Tax revenue for the first three months of the year was better than expected, while public spending was lower than forecast, according to official figures.
The Exchequer returns for the first three months published yesterday show tax revenue of €9.23 billion, up €415 million or 4.7 per cent on the same period last year, and €257 million or 2.9 per cent higher than forecast.
Income tax brought in €3.795 billion, which was 3.5 per cent up on the same period last year and marginally higher than forecast.
The higher income tax receipts reflected the increase in employment evident over the past few months, according to Department of Finance officials.
Improved retail sales are reflected in the VAT intake of €3.51 billion, up €210 million or 6.4 per cent on the year and 1.6 per cent ahead of forecast.
Excise came to €1.1 billion, which was 11.5 per cent up on the year and 11.2 per cent higher than forecast.
Officials said this was a reflection of higher-than-expected car sales in the first three months of the year.
Other tax heads produced €824 million, which was down by €36 million on last year but €88 million more than forecast for the period.
Spending down
On the spending side, total net voted expenditure of €10.26 billion was €631 million or 5.8 per cent down on the same period last year and €261 million less than forecast. Current health spending at €3.2 billion was €49 million over target, but this represented an overshoot of just 1.5 per cent. Social welfare spending of €3 billion was €441 million or 12.8 per cent lower than in the first three months of last year and €156 million or almost 5 per cent less than forecast.
Deficit
A total Exchequer deficit of €2.3 billion was recorded for the period – an improvement of €1.4 billion on last year.
The figures were welcomed by Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin, who said they represented a solid start to the year.
In a statement the two men said the figures were in line with the improvement in the domestic economy, the reduction in the live register and the increase in employment.
They added that ensuring debt sustainability was a key pillar of the medium term economic strategy and the Government was committed to reducing the deficit to under 3 per cent by 2015.
“Overall, the tax performance for the first quarter of the year is in line with expectations, with headline tax revenues coming in nearly 3 per cent ahead of profile. VAT and excise duties are up 6.4 per cent and 11.5 per cent year on year respectively, reflecting the improvements in the domestic economy, retail sales and consumer confidence,” said Mr Noonan.
“Finally, and as profiled, we are starting to see the impact of strong employment growth feeding through into income tax receipts, which is up €129 million on last year,” he added.
Mr Howlin said he was pleased spending was being managed by departments in accordance with levels decided by Government in the budget.
“Expenditure overall is on target and in line with expectations. It is, however, early in the year and the Government is aware of the continuing need to keep overall expenditure on profile,” he said.
