The improving health of the economy is reflected in the latest exchequer numbers, which show tax returns for the year running €1.1 billion ahead of target on the back of another good month for income tax and VAT.
The latest official figures for November, however, indicate health expenditure is now €533 million or 5 per cent ahead of projections.
November is the most important month on the exchequer calendar as it includes tax returns for the self-employed and a greater flow of corporation tax receipts - both of which are key indicators of the economy’s underlying health.
The figures show total tax revenue stood at €38.2 billion at the end of November, up 8.5 per cent on the same period last year, but also €1.13 billion or 3 per cent ahead of target.
Income tax, which is the biggest tax heading, generated €15.8 billion, which was €122 million or 0.8 per cent ahead of profile for the year, reflecting the increased level of employment in the economy.
Welcoming the increased tax receipts Minister for Finance Michael Noonan said: “The economy is growing, more people are at work and this is reflected in today’s exchequer figures. November is the final due month for VAT and performance has been strong in the year to date, with receipts up €575m year-on-year. November is also an important month for corporation tax and again there was an increase of €240 million on the same period last year”.
Minister for Public Expenditure and Reform Brendan Howlin said: “On the spending side, despite pressures in a number of areas, overall spending remains broadly on profile at €37,878 million or 0.5 per cent ahead of profile. It is clear once again that Ireland is set to comfortably meet its deficit target at year end.”
Significantly, income tax receipts for November were also €70 million or 2.7 per cent ahead of profile
The figures show VAT, which reflects consumer spending, was also ahead of expectations in the run-up to Christmas.
The sales tax took in €10.8 billion, which was €312 million or 3.3 per cent above target.
Corporation tax receipts also performed strongly, coming in at €4.2 billion, which is €209 million or 5.3 per cent ahead of profile.
Excise duty, which has benefitted from strong car sales in recent months, was €4.6 billion, some €245 million or 5.7 per cent ahead of projections.
Overall, the exchequer deficit stood at €5.76 billion at the end of November, down from €8.6 billion at the same stage last year.
On the spending side, the November figures show total net voted expenditure of 437.9 billion, which was nearly €1 billion down on last year, but still €184 million above profile.
The primary reason for this was a €533 million over-spend in health.
This was, however, partially offset by under-spends in other departments and in the capital budget as well as reduced interest rate costs on the national debt.
