The amount of tax collected last year was €873 million - or 2.5 per cent - below target, the Department of Finance has said.

Exchequer figures released today show that a total of €34 billion was collected in the year, a 7.2 per cent increase on 2010, as the amount of income tax paid surged by 22 per cent following the introduction of the Universal Social Charge.

Tax revenues had decreased in each of the previous three years.

The department said some €261 million in corporation tax receipts due to be paid in December were not received in time to be accounted for in the 2011 figures and will be carried forward to the January returns. Tax revenues were €612 million (1.8 per cent) below target when this was taken into account.

The Exchequer deficit - the gap between State spending and earnings - stood at €24.9 billion at the end of last year, up from €18.7 billion a year earlier.

The department said the €6.2 billion increase was a result of higher non-voted capital expenditure which was largely down to banking related payments.

"The majority of these payments are once-off payments relating to the recapitalisation of the banks and an exchequer deficit of €18.9 billion is forecast for 2012," the department said.

Minister for Finance Michael Noonan said tax revenues weakened somewhat in the second half of the year but that "this is not surprising given the more difficult economic conditions prevailing since the summer".

"Nonetheless there were some positive aspects to the tax revenue performance in 2011 and I am confident that the 2012 tax forecasts will be delivered," he said.

Total net voted expenditure amounted to €45.7 billion in 2011, a €724 million (1.6 per cent) year-on-year reduction.

Net voted current expenditure was €377 million (0.9 per cent) less than planned with shortfalls in the spend on the agriculture (€166 million) and social protection (€95 million) votes making up the majority of the fall.

The sale of some of the Government's stake in Bank of Ireland generated just over €1 billion.

The amount spent servicing the State's debt increased by €1.1 billion last year to a total of €5.4 billion.

Mr Noonan said the Exchequer deficit was some €2.75 billion lower than in 2010, when the impact of banking related expenditure is excluded.

"This shows that we are making progress in returning our public finances to a more sustainable path," he said.

At €13.8 billion, the amount of income tax collected was 2.3 per cent below target. Vat returns were 4.8 per cent lower than expected at €9.7 billion and corporation tax at €3.5 billion was some €240 million behind target after late returns are taken into account.

The amount of excise collected last year (€4.7 billion) was slightly above target and stamp duty increased by 45 per cent as a result of the temporary levy on pension funds introduced to fund the Government's Jobs Initiative.

Peter Vale of Grant Thornton said the State would see a shift in the makeup of the Exchequer receipts over the coming years as the Government move towards more indirect taxes.

"Overall, we have to hope that the new sources of tax revenue in future years do not merely replace falls in other tax heads,” he said.

“Unfortunately, much of this is out of our hands and dependent on global economic conditions; a slip back into recession will inevitably see this year's targets missed."