumer confidence filtered through in the shopping tills.

They also reflect a big rise in new year motor sales, with more and more “161” car and truck registrations to be seen on the road.

USC cut

Although the return of marginal pay increases is evident in higher income tax returns for the month, the advance came before the full impact of the universal social charge tax cut introduced on January 1st finds its way into the monthly returns.

VAT collection came close to €2.1 billion in January, an increase of €130 million or 6.6 per cent on the same period in 2015.

“This strong performance is in line with the positive retail data and consumer sentiment from December,” said the department.

Income tax receipts reached €1.63 billion in the month, up €131 million or 8.7 per cent on January.

The outturn was consistent with figures showing employment growth and increases in average weekly earnings, the department said.

Excise duties reached €500 million, up €111 million, or 28.7 per cent, as strong vehicle registration tax returns followed a big rise in car sales.

At the same time, the figures show that total returns from corporate tax, the local property tax and stamp duties were down year-on-year by €61 million.

Corporate tax

Corporate tax collections, which rose strongly throughout 2015, came in at €24 million, which was down €26 million on the same month last year.

However, the department said January “is not a significant month” for the tax.

The February returns will be released this time next month. At that point, the judgment of voters will be clear.